Stop Letting Fear Drive Your Money

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

Speaker 1 Normal is broke and common sense is weird. So we're here to help you transform your life.
From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show.

Speaker 1 So excited to have you with us. 888-825-5225 is the phone number to jump in.
Triple 8-825-5225 alongside the fabulous, the incomparable Jade Warshaw. I am

Speaker 1 Ken Coleman. Just happy to be in her presence, folks.
It's going to be good. Fresh off of Orlando.
We might talk a little bit about that. We'll see.

Speaker 1 Orlando, I can't speak now. And Chicago.
Shy Town.

Speaker 1 A couple live events. So much fun.
We are feeling the juice from those two great crowds. Jessica is up in arkansa jessica how can we help today

Speaker 3 hi good morning or good afternoon i'm sitting at just a tad bit under a million dollars in debt um

Speaker 3 almost 200 of that is unsecured and we were contemplating bankruptcy but my face tells me that i should be paying all this and i know i should um and i'm just i guess i'm trying to see if there's a light at the end of the tunnel for

Speaker 4 There's always hope.

Speaker 1 Why don't you lay it out for us? Give us the whole $1 million in debt. What is that?

Speaker 3 So 210 is unsecured personal loans. 83

Speaker 3 of that 210 is credit cards.

Speaker 3 The house is $6.58.

Speaker 3 Okay. And then there's two vehicles that

Speaker 3 there's two vehicles in there. One's almost paid off, and then the other one is very, very upside down.

Speaker 4 Tell us the amounts, the first and the second.

Speaker 3 One is we owe $12,000 on it, and the other one is $59,000.

Speaker 4 Ooh, and how much do you know off the top of your head what that $59,000 one is worth?

Speaker 3 $35,000.

Speaker 4 Girlfriend. Okay.

Speaker 4 How much do you guys earn? It's you and your husband?

Speaker 3 Yes, and he is in a job transition.

Speaker 3 So we were making over $300,000. Now we're at sitting at about $259,000 a year.

Speaker 2 Okay, good.

Speaker 4 That's listen, there's your light at the end of the tunnel right there. Is if you had told me that your shovel was $60,000 or $70,000, I'd be really hurting with you.

Speaker 4 But the good news is you have a really great shovel,

Speaker 4 $2.59,000, and you said

Speaker 2 that's with or without the job loss.

Speaker 3 That's with the job loss. And his dad is going to be commission only.
So we haven't, we don't know what that's going to look like yet. It could be amazing.

Speaker 2 So you make

Speaker 4 $259,000.

Speaker 3 We have some retirement funds in there

Speaker 3 from military. And

Speaker 4 how much of that is the military? Like, how much of that is your income and how much of that is like pension type stuff?

Speaker 2 About half. Okay, good.

Speaker 4 That is really, really, really, really, really good news.

Speaker 4 Tell me about the $210,000. Was this a business loan? What was that money for?

Speaker 3 It was a little bit of everything, honestly. It was some bad business endeavors, me trying to be a serial entrepreneur.

Speaker 3 It was some bad financial decisions, just in general.

Speaker 3 Imposter syndrome.

Speaker 3 took a fantastic career opportunity and I just kind of shopped my way through through the imposter syndrome until I got to therapy.

Speaker 2 Okay. And

Speaker 3 so that was some bad financial decisions there, luxury shopping. And then I took over, I took out two personal loans to clear my husband's credit card debt

Speaker 3 as well. So that's what all that is.

Speaker 4 This is like classic mo money mo problems, right? This is you had a big income and so you could afford to make bigger mistakes, right?

Speaker 4 But really when we boil it down, Ken, this ratio wise it's the same call we always hear right yeah so that's the good news is you know you've got uh 260 000 in income right now it's going to go up exponentially and you got you know uh i'm not counting the mortgage debt because when we're in baby step two which is the step where you're paying off all the consumer debt we really don't count the mortgage so can you tell me how much your monthly mortgage payment is so i can see what percentage of your life it is

Speaker 3 39.38.

Speaker 4 Okay. And so that's going to be fine with what you're bringing home.
So that the mortgage is not the problem. And I just wanted to explain that to you.
It's no more than 25% of your take-home.

Speaker 4 So that's not the issue. The problem is you feel overwhelmed because no matter how you slice it, if you tell somebody you have $300,000 of debt, that's a lot, right?

Speaker 1 Yeah. Are you familiar with our debt snowball?

Speaker 3 Yes, I actually did it probably about 20 years ago, and the only debt I carried up until three years ago was a mortgage and a car payment.

Speaker 3 And I would usually pay the car payment, you know, double or whatever. Yeah.

Speaker 1 Well, are you, okay, we get that, but let's talk about the now because your question is, is there a light at the end of the tunnel? The answer is yes, if you're willing to look for it.

Speaker 1 And so are you done now?

Speaker 1 Are you done? Is this the last time you're ever going to do this?

Speaker 3 Oh, for sure.

Speaker 2 Okay, so I can't do this again.

Speaker 1 Okay, so

Speaker 1 in this situation, my take is I would try to get massive momentum. You know, and Jade can speak to this.
So I'm going to give it back to her quickly because she and Sam paid off $500,000 in debt.

Speaker 1 So you got the perfect person to talk to today. But here's my only thing that I would say, and I'll hand the baton back to you, Jade.
I think they need a momentum play, like a big one.

Speaker 1 And so I would be attacking. I would try to get rid of the $59,000 car payment.

Speaker 4 Instantly.

Speaker 1 Like, even if they go upside down, you can tell her how we do it. But I just think there needs to be a dramatic

Speaker 1 move. I don't know what your take is, having done this yourself.

Speaker 4 No, I agree with Ken 100%. You do.
You need to do something that's going to shake you emotionally. That's going to shake you financially.

Speaker 4 That's going to almost like, it's like the gun going off of the race, right? And I agree with Ken.

Speaker 4 You guys need to pull together. And I mean, with your income in a couple of short months, pull together that 24,000 that you're upside down on this vehicle and get out of it.

Speaker 4 you know, drive the $12,000 vehicle for a while, figure out a plan to save up another, you know, couple thousand dollars to get you a beater.

Speaker 4 And here's the thing, I'm going to be 100% straight with you. You're used to making a lot of money.
When you get a beater, it's going to mess with your ego big time.

Speaker 4 Because in your mind, you're going to go, wait a minute, I work too hard to be driving a car like this. Wait a minute, nobody at my work drives a car like this or nobody in my social circle, right?

Speaker 4 Because you start hanging out with who you earn money with, right? And so you're going to be the one and it is going to create questions. And it's your choice whether you answer those questions.

Speaker 4 But I'm just letting you know right now, Jess, because that's going to happen.

Speaker 4 And there's going to be an incongruency for a while with how hard I'm working and how much money I'm earning versus the lifestyle I'm living.

Speaker 4 And I'm telling you that as a person who did that for quite a while. And that's going to be so good for your soul because that's what's going to cause you never to do this again.

Speaker 4 You're going to go, oh my gosh, I never want to feel that again. Seriously.

Speaker 1 I think it's right. And, you know, not trying to steal too much of your story, but I mean, Sam and I were hanging out last night, Jay Tussa.

Speaker 1 And he reminded me you guys had one car for a long time we didn't get a second car until a year into working here

Speaker 4 yeah but that was just because you adjusted to it i did but during the massive debt payoff you guys were one car family so but you said it kim we got used to it that's right you you did fine you get used to anything right right you could be making right multiple six figures and get used to it whatever lifestyle you create so yeah i did that's hilarious to me that you were here for a year before you got wheels And even still, I was a little reluctant.

Speaker 4 I was like, we don't need it.

Speaker 4 Listen, now get me that, get me that G-Wagon.

Speaker 1 I'm ready, Ken. Come on.

Speaker 1 Hey, quick reality check.

Speaker 7 AI isn't just for sci-fi nerds and Silicon Valley tech bros anymore. It's the new weapon of choice for every scammer with fast Wi-Fi and bad intentions.

Speaker 7 Identity thieves could be using AI right now to steal your info in ways that would have sounded impossible just five years ago.

Speaker 7 We're talking voice cloning, deep fake videos, filing bogus tax returns, draining your bank and retirement accounts, and even home title fraud.

Speaker 7 And it can happen fast, so most people don't find out until it's too late. So as someone who has had his identity stolen before, I don't mess around.

Speaker 7 I use Xander ID theft protection because it keeps up with today's threats without the crazy price tag other companies charge.

Speaker 7 You get real-time monitoring across your whole financial and digital life, and if something does go down, they'll give you the full white glove treatment, like 24/7 restoration services by Pros based in the U.S., and up to $2 million in stolen funds and expense coverage.

Speaker 7 So, you don't need to live in fear, but you do need to be smart about protecting your identity from thieves. So, go to xander.com or call 800-356-4282 and get yourself protected today.

Speaker 1 Tyler's up next in Knoxville, Tennessee. Tyler, how can we help?

Speaker 8 Thank you for taking my call.

Speaker 1 You bet.

Speaker 8 So I'm currently 22 years old, and I'm struggling with the fact that my parents are kind of financially abusing me. I've been following the Ramsey baby steps.

Speaker 8 I'm currently reading the Total Money Makeover book. And I got my refund from school about in May.
And it was close to about $4,000, exactly $3,999.

Speaker 8 And I used that money to pay off my clearing of debt, my car payment, and as well a little bit of my credit card payment. And they weren't really happy about that.
They were just...

Speaker 8 absolutely furious about me saying that that was their money and about how the hard work they did to put me out here and everything like that and my head's just spinning about it and hold on what to do hold on hold on hold on the money was from we was a tax refund for money that you did like w-2 money

Speaker 2 no

Speaker 2 refund school refund correct yeah but they paid did they pay for the school school refund or did you pay for it

Speaker 8 So they were helping me through financial aid. We took out a loan and as well just through whatever else, federal work study as well.

Speaker 4 So was this, let me clarify because the key word in student loans is refund. And refund sometimes means you took out a loan and the loan was too much for what school actually costs.

Speaker 4 And so they gave you the money back in cash, but it is still loaned money. Does that make sense?

Speaker 4 So was this money that was still loaned money or was this actual cash that you had from doing work study and you were given that as payment? Clarify that for me.

Speaker 8 I believe it was a little bowl from the work study and from the loan.

Speaker 4 Okay. And whose name is on the loan, mom's and dad's or yours?

Speaker 4 Who's the signer on the loan?

Speaker 8 I believe it's mom and then me. I believe I'm the co-signer on it.

Speaker 4 Okay. So what where I'm seeing here is there's a lack of clarity on what's going on.

Speaker 4 So we do need to have that because you need to know if you receive $4,000, if it's student loan money, you should know that because you have the right to be like, oh my gosh, I don't want to be on the hook for that.

Speaker 4 I'm not going to use debt to pay off debt. Right.
So understanding that's important, but it's spilled milk at this point.

Speaker 4 I can understand if it was loan money, if your mom was like, wait a minute, you took this loan money that we're both on the hook for to do this thing without consulting both of us because we're both on this loan.

Speaker 4 So I can see that. So I want to put that out there, but you used a really big word earlier when you said, mom and dad are abusing me with the money.

Speaker 2 I see no evidence of that.

Speaker 8 show us that let us hear about that so the reason why i say that is because one when i got that money my first instinct was obviously to put it towards my debt and my my both my parents are both spenders my dad works in the middle field my mom work doesn't work anymore so i'm currently in i'm in another state from tech i'm from texas originally i'm in another state working as well as in school trying to pay all this stuff and all this things i can do and they're helping me financially but it's always about money money money they've my mom just bought a brand new mercedes my dad spends money constantly on his new truck okay um what's that got to do with you right but what's that got to do with you

Speaker 4 it's just a money struggle they've always been haggling me for money as well as asking when i ask for money if i need it they just never give it to me or they're 50-50 on it okay so but that's not abuse that's not i don't think it's abuse like it what what i'm hearing ken is and correct me if i'm wrong tyler what i'm hearing is your parents are spenders.

Speaker 4 It seems like they always have the money when it's time for something for them, but when it's something for you, it's a big deal. And it also sounds like they've hit you up for money.

Speaker 4 Maybe you had your job in high school and they're like, hey, let me, can you spot me a 20? That kind of thing. And they never paid you back.
Is that the type of thing?

Speaker 2 But yes, but it is.

Speaker 8 Like, recently they've been wanting me to get a truck and they want me to help pay a down payment. And I've been telling them that I don't want to do that.

Speaker 2 Okay, then you don't have to do it.

Speaker 4 You don't have to do it. Here's the thing.
Here's the thing. Your parents, you're 22 now.

Speaker 4 Your parents can make suggestions. They can even try to like strong arm you to do things their way, but you don't have to, my guy.
Like you can say, I'm just not going to do that.

Speaker 4 And that might be them being pushing some boundaries, kind of being. you know, a little disrespectful, but I wouldn't go the line of abuse.
Would you, Ken? I don't know that I would go to that line.

Speaker 1 You're being very nice. I've heard enough.

Speaker 1 Listen, Tyler, there's two things. Okay.
Number one, I actually get your instinct. And your instinct to take that money and put it on debt.
Great instinct.

Speaker 4 It's a good instinct. Wrong move.
Like right idea.

Speaker 2 I'm getting there. I'm getting there.
I'm getting there.

Speaker 1 I'm saying it was the right instinct,

Speaker 1 but you should have communicated with the parents because they're involved in this financially.

Speaker 1 You can do both and also be frustrated with them for all the stuff you're frustrated with them about and how they handle money.

Speaker 1 I see all of this together, But the reality is, is that you and Jade's right. You're 22 now.
So now we begin the separation and now we create a little bit better boundaries. Yeah, you're right.

Speaker 1 You're right. And she's right.
You should have communicated much better on this deal. What's done is done.

Speaker 1 But let me be very clear. You need to stop saying they're financially abusing you.
Because this is not anywhere close to it. I'm not sure.

Speaker 2 It's just disrespect.

Speaker 1 It's dramatic. And by the way, words matter.
So when we think that our mom and dad are abusing us, and then we tell somebody

Speaker 1 and we tell two hosts on a radio big giant show,

Speaker 1 then we've now become,

Speaker 1 we've come to believe something that's just simply not true. And then that colors how you handle things.

Speaker 1 They already handle money in a way that will continue to create tension for you going forward. That's clear.
And by the way, good on you, young man, to go, I don't want to live that way. Yes.

Speaker 1 So I like the direction you're headed. All that to say, stop with this nonsense, stop thinking it, stop saying it, stop feeling as though your parents are abusing you.
They're not.

Speaker 1 And you just need to start to do things differently. You do.

Speaker 4 And honestly, how much are the student loans?

Speaker 8 So as of this moment, I checked last night. It was roughly about 40,000, but going into next year, I will be a junior.
So it's going to be tacked on roughly maybe about 80,000.

Speaker 8 I transferred to the University of Tennessee.

Speaker 4 Here's what I need for you. Here's what, here's my, we took some time talking about mom and dad.

Speaker 4 I want to talk about Tyler for a minute because you were talking about mom and dad's bad money decisions, bad money habits.

Speaker 4 Tyler, you are following in those footsteps right now because you are taking on debt and you're going to an out-of-state school and you're doing all this thing, just racking up money.

Speaker 4 And I know that you're young, but you got to stop doing that because you're going to come out of this thing with $80,000 of debt.

Speaker 4 And what's going to make it even more of a headache is you're going to be tied to mama. And so mama's going to be breathing down your neck every month talking about where's the payment?

Speaker 4 You're messing up my credit. Da da da da da.
And that is going to jack you and her.

Speaker 2 That's great.

Speaker 4 If I were in your shoes, I would be thinking long and hard about, can I, do I need this degree? Do I need to be out of state for this degree?

Speaker 4 Can I do it in my home state where I have in-state tuition? And can I do it someplace where I'm paying, going at the speed of cash? I'm getting a job. I'm doing work study.

Speaker 4 Because $80,000 is a lot of money, especially when it's tied up with mom and dad.

Speaker 1 This is a great point because they overextend themselves all the time. And that's why that tension around money is always there.
They have a scarcity mindset. That's what you described.

Speaker 1 And so tied to that, it's going to make your life miserable. So we prefer you not to have any more student loans.
But if you're going to do student loans, do it without mom and dad attached.

Speaker 4 At the very least. And do it in states so that it at the very least.
Listen, don't hear me say get student loans, but do you see what I'm saying? Yeah.

Speaker 8 Yes, I understand what both y'all are saying. And I've done the math as well.

Speaker 8 Even when I originally did transfer, if I was looking back at other schools, and some schools were the exact same price, the same major that I wanted compared to here.

Speaker 8 And maybe the majority came to that sports management.

Speaker 2 So what schools were saying, Tim?

Speaker 1 Well, there's two ways to skin this one. You know, there are a lot of people that would argue with me and debate me on you need a degree in sports management.

Speaker 1 And that's probably statistically true, not knowing that major super well.

Speaker 1 However, I know it's possible to get any of those jobs without a degree because I can point to example after example. You got to get in.
You got to get in.

Speaker 1 You got to sweep floors. You got to be a janitor.
And then you work your way up to doing some type of analyst work.

Speaker 1 So it's possible to get into sports management without a degree, but I can tell you that my partner's right today. Nobody cares where you get your degree from.
They sure don't.

Speaker 1 So listen, I know what UT costs for in-state students. I can't imagine what it costs for for out-of-state students.

Speaker 2 Tyler,

Speaker 1 there's a better way.

Speaker 4 Tyler, no one has ever asked me where I went to school.

Speaker 1 I'm not even allowed to tell anybody anymore.

Speaker 2 She made me stop talking about it.

Speaker 4 No one's ever even asked me what I got my degree in.

Speaker 1 Ever. What did you get your degree in?

Speaker 4 Music, commercial music.

Speaker 2 Well, that makes sense.

Speaker 4 Concentration of vocal performance.

Speaker 1 And now you're a best-selling author.

Speaker 1 What a waste. What a waste of time and money.

Speaker 7 You know, when I became a dad, something flipped. Suddenly, it wasn't just about me and my wife anymore.
It was what happens to my family if I'm not here tomorrow.

Speaker 7 And things like that just hit different when you become a parent. But I'll be honest, making a will feels heavy and complicated, and it's not exactly what I want to be doing with my time off.

Speaker 7 But here's the deal: being a parent means doing the hard stuff, especially stuff that protects your family. And that's why I used Mama Bear legal forms.

Speaker 7 No hassle, no lawyers, just a simple online tool that helped me create a legit will in about 20 minutes. So it was pretty much painless.

Speaker 7 Plus, I added a notch to my dad belt right there between installing car seats and bedtime stories.

Speaker 7 Listen, being a dad never stops, and making a will is how you make sure your family's covered even when you're not there.

Speaker 7 So get your will done today at mamabearlegalforms.com and use the promo code Ramsey to save 20% off when you check out. Again, that's mamabearlegalforms.com, promo code Ramsey.

Speaker 1 Welcome back to The Ramsey Show. I'm Ken Coleman, and Jade Warshaw is joining me here in the studio here of the Ramsey Show.
So excited that you're with us. 888-825-5225 is the phone number.

Speaker 1 Triple 8-825-5225. You got questions about income, feeling stuck,

Speaker 1 feeling a little stale, and want to make some moves, I'll coach you on that. Got your money problems?

Speaker 1 Jade's got you on that, and we combine as well. Let's go to Jennifer, who's in Jackson, Mississippi.
Jennifer, how can we help today?

Speaker 5 Yes, I just have a real quick question. I have a son who is 17, about to turn 18, and my credit score is 830, and my husband's is like 780.

Speaker 5 And we want to start him off on the right track of having a good credit, much like we do.

Speaker 5 And I was just wondering if there was a particular credit card or how y'all would maybe suggest helping him get and obtain a good credit score as well.

Speaker 2 Okay.

Speaker 1 I've never heard that question on the show before, actually. Don't think I have.

Speaker 4 I've gotten it a couple of times.

Speaker 4 Jennifer, when did you start listening?

Speaker 5 I just started like about a month ago.

Speaker 2 Okay, great. That makes sense.

Speaker 1 Okay, I'm glad to have yes, welcome aboard.

Speaker 4 So what is it that what are you hoping he'll be able to do with that credit score? I just want to learn a little bit more about your intent here.

Speaker 5 Well, I just want to know that when he fin he is also about to start college,

Speaker 5 he's a senior in high school now, and so he'll be starting college.

Speaker 5 And I know that he'll need you know, we bought him his first vehicle, but I know that down the road that he'll need to get a vehicle and possibly be able to have to rent an apartment for college and this, that, and the other.

Speaker 5 So I just want to make sure that he has a good enough credit score to be able to get the things that he would need to get, like a vehicle later down the road or maybe an apartment or something like that.

Speaker 4 Well, here's, I'll be honest with you. Here's why I don't like credit scores.
And here's why I don't, I've never focused on one. And for,

Speaker 4 you know, for all intents and purposes, I don't believe in them at all.

Speaker 2 Because you have to have debt.

Speaker 4 You have to interact with debt in order to have a credit score. And we also know that when you borrow money, the borrower is slaved to the lender.

Speaker 4 And so there's this part of the credit score that it has never, it doesn't make sense to me because it's all about how you interact with debt, how much debt you have, what types of debt you've had, how long you've had your debt, what percentage of your debt that you're using, right?

Speaker 4 It's all, nobody's asking questions about can you actually afford the item? How are you managing the cash that you actually and the money that is actually yours that is in your bank account? And so

Speaker 4 that's why I have an issue with the credit score. What I would love is for you to teach him a way that says, okay, if you have the money, you can afford it.
If you don't have the money,

Speaker 4 you can't afford it. Now, let's go back to the thing you talked about.

Speaker 5 He is a very good saver right now. So he only works part-time like two days a week, and he has since this past summer.
And he's already saved like almost $3,000 and has

Speaker 5 purchased like a, like he's purchased like a $2,000 CD and this, that, and the other.

Speaker 5 So, I mean, we have taught him like you do your 10% top, then you have some that you put in, this much you put in savings, and this much is like your fun money. So he's done that.

Speaker 5 But what I mostly worry about is like once he gets off to college and he has to rent an apartment. I know a lot of apartments look at credit score, too.

Speaker 5 If he doesn't have one, they may be like, oh, I know we can't rent to you.

Speaker 4 Well, the truth is, you're right. A lot of credit card or a lot of apartments do look at your credit history, but a lot of them don't.

Speaker 4 And the ones that do, if you simply go to them and say, Hey, here's the thing, I know you guys look at credit scores.

Speaker 4 I have a zero credit score, which means that I don't borrow money because I don't believe in debt. But I also brought a copy of my bank account, and you can see how much money that I have here.

Speaker 4 So I'm good for the money. I also brought you my pay stubs so you can see how I work.

Speaker 4 And, you know, if you, if you kind of dig deeper and also let them know, hey, they might charge you a little bit more for first and last month's rent.

Speaker 4 But the truth is, you may have to do a little bit of due diligence to find people who believe the same things you believe and can actually understand, hey, I actually have money because those apartment complexes are out there.

Speaker 4 So let's check that one off the list. And then if we talk about the car.

Speaker 4 Well, I don't know about you, but I'd rather him buy a car in cash and not have payments than

Speaker 4 put money down and be loaded up with a car payment Because now we're teaching him, hey, if you want a car, you have to pay payments on it.

Speaker 4 As opposed to teaching him, hey, if you want a car, let's buy one in cash. You got $5,000, $3,000 saved and $2,000 in a CD.
Once that CD is available, let's buy a $5,000 car in cash.

Speaker 4 And then in a year or two, if you want to upgrade and add $3,000 more with it, now you're driving an $8,000 car. And let's do that.
And so that you can always have your money freed up.

Speaker 4 Because one of the things we've learned, Jennifer, is the car payment is what keeps middle class middle class.

Speaker 4 Most people are walking around here with a $700 a month car payment. And because they have that car payment, it's tough for them to do things like invest for their future.

Speaker 4 And so I'd love to set him up with the mentality that

Speaker 4 I keep my biggest wealth building tool, which is my income, at my disposal. I don't give it away in payments every month.

Speaker 4 And therefore, if I'm not in debt, I don't need debt, which which means I don't need a credit score.

Speaker 12 Okay.

Speaker 4 It's a new way of thinking. I know that it is because people don't talk about it.

Speaker 2 It is.

Speaker 5 It's scary. It's a scary new way of thinking.
But yes,

Speaker 4 I see your point. Tell me the fear.

Speaker 2 It's not scary.

Speaker 2 What are you scared of?

Speaker 5 It goes beyond.

Speaker 5 the rent because so college will only be four years and then after that it'll be he'll probably want to buy a house and I know it's a lot harder to, you know, obtain a house with no credit score and save up for a big, you know.

Speaker 1 So let me, let me, let me break in and I want my colleague to tell you about that fear. Go ahead, explain it.

Speaker 4 What if I told you that's not true?

Speaker 4 Jennifer, I love this call so much. I'm so glad you're with us because you are

Speaker 4 every woman USA right now calling in. The truth is, credit scores, they benefit from us, right? They benefit from us being in debt.
They make money off that.

Speaker 4 When you get a credit card, when you sign up for a loan, there's a little thing called interest. And so there's a lot of people making money off of that.

Speaker 4 And so that's why you don't see on TV people advertising zero credit scores because nobody's making money off of that. And so this whole thing is a product.
But the truth is, you can buy a house.

Speaker 4 It's no harder. You can buy a house with a zero credit score.
It's called manual underwriting. And it's the same thing like I told you at the apartment complex.
All they do,

Speaker 4 it's literally the same process, but all they're, instead of looking at your credit score, they're looking at your actual money. And they're going, okay.

Speaker 5 And I've never heard of that.

Speaker 4 I know, but it's true.

Speaker 2 Do you want to know that I bought my house with manual underwriting?

Speaker 2 I had a zero credit score.

Speaker 4 And so,

Speaker 4 just to clarify, not just for you, but anybody listening, a zero credit score is not the same as a bad credit score. That's right.
A bad credit score is you haven't done well borrowing money.

Speaker 4 And so you have a bad credit score or a low credit score. A zero credit score is just as good as a high credit score.
It simply means I don't borrow money.

Speaker 4 And if you were to look at my credit report, it would say indeterminable.

Speaker 4 And so there are plenty of places. Churchill Mortgage is one that we talk about all the time.
They're everywhere in the United States except New York and Alaska. And they do manual underwriting.

Speaker 4 And literally all they look at, I'm going to tell you right now, they look for 12 months of trade lines.

Speaker 4 And that could could be you pay your cell phone bill, you pay your utilities, that sort of thing online, or I'm sorry, on time. They look for 12 months of your rental history.

Speaker 4 So if he goes to rent, he just needs to show 12 months I paid my rent on time. And then they want to see your...

Speaker 2 I'm sorry.

Speaker 5 I just said uh-huh.

Speaker 4 Okay. And then they want to see what you made over the last year.
And they'll ask for your pay stubs, just like anything else. And then they go, okay, great.

Speaker 4 And if he happens to be self-employed, they might ask him for his tax returns, but that is it.

Speaker 4 And I just want to to clear the air for anybody you're you're helping so many people right now because a lot of people don't know that this is a thing and it 100 is and once you know that all of a sudden it's weird because ken the credit score don't mean a thing but a chicken wing at that point so true and i love what you just said the zero credit score tells people hmm this is somebody who's very solid with their money And that's all they care about is are they going to get paid?

Speaker 1 Yeah. So when you prove, as Jade, you know, really laid out well, that you can pay, your son's got nothing to worry about.

Speaker 1 So, that fear is natural, Jennifer, but it's because you've never heard what she just laid out. Most people never have.

Speaker 1 But she's right, go do your homework on it, check her on it.

Speaker 2 I promise you.

Speaker 1 Oh, yes, it's popular to do these days.

Speaker 2 Fact check us.

Speaker 1 I think you'll like what you see. This is the Ramsey Show.

Speaker 13 Hey, guys, it's open enrollment time for health insurance. And if you have ever felt overwhelmed trying to figure out your healthcare costs, you are not alone.

Speaker 13 For a lot of families, healthcare is one of the biggest line items in the budget, and it gets more confusing every year. But you don't have to settle.

Speaker 13 Christian Healthcare Ministries is a biblical and budget-friendly alternative to health insurance, and I am proud to recommend them.

Speaker 13 With CHM, you are joining a community of believers who actually help share each other's medical bills. Yeah, it's true.

Speaker 13 Members have shared over $12 billion in healthcare costs since CHM started nearly 45 years ago. And it's simple.
You choose your provider with no network limits.

Speaker 13 You submit your eligible bills online and other members help share your expenses. CHM has program options for every stage of life, whether you're single, self-employed, or raising a family.

Speaker 13 Y'all, open enrollment has a lot of people scrambling right now, but CHM lets you join anytime. So go to chministries.org slash budget to check them out.
That's chministries.org slash budget.

Speaker 1 All right, time for our Ramsey show question of the day, which is brought to you by WhyReFi, default to private student loans, could feel like a wall you'll never be able to climb, but why ReFi may be able to help you get over it.

Speaker 1 They'll work with you to explore a payment plan tailored to your situation. You can go to whyrefi.com slash Ramsey.
That's the letter Y, R-E-F-Y dot com slash Ramsey.

Speaker 1 It may not be available in all states.

Speaker 4 All right. Today's question comes from Randy in Delaware.
He says, I've been seeing a lady for over a year and she has borrowed over $1,700

Speaker 4 from me that she has not paid back.

Speaker 2 I'm Sunday.

Speaker 4 I'm a single father with over $20,000 in debt. My wife passed away and I'm living on just my salary.
I have a nine-year-old son and my daughter is 24.

Speaker 4 I am serious about this lady, but it bothers me that she has not fulfilled her promise to pay back my $1,700 after nine months. How do I approach her about this concern?

Speaker 2 Randy. Listen.
Oh, man.

Speaker 2 Randy.

Speaker 4 Sometimes I read these questions ahead of time and sometimes I don't because I just want to. feel the impact in the moment.

Speaker 1 What are you feeling right now?

Speaker 4 I'm feeling impacted.

Speaker 2 How? Well,

Speaker 2 it's two parts to this, Randy.

Speaker 4 There's two parts to this. A,

Speaker 4 you lent her the money. And whenever you loan money, there's always a risk, right? There's a risk that the person's not going to repay it.
That's the biggest risk.

Speaker 4 And then the secondary risk is that because they don't repay it, or even if they do, it will affect the relationship in some adverse way, right?

Speaker 4 Those are the two biggies of why we say don't loan money. And you hit the nail on the head on both of them.
Number one, she's kind of being a scrub and not paying the money back.

Speaker 4 And how are you supposed to feel good about this relationship? Because now it has the ability to create like a little bit of bitterness.

Speaker 4 You take her out on a, Randy takes, let's call her, you know, Sheila. Randy takes Sheila out on a date.
Let's call her Sally. Randy takes Sally out on a date.

Speaker 4 He's not going to feel good about picking up her state dinner.

Speaker 2 He's already bothered. He's already bothered.

Speaker 1 I'm going to tell you, okay, I'm going to talk to Randy like I would be talking to Randy if he showed up here and we had a cup of coffee.

Speaker 1 I would look at Randy and I'd say, Randy, I'm going to tell you what the problem is.

Speaker 1 You are serious about this woman, Sally, aren't you? And he'd go, Yeah, I'm serious about it. I go, Yeah, and she knows it, doesn't she?

Speaker 1 And he would go, She knows it. She's not paying the $1,700 back ever because Sally, is that her name?

Speaker 4 Sally, Sally.

Speaker 1 Sally Sheila.

Speaker 4 Sally Ragged.

Speaker 1 Sally is banking on

Speaker 1 closing the deal.

Speaker 4 Is this what you think?

Speaker 1 I know.

Speaker 1 I know what's going on. He has made her feel like she's the the one.
He told us in a simple email that he is serious about her. She knows he's serious.

Speaker 1 She thinks the $1,700 is already their money and he's going to forgive it because he's going to put a ring on it.

Speaker 4 I don't know. Sally could be a rolling stone.
Sally could be a rolling stone that's like, hey.

Speaker 1 Sally is.

Speaker 4 I'm just here for a little while.

Speaker 2 All right.

Speaker 1 Let me flip this for a second. I might get in trouble for this with you, but I'm going to do it.

Speaker 2 Okay. Get in trouble.

Speaker 1 If you and Sam were dating, okay, this is not you and Sam real life, but this is you and Sam. Okay.
This is male, female. Got you, got you.
And Sam loaned you $1,700

Speaker 1 and you had not paid it back. Same deal, nine months.

Speaker 1 You're a human being. This isn't a Jade or a Sally.
This is a human being and a woman who feels like her man is serious about her. Are you going to be in a hurry?

Speaker 1 Is any woman going to be in a hurry to pay the $1,700 back?

Speaker 4 I think if I really really was

Speaker 1 think that you guys are going to be an item and get married?

Speaker 4 If I was on, like if I was dating Sam, that means I'm like, I've got respect. And not that I would ever do this, but if I had borrowed money, I feel like it's a great opportunity for me to

Speaker 1 pop the question.

Speaker 1 You're going to pay that back. If you think you're going to be two instead of one?

Speaker 1 Come on. This is a human.

Speaker 4 I'll tell you, it's hard for me to put myself in that position because I can't even imagine being in that position.

Speaker 1 I'm going to tell you what's going on. This woman feels like I think he's in love with her.

Speaker 1 And because he's in love with her, she doesn't have to pay the money back because it's their money. There's a guy in the lobby with his thumb up in the air.
He knows I'm spitting truth right now.

Speaker 4 But then why would they even like that's why he should have never lent her the money? But why would they even come up with those terms if they were on that level? At that point, it's just like terms.

Speaker 4 Well, he's clearly saying like she was supposed to pay it off within a term because it's been after it's past nine months.

Speaker 1 No, it wasn't a a term.

Speaker 1 He's saying here, it's been nine months. Where's my money, honey? Yeah.
But the problem is she said to him in a moment of weakness, I need $17.

Speaker 4 But my point is this.

Speaker 4 My point is. And he gave it to her.

Speaker 1 And now she's never going to pay it back.

Speaker 4 Ken, you don't go 2015, Rihanna, talking about pay me what you owe me. Don't act like you forgot to the woman you love and want to marry.
You don't do that.

Speaker 1 I know. That's what, well, but that's the point I'm making.
He needs to reconcile the fact he's never getting this money back.

Speaker 1 So he needs to close the deal.

Speaker 4 Close the deal.

Speaker 1 And then get rid of the resentment or it's going to end badly is what I'm getting at. My point is, is I'm not throwing shade at Sally Sheila or whatever you called her.
I'm saying, Sally.

Speaker 1 I think this is a pretty typical human behavior when you're in a pretty close relationship.

Speaker 1 He's the last person she's thinking about paying back.

Speaker 2 Oh, here's my other point.

Speaker 4 You don't borrow money.

Speaker 1 I know. Yeah.
He's already done it. So I'm saying to him, pal,

Speaker 1 you need to marry this woman.

Speaker 4 I think I'm just going out here.

Speaker 1 Because he's not getting the money back.

Speaker 2 Okay.

Speaker 4 I'm the exact opposite. I think she's a Rolling Stone.
I think that he's vulnerable

Speaker 4 because he's gone through a lot and found a nice looking lady. And she might is taking a little bit of advantage, but she has no aim.

Speaker 2 And would you also, okay.

Speaker 1 Would you also agree she probably has other debts? Yeah. That are much bigger than what she owes this report.

Speaker 4 That's what I'm saying. He's never getting the money back.
Okay.

Speaker 1 That's what I'm saying. He's not getting it.
He ain't getting hands up if you agree with me in the lobby look at this this is really wow you guys are really giving this lady a lot of credit

Speaker 4 i'm giving her zero credit no i'm just saying she's not she's never paying it back that's what they agree no she's not like i agree she's never paying it back but i also don't think they're getting married raise your hand if you think they're gonna actually end up getting married okay see there you go there you go so

Speaker 1 well now in this case

Speaker 1 He uh well now this changes everything. See I wasn't even going that far down the road I was telling him to cut his losses.

Speaker 2 Yeah, yeah.

Speaker 1 But now, if like they cut their relationship losses, he needs to do that sooner rather than later. Agreed.
But I think he's smitten.

Speaker 2 Yeah.

Speaker 4 Well, she's shown a piece of, I feel like she's, if what you're saying is true, I feel like she's shown a piece of herself because there's a little integrity there because they're not married yet.

Speaker 4 He hasn't even proposed yet. It'd be one thing if it was his fiancé.
He hasn't even proposed. If you borrow money, you should pay it back, whether it be to

Speaker 4 a credit card company, your grandma, you know, whoever it is. If you borrow money, pay it.

Speaker 1 But relationship one-on-one here, you shouldn't even borrow money or lend money to your fiancé. You would agree with that?

Speaker 4 I would agree with that. I am a like, I have a hard line on that.
I think that if you would like to give someone money and you have the money to give, you should give it.

Speaker 4 In his case, it doesn't even sound like he didn't, he clearly did not have the money to give. That's why he made it a loan.
And I think that's when you get into hot water is

Speaker 4 if you don't have it to give, sometimes you can't give it.

Speaker 4 And that's just hard, you know, when people you love are asking.

Speaker 1 If Stacey and I were dating and she asked me for money, I'd say, honey, you got to marry me because it's all yours at that point anyway. Until then, I'm not loaning you a nickel.

Speaker 1 I mean, I'm just telling you.

Speaker 4 I'll tell you what, Sam Warshaw did do. This is terrible.
This is a bad, this is, oh,

Speaker 4 don't do this. This is he, okay, my car.
I was driving a Jeep Liberty and the, the, the AC and the heat on it was bad. And so when winter came, my heat wasn't working.

Speaker 4 And he got in my car and was like, you've been driving around like this. And I'm like, yeah.
He's like, I'm going to get you a car. And I thought he was being a hero.
He co-signed a car for me.

Speaker 1 This is pre-you guys getting up.

Speaker 4 This is pre-us getting. No, we weren't even married.
We weren't even married.

Speaker 1 Oh, you were dating.

Speaker 4 He co-signed a car for me. We were dual.

Speaker 2 We were just about to get out.

Speaker 1 This is all part of your story. Yeah.

Speaker 2 This is all part of your story.

Speaker 4 And that's why I'm saying.

Speaker 1 Seeing the light.

Speaker 4 That's why I'm saying, like, you might be right that he was smitten because I think that a guy like love goggles will make you do anything.

Speaker 1 That's what Sam did with you. Yeah.

Speaker 4 But it's a good thing I married.

Speaker 2 That's a fact. I married him.
Otherwise, he's up on the creek.

Speaker 1 Here's the problem with our guy. What's this guy's name?

Speaker 1 Randy. Randy.
Listen, here's the problem. Every guy wants to be a knight on the horse.

Speaker 4 Exactly.

Speaker 2 A knight in shining armor.

Speaker 1 And it's one of our kryptonite problems. And this girl bat her eyes at him and she cried and he swooned and gave her $1,700.
And he might as well lit it on fire.

Speaker 1 All right.

Speaker 4 Not getting that money back.

Speaker 1 Just don't do it ever. It muddies any relationship, whether it's romantic or any kind of relationship.
Don't give friends or family alone.

Speaker 1 Times are tight, and one of the easiest ways to save more money right now is to stop overpaying for your phone plan.

Speaker 1 Boost Mobile gives you one low monthly price, just $25 a month for unlimited talk, text, and data. And that price never goes up.

Speaker 1 With Boost, there are no contracts and they're so sure you'll love it, they've got a 30-day money-back guarantee. So take the easy win and switch today at boostmobile.com slash Ramsey.

Speaker 1 That's boostmobile.com slash Ramsey.

Speaker 14 Restrictions apply. See boostmobile.com slash Ramsey for details.

Speaker 1 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Dayton is joining us now from Vancouver.
Dayton, how can we help today?

Speaker 1 Hey there, guys.

Speaker 15 Yeah, calling in, just I'll make it as brief as I can.

Speaker 15 It's a bit of a mindset kind of thing My wife and I quite a few years ago We were had quite a bit of debt about 22,000 and we had worked hard to pay that off and then since then we've had three kids bought a house and then a lot of things have happened and racked up quite a bit more debt My my mind my mindset question to you is what are some ways that we can kind of protect ourselves from doing this again.

Speaker 15 We're just starting the baby steps and we don't want to get out of debt and then get back into it.

Speaker 15 There's a lot of shame around like sticking to our budget, like looking at our finances and stuff.

Speaker 15 So I'm just wondering if you guys can kind of help us with the mindset of getting out and staying out.

Speaker 4 So my first question would be,

Speaker 4 back in the day when you paid off the $22,000,

Speaker 4 what did it look like to pay that off?

Speaker 4 Was it painful or was it kind of like we're going to do this? And once it was done, it was done?

Speaker 17 Initially, it was kind of painful.

Speaker 15 Like, I can't believe I did this. Credit card company saw me coming from a mile away at 18.
And then I just worked. I was at a job where I could work tons of overtime.

Speaker 15 So I pretty much worked seven days a week, 60, 70 hours a week kind of thing. And we just, we worked through it.
And it felt really good when we got out of debt.

Speaker 15 It was a grind getting through it.

Speaker 2 How long did that take?

Speaker 15 I was able to pay that off in about 11 months, I think it was.

Speaker 1 So without giving us too long of a story, what happened? Because you said, and then things happened and we accumulated debt again.

Speaker 1 What type of things?

Speaker 9 Well, in that window,

Speaker 15 pretty much right after that, we got married and then we had our first child and then we had our second child.

Speaker 15 And then I did a career change that cost me quite a bit of money to go to school down in Texas. And then

Speaker 15 we bought a house.

Speaker 15 And then we had a third child.

Speaker 15 And, you know, when you buy a house to make it what you want it, you end up spending money thinking that it's going to be okay so what kind of career change was this what are you doing now

Speaker 15 I'm a firefighter now and what did that cost you

Speaker 15 cost me about twenty thousand dollars to get into that do you still have a loan on that

Speaker 1 no so well yeah I guess it's part of my one of my line of credits I used to get into that and so I'm hearing one of your line of credits and that's what we did to make the house great for three kids

Speaker 15 yes

Speaker 4 interesting Yeah.

Speaker 4 I'm just thinking about what you're saying. And

Speaker 4 first off, you haven't paid off the 103 yet, right? So you haven't allowed yourself to go through that process. I'm one, I'm a person that I think everything is in the process.

Speaker 4 The first time it took you about 11 months. The truth is the debt wasn't that drastic.
It probably was uncomfortable to pay it off, but you were able to do it.

Speaker 4 I think now because more is on the line and you're going to feel this one a lot more because it's you, it's your your wife, it's your kids, and you're going to have to change your lifestyle, which you're going to feel that.

Speaker 4 I have a feeling that this one is going to stick a little bit more. However, you asked, what's the mindset that you need? And I think I hear the mindset that got you into it.

Speaker 4 And I'll try to give you an idea of the mindset that got you out, that's going to keep you out, which is, I think,

Speaker 4 Dayton, a lot of times when we're in our life and we've got our money, we start to develop kind of an i deserve mentality and it's not it doesn't have to be ugly it's just kind of like i work hard i deserve to spend right i deserve to spend money on the things that i want i deserve to have the lifestyle i want i deserve to have the car and the house i want after all i've worked hard and if we're not careful that can really really really do us in because that's what's happened to you you listed it you're like well we had kids and then i wanted this career and then i wanted this house and it's kind of like what other thing would cause you to go into debt other than the fact that you think you simply deserve to have those things?

Speaker 4 Right. I mean, is that fair enough? Yeah.

Speaker 2 Yeah, I would agree with that.

Speaker 4 And then the other side of that I deserve is you're also seeing what other people have. And it's like, well, how do they deserve that?

Speaker 4 I deserve what they have because the people around me have the house, the people around me have the car.

Speaker 4 And so you're, you're making that comparison and you're trying to keep up with the things you see. Is that fair enough?

Speaker 15 Yeah, yeah, to a degree. I mean, like, I never, we don't buy any nice cars.
We don't have any car payments or anything like that.

Speaker 15 It's been, but yeah, totally lifestyle, like wanting to do things with the kids, wanting to make sure they got a nice space, pretty place, you know, that kind of stuff.

Speaker 4 And so I think the mentality going out of it, and don't get me wrong, I think coming out of $103,000 of debt is going to change you in a different way than coming out of $22,000 of debt is.

Speaker 4 But I want you to adapt. the mentality of what you truly deserve, which is you truly deserve to have a good night's sleep without debt over your shoulder, right?

Speaker 2 Ding, ding, ding.

Speaker 4 You deserve to feel good about the money that you earn and that it's enough for your family and not feel like it's not, you know, because the opposite is what makes you go out to get debt.

Speaker 4 The opposite is what I'm contributing is not enough.

Speaker 4 What I'm bringing and earning is not enough. Therefore, I must.
And then you go to all these debt sources, but you deserve to feel good about the life you're providing for your family.

Speaker 1 Dayton, I want to flip that. She's right, but let's just for a second, let's be real gut level honest with each other, the three of us.

Speaker 1 What are the emotions you're feeling, the negative emotions attached to this debt and those debt payments and that interest and all the things that you now obviously regret, which is why you called today and you said, how do I keep from doing this again?

Speaker 1 What is the most negative emotion? Describe it.

Speaker 15 Well, I would say it's like massive amounts of shame because I was in a good position and I've made good money for a lot of years. And I'm back to making good money now.

Speaker 15 And it was a lot of shame to like look at the finances. I knew they were getting out of hand.

Speaker 15 but I literally like every time I think to open up the banking app or do my budget, my immediate thing is like, oh, don't do that, man. Like

Speaker 15 you're just

Speaker 10 looking your failure in the face, right?

Speaker 15 So that would have been how it got out of hand for sure.

Speaker 1 How much stress? How much pressure do you feel?

Speaker 15 Oh, lots. Like, especially now looking at my new two-month-old baby and like thinking, like, because I'm the sole income earner in our family.

Speaker 15 Thankfully, my job allows for that. But

Speaker 1 what if I told you I could snap my fingers and take away the shame and take away the stress? Well, how would you react to that? I know it's a fantastic old question, but how would you feel?

Speaker 1 How would you feel?

Speaker 15 I know it would make me feel a lot better, that's for sure, if I'm not carrying that baggage around, right?

Speaker 1 Okay. So my two cents on this is the way that you keep from ever doing this again is to, in these moments, on a daily basis on a daily basis, remind yourself how awful this feels.

Speaker 1 And I don't ever want to feel that again.

Speaker 1 Like that to me, if you talk to somebody who's lost a ton of weight, somebody who beat some type of an addiction, and I've been able to interview people like this, I've known people my personal life.

Speaker 1 If you trace their story of when they recovery, you know, we've heard Dave say this for years on this show and on stages, it's the I had it moment.

Speaker 1 You've talked about that. You talked about it earlier in the show today.
I think you have to bottle this emotion not to stay with it.

Speaker 1 And I really want you to focus on getting out of that shame because we all carry shame and it's powerful.

Speaker 1 But I do think you need to sit with it long enough to go, I don't ever want to feel this again. And it's actually really simple

Speaker 1 to never get back in this again. You can get out of it.
You've done it before. You're going to do it this time.
But to never get back in again, it goes, I don't ever want to feel that again.

Speaker 1 And I have total control as to whether or not I ever feel this way again. And I think that will be really helpful.
So get your chin up, walk the baby steps. You can do this.

Speaker 1 Throw off that coat of shame. You're not a deadbeat.
You're not a jerk. You're not a loser.
You're not a bad man. You made a bad financial decision.

Speaker 2 Welcome to the club, pal.

Speaker 1 You're going to be okay.

Speaker 7 Hey guys, George here. You know I hate debt, and that includes sleep debt.
I've been there, fatigue, low energy, brain fog, and that's why I switched to Casper.

Speaker 7 My Casper mattress helps me sleep easier, cooler, and deeper. And now every bedroom in my house has one.

Speaker 7 On top of that, Casper ships free, comes with a 100-night trial, and if you don't love it, they'll come pick it up. So let's ditch the sleep debt and build sleep wealth.

Speaker 7 Go to Casper.com slash Ramsey and use promo code Ramsey for 30% off all mattresses and up to 35% off everything else. That's casper.com slash Ramsey, promo code Ramsey.

Speaker 1 Exclusions Apply.

Speaker 1 The Ramsey Show continues. I'm Ken Coleman.
Jade Warshaw is alongside 888-825-5225 is the phone number. Laura is joining us now in Los Angeles.
Laura, how can we help?

Speaker 5 Hi.

Speaker 5 My husband and I are in a lot of debt from a small business we started, and I need you to guide me

Speaker 5 on how to get out of it, I guess.

Speaker 1 All right, give us some numbers.

Speaker 5 Okay, so we're talking, if we're combining personal and business, it's about like $150,000.

Speaker 2 Okay.

Speaker 4 How much is from the business, though? I'm just curious.

Speaker 5 Well, I would say all of it because we put in from personal into the business, but just the bit like the credit cards would be like $90,000. Ooh, wee.

Speaker 2 Okay.

Speaker 4 And what's the rest of the

Speaker 4 debt?

Speaker 5 What's the rest of the credits?

Speaker 5 They're all uh credit cards.

Speaker 4 All of it's on all 150s on credit cards?

Speaker 17 Yes.

Speaker 2 Oh, my word.

Speaker 5 We even opened up personal loans to pay for the credit card so we can have more space for the credit cards. It's a mess.

Speaker 4 So how many credit cards total?

Speaker 5 I would say there is about seven.

Speaker 4 Seven. And then you said you have personal loans open too.
Is that included in the 150 or is that what is that? Yes.

Speaker 5 That's included in the 150.

Speaker 4 Okay, so your thought is like, hey, we use these personal loans to pay down the credit card to clear up more space so we can borrow more on the credit card?

Speaker 2 Exactly.

Speaker 1 What's your income situation? Are you guys still working in the business?

Speaker 5 No, no.

Speaker 5 It took us a while, but we brightened up to close that business. Well, it's still open, but it's not running.
Okay, gotcha. So what's your income?

Speaker 5 My husband makes about, I would say, $120,000, and I make $80,000.

Speaker 2 Where does that money go? Our income is not...

Speaker 5 We each have jobs.

Speaker 4 Got it.

Speaker 1 Okay. So we got $200,000 combined income.

Speaker 2 Correct. Okay.

Speaker 1 Do you have any other debt outside the $150,000? I know she asked you that, but I'm just totally clarifying. This is all of your

Speaker 2 Well,

Speaker 5 yeah, we have a mortgage, a car,

Speaker 5 if that's what you're asking.

Speaker 4 Yeah, we want to know. So

Speaker 4 tell us about your cars, your student loans,

Speaker 4 anything that you owe money towards that you make a monthly payment towards, we want to know about it. So go ahead and tell me your mortgage.
I'm just curious. What do you owe on it?

Speaker 5 I would say we owe it like $400,000. So monthly, I paid $3,300 for mortgage.
Okay.

Speaker 5 The car, I paid $700 a month. I think there's like $19,000 left on it.

Speaker 5 We have a leased car that's $400 a month. My son's school is $850,000 a month.

Speaker 5 My school is a little bit more.

Speaker 2 Is that private school or is that daycare?

Speaker 5 Private school.

Speaker 4 Okay, how old is he?

Speaker 2 Four.

Speaker 2 Okay.

Speaker 2 Okay, keep going.

Speaker 5 My school one is $400.

Speaker 5 So our personal loans, his is $1,600 a month, mine is $850 a month.

Speaker 4 Okay. And how much, but that personal loan is included in the $150 you told me earlier?

Speaker 5 Yes.

Speaker 4 Okay. Tell me, when you guys get your paychecks, Like after everything's taken out, what do you take home every month?

Speaker 4 What's your check look like?

Speaker 5 Both of you combined?

Speaker 5 Yeah, mine is about $2,000 and his is about, oh, no, that's every other week.

Speaker 2 So $4,000.

Speaker 5 About

Speaker 5 $9,000 for him.

Speaker 4 Okay, that's the good news.

Speaker 1 So $13,000 net. And just a real quick question.
I don't want to get bogged down on this, but why is the four-year-old in a private school?

Speaker 5 Because

Speaker 5 I don't want him to learn anything that.

Speaker 1 Right, but is it pre-K?

Speaker 5 Yes.

Speaker 2 Okay.

Speaker 1 So it doesn't have to be in pre-K.

Speaker 1 I'm just wondering, right up there. There's some money there.
There's some money to be saved on some home care maybe versus, but I don't, there's bigger issues going on.

Speaker 1 But

Speaker 1 y'all got to like cut back big time.

Speaker 2 There's big, big time.

Speaker 1 There's the bumper stickers that Jade's about ready to walk you through.

Speaker 4 Well, I think that's, I mean, jumping off with Ken's point could be a good place to start. You know, the only way to get out of debt is there's two methods you could invoke here.

Speaker 4 You could work more, right, to have more margin.

Speaker 4 You could also cut back on your budget to find more margin or you can do a combination of both.

Speaker 4 And to Ken's point, that school might be a great place to start because I don't know what you were going to say as far as like, I don't want them to learn certain things.

Speaker 4 It might be some of the same feelings that I have. And my kid is in private school, but for right now, it's okay.

Speaker 4 Or in there in daycare. And for right now, it's okay.
So it might be worth it for you to invoke that when they get a little bit older.

Speaker 2 Could be that it's your kid.

Speaker 1 Yeah, I was going to say, yeah, and I may step on toes here, but since we're here, I'm going to go ahead and say it because I know a lot of Americans are thinking this.

Speaker 1 So I'm going to go ahead and say it.

Speaker 4 Get in there. You might have to put your hat on.

Speaker 1 I don't remember anything from my 12th grade year.

Speaker 2 Your four-year-old, no matter what they're trying to teach the kid.

Speaker 1 I mean, I get it. I'm not in LA.
I get it. But I don't know.
I would be looking to save $800 a month tonight.

Speaker 2 Yeah.

Speaker 4 I mean, at the end of the day, what matters most is what you teach them at home.

Speaker 2 Yeah.

Speaker 4 But again, we're, I know we're really getting into your personal life.

Speaker 1 I know, and I got to be careful. I'm not judging you.
I'm just saying,

Speaker 1 you know, the four-year-old, we could cut that. That's $800 a month.
That's $9,600 a year. It's a lot.

Speaker 4 For where you're at right now, it is a lot. We just want to highlight that it is a lot.

Speaker 4 Next thing is, I'm looking at possibly both of these cars. I want to know about how you can get out of this lease.
When is this lease over?

Speaker 5 Mary's doing,

Speaker 5 I would say like four months.

Speaker 4 Okay, and then your option, you just turn the car in and you're out?

Speaker 5 Yeah.

Speaker 4 Okay. So I would do that.
Don't try to buy back the car or nothing like that. Just get out of the lease.
And in the meantime, do you have any money saved?

Speaker 5 No, everything is gone.

Speaker 4 Okay. Then what I'd be doing, knowing that this lease is about to come up, I'd be like, we got to stack up $3,000 because when this lease lease goes away, we need to be able to buy a car in cash.

Speaker 4 And that's what that's kind of the car plan. So, write that down in your notebook as when we've turned in this lease in three months.

Speaker 4 In three months, we'll also be buying a three to four thousand dollar car. I know you have the margin in your budget to do that.

Speaker 4 Okay, so that deals with one car. Let's talk about the nineteen thousand dollar car.
Do you know what that car is worth? The payment was kind of high, didn't you say it was like $700?

Speaker 5 Yes, it's it, I think we bought it at fifty

Speaker 5 uh thousand.

Speaker 4 Okay, do you know what it's worth now?

Speaker 5 I don't.

Speaker 4 Okay, that's your second piece of cart homework. I want you to go on KellyBlueBook.com, look at private sale, because it sounds like if you bought it at 50,

Speaker 4 and judging by the height of your payment, I feel like you've been paying this off kind of fast. Am I wrong?

Speaker 5 No, you're, yeah, you're right.

Speaker 4 Okay, so you might actually, you might not be upside down. And if you're not, I would still get out of this and get into something something cheaper because the $700 payment, you need that money.

Speaker 4 And so now we've just found $1,100 in your, in your budget with these cars and you need every dime of that to go towards paying off this credit card debt. The good news is,

Speaker 4 I mean, you guys have a good income. It's not wonderful for LA, but it's wonderful for the rest of the country.

Speaker 1 Yeah, and it's doable.

Speaker 1 And again, not telling you what to do with your kid in school, but if we take the 800 on top of that, now we're right at the doorstep of two grand that we found in your monthly budget.

Speaker 1 That goes a long way to paying off $150,000 in debt. Okay, because now you're looking at if we just take $2,000 a month that you found and you put it towards debt, that's $24,000 a year.

Speaker 1 That's a long haul, right? And this is a drastic change of your lifestyle. You're not going on vacation.
You know, you aren't going out to eat.

Speaker 1 You guys are going to have to really hustle.

Speaker 1 But again,

Speaker 1 my co-host today, this is a woman who and her husband paid off half a million dollars.

Speaker 1 She needs a little pep talk as we go into the break here because mindset wise, what has she got to be thinking right now?

Speaker 4 You've got to be thinking, the hard part is you're making a good income and to not be living in that income feels like, oh man, I've been working hard.

Speaker 4 But the time will come when you do get to do that. So just hold on.
If you clean up this mess, you're going to enjoy your income like you never have before.

Speaker 4 Right now, you've kind of faux enjoyed it with all these things on payments, and it's not all it's cracked up to be.

Speaker 4 But if you walk through this journey, you're going to get to enjoy the fruit of $220 plus thousand dollars a year with no debt and payments.

Speaker 4 You can send your kid to the school that you want to, and you don't have the stress associated with it because you'll actually be able to afford it.

Speaker 1 You can do it. You can.
Appreciate the call. All right, quick break.
Jade Warshaw, Ken Coleman. This is the Ramsey Show.
We'll be right back.

Speaker 1 Don't let big grocery bills spoil your holiday plans. Shop at Aldi first.
They've got USDA choice meats like beef, pork, and even your turkey, along with fresh produce, holiday desserts, and more.

Speaker 1 And you'll find all of them at the lowest prices of any national grocery store. A family of four can save up to $4,000 a year by shopping at Aldi.

Speaker 1 You don't need a membership or some loyalty app either. So stop overpaying this holiday season.
Go to Aldi.us to find a store near you. That's Aldi.us.

Speaker 14 Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

Speaker 1 Welcome back to the Ramsey Show America. Thrilled that you are with us.
It's where we help you win in your money, in your work, and in your relationships. I'm Ken Coleman.

Speaker 1 Jade Warshaw joins me this hour. The phone number is 888-825-5225.
And Jade, across the studio, through the glass on the debt-free stage in the lobby are some folks.

Speaker 1 And that means we've got a debt-free screen coming your way.

Speaker 1 Gary and Melissa, welcome.

Speaker 19 Thanks. Thanks.

Speaker 1 All right, where are you guys from?

Speaker 19 From Belle Point, Minnesota.

Speaker 1 Bell Point, Minnesota. Is that near Minneapolis?

Speaker 19 Just south Minneapolis. Okay, good boy.

Speaker 1 Are you just excited to see the sun this time of year?

Speaker 2 Yep.

Speaker 1 There it is. All right.
So, all this way to do a debt-free screen, very exciting. So, let's hear the numbers.
How much debt did you pay off and how long?

Speaker 20 We paid off $165,000 over 47 months.

Speaker 2 All right. Wow.

Speaker 1 And what was your range of income?

Speaker 20 We started about a $160 and ended at about $200.

Speaker 1 Ooh,

Speaker 1 what led to the bump in pay?

Speaker 20 We just leaned into our careers. We both earned promotions and stuck to it.

Speaker 1 What do you mean by promotions?

Speaker 20 He moved from a factory position to a safety manager, and I just kind of took different roles at my current company.

Speaker 1 And what are you doing?

Speaker 20 I'm a client relationship manager.

Speaker 1 Okay, fantastic. That is awesome.
All right. What was all this debt? What did the 165 get comprised of?

Speaker 20 By the time we finally got down to just writing everything out, we had a HELOC that we had been leaning on.

Speaker 20 We had a car, and then we had a credit card that we were just kind of paying off every month.

Speaker 20 So that was probably the smallest and easiest one to pay off.

Speaker 1 Okay, so pretty good size HELOC.

Speaker 20 Yeah, it was about 40,000.

Speaker 19 Yeah, we used it to remodel our basement and then kind of kept it and kept it going.

Speaker 1 Okay, all right. So tell us, 47 months ago, what happened? What was the catalytic moment to lead you on this journey?

Speaker 20 Yeah, so he was going back to school.

Speaker 20 It was his last semester, and we had found we were kind of, we were trying to cash flow it, but we'd get a little short, so we'd pull a little bit out of the HELOC.

Speaker 20 We were getting kind of sloppy, and his last semester came up, and the tuition payment was going to be due, and we finally said, this is it, we're doing it in cash.

Speaker 20 And we had about two and a half months before that was due, and we did it, and that was kind of our biggest victory as we got started.

Speaker 4 That's awesome. So you're funding education out of the HELOC.

Speaker 20 A A little bit, yeah. Cash flowing it, but then we were kind of filling the gaps.
We were just being sloppy. There was no reason for it.

Speaker 4 Yeah. So what was kind of like you hit the moment of like, listen, we're not going to do this anymore.
We're going to start paying cash.

Speaker 4 How did you find Ramsey? Like, how did you find like this, and this is the way we're going to do it going forward? Yeah, we knew about it before that.

Speaker 20 We just weren't following it. We kind of thought we were doing good on our path.
You know, we were kind of budgeting.

Speaker 20 But then it was just like, just tired of the revolving debts. Like this year, it was a HELOC.

Speaker 20 A couple years before it was a a 401k loan it just kind of things we were just it was a shell game we were just kind of moving the debt around and just got tiring

Speaker 4 it does get tiring so you're working the baby steps is this you're getting on a budget is this you guys picking up extra work or is this like listen we're just tightening up on the budget we're just getting very clean on what we're doing tell us about that yeah it was pretty much just us um tightening it up as much as we could, cutting out any unnecessary expenses.

Speaker 19 We didn't have any side hustles, but we tried to do more experience-based activities with the kids. You know, we do a lot of camping, going up to the cabin, stuff like that.

Speaker 19 So just try to cut out those unnecessary expenses.

Speaker 1 Do you do the ice fishing in Minnesota? Do you guys do that? We do.

Speaker 19 And I guess spear fishing is probably.

Speaker 2 Yeah, I've got a lot of people who are listening. I learned about that.

Speaker 1 I don't want to go down the rabbit hole for the rest of people who don't care. But you talked about camping, all that.
And I heard about how you do the ice fishing. Like, it's like a whole thing.

Speaker 1 It's like a whole experience. Everybody goes out and all that jazz.

Speaker 2 Yeah. It's fun.

Speaker 1 Yeah. No, I don't think it it is.
I'll be honest. I heard it described and I didn't think it was fun at all.
But much, much love to you on that. All right.
So let's talk about this.

Speaker 1 Was there a beginning point that you guys said, okay, we'd heard a little bit about this Ramsey stuff. Now we're going to do it.
Was it hard or was it we were on the same page?

Speaker 1 What was the beginning of that journey like when you finally said, all right, we're committing? How, I mean, was it hard for you or did you just roll right through it?

Speaker 20 It was a little bit of getting getting on the same page.

Speaker 20 We started with that first goal of getting that last tuition payment and then from there it was adopting the budget, which I wrote out the budget on the nerd.

Speaker 20 It took them a little bit to get into the budget, but once we started rolling, then we were both fully bought in.

Speaker 19 Yeah, I was reluctant at first.

Speaker 19 The idea of getting on that budget was a little rough.

Speaker 19 But once you saw it start to really work, That's when I brought bought in all the way.

Speaker 4 So relate to that a little bit because I know a lot of people dislike budgeting, right? They hear the word budget, they think it's a punishment, they think it's something that's holding them back.

Speaker 4 What changed that for you? Because I love talking to people who don't like budgeting and changing their minds.

Speaker 19 So, the one thing that was neat is Melissa printed out this kind of like detris, tetris.

Speaker 19 You know, like all the little pieces equal to a certain amount of money, and we had that sitting on the refrigerator, and then every time we were paying off any amounts,

Speaker 19 Melissa was really good at filling in those spaces.

Speaker 20 I like to fill it in.

Speaker 4 So you like to feel the milestone. Like you want to feel the milestone.
You're celebrating. It's kind of a fun process.

Speaker 1 Yeah, and it was a way to see that work.

Speaker 19 And we did the same thing with our house where we printed off a picture of like balloons holding up our house. And each one was a certain dollar amount.

Speaker 4 Now, wait a minute. Did you pay the house off? We did.
What?

Speaker 1 Oh, you didn't tell us.

Speaker 2 Wait a second.

Speaker 4 I was digging.

Speaker 1 I was like, $200.65. I was trying to figure out how big was that credit card.

Speaker 2 Listen.

Speaker 4 You paid your house off?

Speaker 2 Wow.

Speaker 2 Wow.

Speaker 4 Okay. Okay.
Okay.

Speaker 4 Yes. We just got into it.
Guys, I need you to shout that from the rooftops.

Speaker 2 Yeah.

Speaker 1 Congratulations. Oh, home.
All right. Now, who are your biggest cheerleaders on the way?

Speaker 20 I would say we've got some family that was walking the journey along with us. And then my parents.
We just like to talk money. You know, there's more that's caught than taught.

Speaker 20 And it was those conversations that just kind of kept us focused and motivated.

Speaker 2 Wow. That's awesome.

Speaker 4 So what's next? You got a pay-for-home? No debt. Life is good.
What do you do? What do you do to celebrate? And don't say ice fishing.

Speaker 20 Well, we came here.

Speaker 20 And then we've got some fun projects for the house. Now that it's all done, we've kind of, it's time to have some fun there.

Speaker 2 Yeah.

Speaker 4 And you don't have to take out a HELOC to do it. That's the best part.

Speaker 2 Exactly. Speed of cash.
That's so fun.

Speaker 1 All right. I see the kiddos over there.

Speaker 1 Let's bring them up and then we're going to talk about them for a second. We've got, tell us who they are and the ages.

Speaker 20 Yeah, we've got Charlotte is 13, Kelvin is 11 and Caleb is 7.

Speaker 1 Okay, and so how?

Speaker 1 Quickly did you bring them into this journey and then how involved were they in the conversations around this? Because you just said,

Speaker 1 Melissa, that you and your family talk about money. I'm guessing these kiddos have a pretty good idea about what we're about to do.
Yeah.

Speaker 20 Yeah. Oh, yeah, they do.
They listen to the podcast with us a lot of the time.

Speaker 20 We have the game at home. Okay.
We've played that a few times.

Speaker 20 You know, our debt trackers were up on the fridge, so they saw it the same as we did. So it was really a family journey.
They knew kind of what the goal was and why we did things the way we did.

Speaker 1 Okay. And no griping, no complaining.
They were pretty good soldiers.

Speaker 20 Nah, they're pretty good. Okay.

Speaker 2 Pretty easy. That's awesome.
I love that.

Speaker 1 Well, this is really exciting. Well, listen, before we do the screen, I want to let you know we're also going to give you some gifts here.
One is Dave's Total Money Makeover.

Speaker 1 That's for you to give to someone else because

Speaker 1 you guys have actually done

Speaker 1 And then Baby Steps Millionaires, Dave's latest book. And that's where you guys are headed

Speaker 1 probably pretty quickly with the income you guys have. So those are our gift to you.
All right, let's do this. Is the team ready? The kiddos, have they been practicing? They're old enough.

Speaker 1 I've got to hear you guys. All right, I want to hear all those different tones coming out.
Let's do this thing. We've got Gary, Melissa, Charlotte, Kelvin, and Caleb, all from the Minneapolis area.

Speaker 1 They paid off $165,000 in 47 months, starting out making $160,000 and ending at $200,000. Let's go, team.
Let's hear your debt-free scream.

Speaker 2 Three, two, one.

Speaker 2 We're debt-free.

Speaker 2 I heard them all. I heard them all.
Did you?

Speaker 1 I heard every voice.

Speaker 1 You're the professional musician.

Speaker 1 I picked up all three voices. I don't know what you call it.

Speaker 2 I heard all of them. There was no harmony, but I heard all three.
Well, you're tough. You're a tough one to.

Speaker 1 It's like a judge from American Idol. That's right.
I would never want to do that in front of you. But this is a great example of how a family's tree, as Dave has said for decades, changes.

Speaker 1 So very, very cool. True that.
Awesome stuff. All right.
Don't go anywhere. We've got to take a quick break.
Jade Warshaw, Ken Coleman with you. This is the Ramsey Show.
We'll be right back.

Speaker 1 Everywhere you turn this time of year, someone's telling you to swipe a card now and pay later. But that mindset always leads straight to debt and post-holiday stress.

Speaker 1 Fairwinds Credit Union takes a different approach. They're here to help you win with money.
Fairwinds doesn't push credit cards.

Speaker 1 They help you build savings and stay debt-free, just like we teach, with the baby steps. And to do that, Fairwinds created the Smart Bundle with Ramsey fans in mind.
It's more than a bank account.

Speaker 1 It's a tool to help you live with intention.

Speaker 1 The Smart Bundle includes a no-fee checking account, a high-yield savings account, and the exclusive Ramsey BeWeird debit card, which says debt is normal, be weird, right on the front.

Speaker 1 So every time you swipe it this Christmas season, it's a reminder that you're choosing a different path to spend no more than you actually have, to avoid that January budget hangover, and to be free from debt traps.

Speaker 1 Go to fairwinds.org slash Ramsey to open your smart bundle and get your Ramsey BeWeird debit card today. That's fairwinds.org slash Ramsey, insured by the NCUA.

Speaker 1 Welcome back to the Ramsey Show. We're here to help you win with your money, win in your work, and win in your relationships.
Triple 8-825-5225.

Speaker 1 888-825-5225. Thrilled to have you with us.
I'm Ken Coleman, and Jade Warshaw is alongside. All right, so

Speaker 1 what do we got here? We got a Ramsey Network app question. Is that right?

Speaker 1 Is this audio, James, or am I reading this question? Just reading this one. Okay, I'm sorry, folks.
I didn't do my production notes, and I thought, I'm not going to try to fake my way through it.

Speaker 1 I'm just going to ask my erstwhile captain in there. And sometimes we listen to these, sometimes I read them, and I didn't pay attention to my notes.

Speaker 1 Kids, this is why you study before you take the test. All right.
All right, today's Ramsey Network app question. By the way, the network app, I just want to say this very briefly.

Speaker 1 This is fantastic stuff.

Speaker 1 We'll remind you later in the show, but we have just exclusive content over there that only people who have the app, and you can get it in the App Store or Google Play, can listen.

Speaker 1 It's just a part of the show that no one else can get. We'll remind you about that later, but fantastic app and a lot of great content over there.
So this question is from Jane.

Speaker 1 She asked, after many stops and starts in college and throughout my career, I realized I'm passionate about filmmaking, in particular helping to fight and advocate for people who don't have a voice.

Speaker 1 I've since learned that it's hard to make money in this profession. Can you give me some advice on some things that I can do where I can actually earn a living? Oh my.

Speaker 1 That's an open-ended question there.

Speaker 1 Well, here's the quick advice is

Speaker 1 you need to find work,

Speaker 1 different types of gigs in many different lanes that all have one thing in common, that allow you to use what you do best, that's your skill, to do work that you really, really enjoy, that produces a result that matters.

Speaker 1 So you say you're passionate about filmmaking. Okay, we love the artistic filmmaking.

Speaker 1 And then you add in the specifics of the results that you want to produce from filmmaking ideally would be to fight

Speaker 1 bad things, to advocate for people who don't have a voice. So there is an activist, an advocating type of film or art that you want to put out.

Speaker 1 So for instance, this could be documentary filmmaking, obviously. We see a lot of this.
Yeah.

Speaker 1 And so someone has told you or you have listened or you have started the process of trying to get into filmmaking and what you've discovered and what she's discovered, Jade, is this thing called a ladder.

Speaker 2 Yeah.

Speaker 1 Got to make. And on the lower rungs of the ladder, Jade,

Speaker 2 we don't make a whole lot of money.

Speaker 4 Peanuts sometimes.

Speaker 2 Yeah.

Speaker 1 And so if I might, could I go back into the Wayback Machine?

Speaker 4 Way back. Take us way back, back in time.

Speaker 1 I'm 31, 32, and realized that I really want to go into broadcasting but I do not have a degree in broadcasting I had no experience in broadcasting I just had what I thought was the gift of gap but I mean hadn't tested it yeah I have three little kids you know my kids I do they were littles

Speaker 1 and that means I got to provide and fabulous wife and a puppy and the whole nine yards in the house and and so um the reality was is I began to do the work like Jane had to discover okay what does it look like to work in the film industry what does it look look like to work in broadcasting?

Speaker 1 And what I found out pretty quickly was on those rower lungs of the

Speaker 1 lower rungs rather of the ladder, it wasn't going to feed the family. Yeah.

Speaker 1 So what I did is what my advice for Jane is or anybody that's listening is I had to have a day job that took care of business.

Speaker 1 And I was then going to have to part-time, get into broadcasting, get a little experience here, get a little experience there, and over time, step into it slowly.

Speaker 1 In other words, words, embrace the latter. So you got to have something else to fall back on while you're trying to get into filmmaking.
So

Speaker 7 I wish that the advice was clearer.

Speaker 1 I wish it was better. It's not.
If that's what you want to get into, any type of artistic form of telling stories or whatever,

Speaker 1 if you could find other causes, maybe you go work for a nonprofit.

Speaker 1 you know,

Speaker 1 and you actually then begin to do video work for them instead of going into the film industry and then telling stories. That's about all I can ideate on there.

Speaker 1 You want to add anything to that without having her on the phone?

Speaker 4 Yeah, I agree. I think you're right.
There's a part of this you have to pay your dues. And I do think

Speaker 4 when it comes to the arts, when you're first starting out, there is a part of that dream that you have that you do have to generalize in the beginning because you got to take opportunity.

Speaker 4 And it's kind of like

Speaker 4 music artists. When they first get signed, they have to, you know, the machine decides what they're going to do.

Speaker 4 It's not until they're in it for a while that they finally get to go, go, now I do the songs I want to write.

Speaker 4 Now I do it my way. And so it might be a while for her before she's doing what she labeled here as, you know, helping people fight and advocate for people.

Speaker 4 Just understand it could be a while before you do it exactly the way that you want to do it, and that's okay.

Speaker 1 You know what song I'm thinking about? I don't. I did it my way.

Speaker 2 How about that?

Speaker 1 I got to sing.

Speaker 4 Yeah, my grandfather used to sing that. I love that.

Speaker 1 Yeah, there you go. James is so happy right now.

Speaker 4 Good job, Ken. Yeah, I thought it was on key.

Speaker 2 Nice.

Speaker 14 I'm really impressed, actually.

Speaker 1 That was was really good. I thought it was on key.
A little bit of a crooner kind of feel there. We're going to move on quickly.
Paul in Hartford, Connecticut.

Speaker 2 Paul, how can we help?

Speaker 16 Hello, guys. How are you? Good.

Speaker 1 What's going on?

Speaker 21 Um, so basically, I'm kind of in a predicament right now. Um,

Speaker 21 last week, we're at a family reunion. Then my dad came up to me, and he just basically asked me to take out a loan for him of $20,000.

Speaker 16 Um, for what?

Speaker 2 Just casually,

Speaker 21 Yeah, just casually.

Speaker 2 For what?

Speaker 21 He says he has some business going on. He didn't give me any details.

Speaker 16 I know I don't need to take the loan out. Okay.

Speaker 21 I just want to know how to basically, you know, tone him down without having any issues.

Speaker 1 Okay, clearly and quickly. Hey, dad, pops, listen, thought about it for about two seconds.

Speaker 1 No.

Speaker 1 Not going to do it. Love you, dad.
You're awesome. Not happening.

Speaker 1 What would you add to that?

Speaker 4 I thought he was going to say, I just want to ask you guys what was wrong with them.

Speaker 2 But you said. Well, I think he's kind of wondering that, too.

Speaker 4 Yeah, listen, I'm glad that you know that you're not going to take out this loan. I think the way to do that is just simply say,

Speaker 4 Dad, I don't borrow money, and so I can't help you borrow money.

Speaker 1 That was much nicer than the way I said it.

Speaker 16 Yeah, right.

Speaker 2 No, Paul, seriously.

Speaker 1 Jade's right. I think you're respectful.
Yeah.

Speaker 2 Be respectful.

Speaker 1 But you're like, Dad, I don't believe in debt, and

Speaker 1 I can't do this.

Speaker 1 I'm so sorry. If you want to be really polite and really respectful, I just roll differently in that situation.

Speaker 1 Like if a family member, especially my dad, comes to me, I'm like, Dad, you know what my honest answer would be? This is not what I'm recommending.

Speaker 1 But I literally would have been like, if he rolled up on me at a party like that, I looked at him and went,

Speaker 1 do you have a fever? Should you lie down? Can I get you a cold rag and a glass of water?

Speaker 1 Have you lost your ever-loving mind? That's what I would have said to my dad.

Speaker 4 Is this normal? Has he asked, like, is this a habit that he'll kind of hit you up for some money here and there?

Speaker 16 Not me, but some other family members, yeah.

Speaker 4 Okay, because it felt so casual. I wondered if it was normal.

Speaker 2 Yeah.

Speaker 4 Is it that he wants you? I'm just curious. Is it that he wants you to just fully take it out in your name or does he want you to co-sign or what is it?

Speaker 10 Fully take it out in my name.

Speaker 2 Oh, yo. Oh, gosh.
Yeah. That's different.
Okay.

Speaker 4 Yeah. I mean, you just got to say no.
And

Speaker 4 at this point, resist making it about the details. I know I just asked details, but resist making it about like, dad, you didn't even show me a plan or you didn't even tell me what you want to do.

Speaker 4 It's not even about that. It's just got to

Speaker 2 dad.

Speaker 4 I can't take out debt for you. I'm sorry.

Speaker 1 Good luck with that. His dad has a plan.
I think if he'd have asked for details, his dad would have told him a fish story. I just don't think there's anything there.

Speaker 1 Yeah, Paul, listen, we're having a little bit of fun with what is a really tense situation. I just think you got to take the high road, really high road, but do not have a conversation about it.

Speaker 1 To the extent that when you tell him, you make it clear to him, there is no conversation. This isn't like he gets a shot at a little bit of a negotiation on this.
Yeah.

Speaker 4 How will he react?

Speaker 21 Honestly, I was just shocked.

Speaker 16 I didn't react at all. I was just shocked because it's, you know, it's a huge amount of money.

Speaker 2 But how do you think?

Speaker 1 How's he going to react when you tell him no?

Speaker 4 I'm not sure, but he's not gonna be happy oh you're sure that chuckle was a chuckle of experience yeah it's uncomfortable come on man yeah yeah this is tough sorry man i hate that that happened that's that's awkward yeah it's an awkward situation to get put in let me take this above paul real quick give our audience 20 seconds on why they should never loan family any money as a general principle oh well what dave ramsey would say is it makes thanksgiving different dinner taste different i've done it by the way i've borrowed money from my mother-in-law who is a wonderful, generous woman, and it's not on her, it's on you feel it.

Speaker 4 No matter what, it doesn't matter how great or nice they are. You feel the weight.

Speaker 2 Don't do it.

Speaker 1 There you go. Great hour, Jade Warshaw.
Thank you, America, for listening. This is The Ramsey Show.

Speaker 1 Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio alongside Jade Warshaw and Ken Coleman. Steve is now joining us in Columbia, South Carolina.
Steve, how can we help today?

Speaker 6 Yeah, hi, Ken. Hi, Jay.
It's great to be speaking with you guys today.

Speaker 21 Yeah, good to talk to you.

Speaker 16 So I've got a,

Speaker 6 I'm on the cusp of finalizing a divorce and we came to a mediated settlement. And as part of it, basically there's a 50-50 split of the 401k.

Speaker 6 But then I also have to come up with $100,000 in cash in 90 days to buy her out of the house. And then additionally, there's 150K

Speaker 6 lump sum alimony payment over five years. So kind of two questions is basically, how would you guys recommend coming with the 100K?

Speaker 6 Because I got some advice from the lawyers that I didn't really appreciate. And clearly they weren't part of the Ramsey program.
And

Speaker 6 then I treat the alimony payment going forward. Do I treat it as a debt in the baby steps or as like a line item in the budget going forward?

Speaker 1 Why don't we address that one first? Jay, tell him about where that goes in the budget.

Speaker 4 The $150 over five years. Have you calculated it out and seen what that looks like monthly?

Speaker 6 Yes, about $2,500 a month.

Speaker 4 Can you afford that?

Speaker 6 And it fits.

Speaker 2 Yeah. Okay, good.

Speaker 4 So, yeah, that's a line item on the budget. I would do it that way, especially if you can afford it.
What's your income?

Speaker 6 About $180 a year.

Speaker 2 Okay, good.

Speaker 6 So it ends up being about like $8,000 a month.

Speaker 2 Okay.

Speaker 4 Okay. So...

Speaker 1 The $100K in 90 days to buy out the house.

Speaker 4 Yeah, why'd you agree to that?

Speaker 6 So it's definitely the house.

Speaker 6 In terms of everything else available in the area,

Speaker 6 there's no way I'd be getting anything close to this. And,

Speaker 6 um,

Speaker 2 but I'm talking about the time, the term,

Speaker 4 the time.

Speaker 2 Like,

Speaker 4 do you have a hundred, do you have a hundred thousand dollars?

Speaker 6 Yeah, so that's exactly it. I think, I think it was a matter of kind of signing it and not really paying attention to that 90 days.
Um, I've got about 50 to 55K in cash right now.

Speaker 4 Okay, well, that's a good start. How much is your car worth?

Speaker 2 Uh, so uh, not much.

Speaker 6 So, it's a 2007 Subaru Forrester.

Speaker 1 What happens if

Speaker 1 let's come at this thing from another angle? I'm trying to figure this out for you. What happens if in 90 days you don't have 100K?

Speaker 1 What is the kick in in the contract?

Speaker 1 The agreement?

Speaker 6 So it's just part of the court order. So I think it'd be going back in front of the judge.

Speaker 4 I think that's your best bet.

Speaker 4 This was a bad negotiation on your part or on your lawyer's part because

Speaker 4 you can't get the money in 90 days. And so, when this goes back in front of the court, you need to have a better plan of what that is.

Speaker 2 Why not sell the case? I was going to say the original,

Speaker 6 well, the original thought was

Speaker 6 basically kind of part of the quadro from the rest of the 401k, so my half of the 401k used part of it to be able to pay her off.

Speaker 4 That was your plan?

Speaker 6 That was the original thought. And then, again,

Speaker 6 the lawyers even suggested doing a home equity loan, which I flat out just

Speaker 4 a bad idea. Because you have to put yourself, you have to reverse engineer, like you have to reverse the situation and say, if I were in any other setting, would I borrow from my 401k to buy a house?

Speaker 4 No, you wouldn't. Would I take out a personal loan, you know, to up the annie on my house? No, you wouldn't.

Speaker 4 And that's the way I'm looking at it. I think that.

Speaker 4 You either need to give yourself more time. If this is like something that you're like, I love this house.

Speaker 4 I don't want to give it up i'm never going to have a house like this again you either need to give yourself more time i mean i've talked to people where there's years to come up with the money not that i want you linked to her for that long but uh do you have kids

Speaker 1 uh adult kids so she's in college now but yep okay so where's your ex going she's just going to go rent somewhere

Speaker 1 uh starting a new career in another state okay i here's here i'm gonna come back to this because i i now again i've never walked through this before so jade and i are kind of on the same well I'm thinking about you could do maybe a cash out refi.

Speaker 4 I don't know if there's because you have to take her name off it anyway.

Speaker 1 I would sell the house. And do you have any equity in it at all?

Speaker 6 Yeah, and that's basically what I'm buying out of.

Speaker 1 How much equity do you have in the home?

Speaker 6 About 200K in equity.

Speaker 4 So, why wouldn't you? I mean,

Speaker 1 I don't understand given that equity stake that you have.

Speaker 1 This is just a house and it's got a bunch of pain attached to it. You are single.
You got all this money that you're going to have to pay out over five years.

Speaker 1 I personally, and again, I don't know what you think about this.

Speaker 2 I view it a little differently. I know.

Speaker 1 I'm giving you another train of thought. I'm not going to advocate for my point of view.
I'm going to say, if it were me, I'd sell the house.

Speaker 2 Are there kids adapted?

Speaker 6 I know exactly what's going on in my brain.

Speaker 4 To sell it?

Speaker 6 No, no, no, no. Just the back and forth.

Speaker 2 So there's, yeah, like you said, there's a lot.

Speaker 1 I like a clean start in this situation.

Speaker 4 There's, there's that, but then there's also, I mean, you did make a good point earlier where you said with the market and when you bought this house, you might not be able to get something like that again.

Speaker 4 And I do feel that if emotionally there's not the attachment that

Speaker 4 Ken and I think there might be, and you want to keep the house, yeah, standard is you would refi, get her name off of it, and then you would pull the cash out when you refi, and then she would get her portion.

Speaker 4 The only reason I kind of disagreed with Ken's sentiment initially is because the 100,000 is her money. It's not you giving 100,000 of your money.

Speaker 4 At this point, now that is her money because you're separate. So

Speaker 4 there's a different way to look at that. It's like, hey, I'm just, I'm just giving her her money.
I'm not giving away my money, if that makes sense.

Speaker 2 Right.

Speaker 4 So that's, if you want to do the 90-day deal, that's how you would get it.

Speaker 4 But Ken has a good point. Do you really want to be in this house or is it worth it to you to maybe get less house and have a fresh start? That's the question.
Only you can answer that. Yeah.

Speaker 1 Or rent for a bit. I mean, your life's not over.

Speaker 21 So.

Speaker 6 Yeah, I definitely know that it's starting over.

Speaker 1 Yeah, and it's not over. It's starting over.
And so there's a whole lot of new things coming your way. So again, I don't want to advocate for it.
That may be too aggressive.

Speaker 2 How long were you married?

Speaker 1 You know?

Speaker 6 20 years.

Speaker 4 20 years. Oh, listen.
Ken may have a point. The kids? Do you have kids?

Speaker 1 Yeah, remember they've got the... Oh, that's right.
That's right. Is it just one? College.
Yeah.

Speaker 6 Just one.

Speaker 4 Ooh, yeah. You got your work cut out for you in terms of sentimental thoughts versus fresh start thoughts.

Speaker 2 I mean, you make a good investment.

Speaker 6 I'm working through those.

Speaker 1 I'm not advocating, but I am going to say, because I like when you push back. So keep pushing on this.
But in your shoes, if you sell this house. then you're able to pay her her money

Speaker 1 and have that done, set aside, put it away, get it over with. That's what I would do.

Speaker 1 I would want a clean break if I could do it. And I'm just looking at the numbers.
You're going to have to pay her

Speaker 1 $100,000 in 90 days, and then you got $150,000, which is alimony, over five years.

Speaker 1 That's a lot of money coming out of your pocket.

Speaker 4 It could be nice to have a smaller.

Speaker 1 And I'm just saying I might rent for a year, reset my life. I don't think renting for 12 months is a bad idea for a guy in your shoes.
Get rid of the house, move on into a new chapter of life.

Speaker 4 And another, okay, I'm going to throw something else in there. And this is soon.
So don't, don't be mad at me, but you'll move on at some point and meet another lovely lady. I'm assuming.

Speaker 4 And do you want to bring her into that house or do you want to bring her into, you know, fresh start, Steve?

Speaker 6 Yes, and we'll see about that one, but sure.

Speaker 4 I know I jumped ahead, but do you see what I'm saying? Like, there's

Speaker 4 begin with the end in mind is what I'm saying.

Speaker 1 Yeah, I I don't know. I don't know why I feel that way, but that's what I would do in that situation and just start fresh.

Speaker 2 You're not wrong, Ken.

Speaker 1 Start fresh, get her the 100,000. That's her money, to your point,

Speaker 1 and now work on the rest of it. Oh, divorce sucks.
Hate that for you.

Speaker 2 Yeah, me too.

Speaker 13 Hey, friends, our Black Friday sale is live. So if you're already feeling the pressure of holiday shopping, just take a deep breath.
You'll find great gifts for everyone on your list.

Speaker 13 And with prices as low as $6.99, you won't wreck your budget. Pick up best-selling books like the Total Money Makeover or Baby Steps Millionaires for just $12.

Speaker 13 Skip the shopping chaos, friends, but don't wait. These deals won't last.
Visit ramseysolutions.com slash store.

Speaker 4 You're listening to The Ramsey Show. I'm Jade.
Next to me is Ken Coleman, taking your calls this hour about your life, your money, your business, your relationship, your career.

Speaker 4 Whatever's on your mind, we'll be here to help.

Speaker 4 We'll go to Los Angeles, California, where we've got AJ on the line. What's going on, AJ?

Speaker 11 Hi, Jade and Ken. How are you both doing?

Speaker 2 Great.

Speaker 4 If I do say so myself. Yes.

Speaker 1 What's going on?

Speaker 18 Awesome.

Speaker 16 Awesome.

Speaker 11 Well, first of all, thank you guys for taking my call. I'm calling because I'm starting a real estate media business here in California.

Speaker 11 I'm very excited for it, and I have support from friends and family.

Speaker 11 Just the one thing that keeps bothering me, I guess I could say, is just a fear of AI.

Speaker 11 I have this fear that AI could essentially replace my work and could make it less valuable. And I really just wanted your guys' opinion on it.

Speaker 1 Yeah, be more descriptive. Give me a 30-second description of what your company's service is going to be.
What do you do for folks? Yeah, of course.

Speaker 5 Do you real estate?

Speaker 4 There we go.

Speaker 11 It is a new company, but we're going to specialize in video work and

Speaker 11 more lifestyle work for agents who sell higher-end properties just to help elevate their brand and make it stand out from the rest of the market.

Speaker 1 So you're a production company, and you're going to be shooting video of of their homes, the inside of the homes, outside, making the homes look great, but also making them look like those big shots

Speaker 1 on those reality shows. Selling sunsets.

Speaker 4 Selling sunsets.

Speaker 1 Thank you. Yes.
That's what you're going to do.

Speaker 1 But you're a video production company.

Speaker 16 Exactly. Okay.

Speaker 1 So

Speaker 1 AI.

Speaker 1 How is AI going to affect the video production industry? Have you done any homework on this? Have you begun to see trends?

Speaker 11 So I've just seen things where editing work is being replaced, where a lot of the background work is being replaced, like stuff behind the scenes.

Speaker 11 So I'm just seeing that trickle in into that part of it. Not really seeing it on the

Speaker 11 front end, but it kind of worries me.

Speaker 1 Well, but let's keep playing this out. So I'm leading you down a path here.
So if AI tools allow you to do the editing or your team to do the editing quicker and better,

Speaker 1 does that replace you or does it enhance your business?

Speaker 11 I would say it enhances the business.

Speaker 1 Yes, it does. Absolutely, it does.

Speaker 1 And so what you have to look at is, is,

Speaker 1 okay, so

Speaker 1 I had cigars with a very successful movie producer about two weeks ago, Jake.

Speaker 1 And he told me, point blank, and this guy, like he's producing the latest rock movie that's coming out next year. So this guy's big time.

Speaker 1 And he said to me and was showing me on his phone a full movie trailer

Speaker 1 that was AI start to finish. Not one real person in it.

Speaker 2 That's wild. All right.

Speaker 1 Now, I bring this up to say, in this case, if I was an actor in the actors' unions, and that's already happening, that's why the latest strike happened in large part.

Speaker 1 What is AI going to, is AI going to replace real actors? Because if you can do a blockbuster action film and not pay an actor 20 million.

Speaker 4 That makes me so mad.

Speaker 2 I'm getting angry sitting here, Ken.

Speaker 1 So AI would threaten actors, no question.

Speaker 4 100%.

Speaker 1 And he told me as much.

Speaker 4 I'm getting mad. You cannot replace creative people doing creative things.
I'm just putting that out in the way.

Speaker 2 I understand that. It's not to you.

Speaker 1 And he doesn't want to, by the way. He's not pro that.
He's just going,

Speaker 1 somebody's going to do it. It's going to be crazy.
So everybody's going to have to adjust.

Speaker 2 All right. Now, all of that.
No one will ever connect to it.

Speaker 4 I'm just saying. So, AJ.

Speaker 1 You, someone's going to have to always do the filming. Someone's always going to have to consult the realtors on their brand.
AI cannot do what a human doesn't program it to do. Make sense? Yeah.

Speaker 1 So I would run it through that. Instead of just letting your fears run wild, go, wait a second.
Will the human touch be more needed than ever in my industry? And I think the answer is yes. It is yes.

Speaker 1 AI cannot do what you're going to do.

Speaker 4 And the truth is, let's put it through,

Speaker 4 you know, obviously AI is new territory for a lot of folks, but in essence, in many ways, it's not, right? There's always been a tool available to do something easier. That's right.

Speaker 4 And as professionals, we get to decide: are we going to be the person who picks up the tool or not, right? And so there's always a vacuum cleaner.

Speaker 4 Some people don't want a vacuum, so they call a housekeeper. There's always

Speaker 1 that one that just roves around.

Speaker 4 Yeah, that's right. There was technology.

Speaker 2 Yeah.

Speaker 4 And so, I mean, right now,

Speaker 4 there are more apps than ever before to make, you know,

Speaker 4 digital media and all that kind of stuff. But some people are like, I don't want to learn how to use those apps.
So they still go to

Speaker 4 companies that'll do that for them. So the point is,

Speaker 4 as long as there's tools, there's always going to be people who go, I don't want to learn how to do that. And you're still going to have the ability,

Speaker 4 the ability to do it for them.

Speaker 1 Here's what, last point on this.

Speaker 1 AI, folks, for our large audience, if you learn how to work with AI and use AI and also find yourself in industries where the human touch will always be premium, then you're going to be fine.

Speaker 1 Yeah, I like that. It's going to make us want human more.

Speaker 2 It is creative. It really will.

Speaker 4 I, you know, I'm a creative at heart. I hate the idea.
I hate that I'm hearing music that is by

Speaker 4 not real people. I hate this idea of not real people being actors.
I'm like, people need people. If there's nothing we didn't learn from 2020, it's that people need human touch and human contact.

Speaker 4 And humans create art and art is a reflection of culture. And there's, I can't understand what the world would be like if that continuum was disrupted.

Speaker 4 Anyway, this is another conversation for another time.

Speaker 1 But anyway, if it gets to that, you'll find me somewhere

Speaker 1 in my own restaurant, James, in the Caribbean, serving people.

Speaker 4 Listen, be me out.

Speaker 1 Spinning yarns, telling jokes.

Speaker 4 Spinning yarns. All right, let's see if Carl has a yarn to spend

Speaker 4 in Sacramento.

Speaker 4 Carl, spin us,

Speaker 4 spin us a spin us a yarn.

Speaker 22 Okay.

Speaker 21 All right. Can you hear me?

Speaker 4 Yeah, we can. What's up?

Speaker 18 Awesome.

Speaker 22 So

Speaker 16 I'm 45 years old,

Speaker 11 married.

Speaker 22 Nothing safer retirement, regrettably. I do not own a home.

Speaker 23 I'm currently renting a home.

Speaker 23 I have about $250,000 in

Speaker 23 a high-interest statings account.

Speaker 23 And I started a small business about five years ago, which I currently still own.

Speaker 16 But obviously, getting older without

Speaker 22 any backup on the investment or even a home is worrisome.

Speaker 22 So I've, and obviously, and I'm married and I don't want to leave my wife without a home or, you know, without some resources in case something were to happen to me.

Speaker 4 Sure. Does she have resources in her name?

Speaker 23 No.

Speaker 10 Nope.

Speaker 2 Okay. No, she's

Speaker 23 same situation.

Speaker 22 She has a good job, but that, you know, that doesn't last forever.

Speaker 2 So, okay.

Speaker 23 So anyway, so I've decided it'd be a good idea to sell my business where it's at so I can start playing catch up on some of those important items.

Speaker 2 Okay. If you sold it, what would it bring?

Speaker 2 So

Speaker 23 after taxes, so after I pay capital gains to Uncle Sam, I'll probably have net about $500,000 left.

Speaker 2 Okay.

Speaker 23 So combined with my $250,000, I'll be at about $750,000 liquid cash that I can deploy in one direction or the other. My first thought is.

Speaker 2 And then what would you do for work?

Speaker 23 I'd probably go start another business.

Speaker 17 It's probably the same thing.

Speaker 2 And you wouldn't need capital for that?

Speaker 4 You could just go right to it?

Speaker 22 Yeah, I'm still going to have a lot of money.

Speaker 23 The purchase isn't, he's not going to be purchasing all the assets.

Speaker 12 So I'll still have some of the assets so I can literally start the same business.

Speaker 4 Okay.

Speaker 2 And what do you think you'd earn?

Speaker 4 I'm sorry. I'm just trying to get the numbers before we hit the clock.

Speaker 2 No problem.

Speaker 22 No problem.

Speaker 23 Obviously, day one, I would be at zero, but I think

Speaker 23 I could probably get to about 4,000 net within six months.

Speaker 1 Okay.

Speaker 17 I could probably within a year, I could be, you know, comfortably, you know, six, six to seven thousand

Speaker 22 net, probably within a year. Okay, good.

Speaker 23 Worst case scenario, if things didn't go well,

Speaker 23 because I am pretty established in my industry, I can go work for another company if I thought things weren't really gaining traction, and I could probably get a job pretty easily making 80 to 100,000.

Speaker 2 Excellent.

Speaker 4 So the question is, do you take, what do you do with the 750?

Speaker 18 Exactly. Yep.

Speaker 23 So I'm in, I'm in, as you guys mentioned, I'm in Sacramento, so nothing's cheap in California.

Speaker 2 Yeah.

Speaker 23 And so just a small, modest home in my area, you're looking about $550,000.

Speaker 2 Okay.

Speaker 23 Well, nothing special, but it's, you know, it's a roof over the head. And, you know, it's, you know.

Speaker 4 The truth is, you're going in the right direction. I'd want to stabilize.
That's the biggest line item on all of our budgets. It's rent or mortgage.

Speaker 4 So I'd want to stabilize that as quickly as possible. You've got the money.
If you can pay for something in cash and not have a payment, I love that for you and start investing the rest.

Speaker 4 When you get this money together, you need to be investing 15% of your gross every single month. This is The Ramsey Show.

Speaker 1 When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different.
No one accidentally wins with money.

Speaker 1 You have to have a game plan, and that begins with our get started assessment. Go to ramseysolutions.com slash start,

Speaker 1 answer some questions, and we'll show you what steps to take next. Don't stay stuck.
Take control of your money starting today. Go with ramseysolutions.com slash start.

Speaker 4 You're listening to the Ramsey Show. I'm Jade.
He's Ken. Give us a call.
The show is live. So if you want to talk to us, call in.
888-825-5225.

Speaker 4 We'll take your call about your life, your money, and Ken will hit you up with that career advice. Although you do jump in on the money and you do a good job, Ken.
Oh, yeah.

Speaker 1 You know, there's a microphone in front of me. That means I'm going to say something.
And it's going to be good.

Speaker 4 All right. We hope.
Lee is here. He's from Washington, D.C., our nation's capital.
What's going on, Lee?

Speaker 18 All right. Thanks so much for taking my call.

Speaker 16 I was actually calling because I recently, yesterday, I was laid off from my job, and I was contemplating if I should pay off my credit card debt, which I was initially going to pay off before I got laid off, but I'm wondering if I should just change my priorities.

Speaker 1 What happened?

Speaker 18 The company, so I worked at a startup and they just couldn't afford to continue to pay me.

Speaker 16 I had just started that job in July, July 1st.

Speaker 18 So this is the first month.

Speaker 18 I got the job through internship because I was interning with them for two months, and then they hired me on, and now

Speaker 16 they've laid me off because they couldn't afford to pay me.

Speaker 1 Well, first of all, I'm sorry about that.

Speaker 1 That stinks. And

Speaker 1 it's happened to all of us.

Speaker 1 What were you doing for them? them?

Speaker 16 Software sales. Okay.
So I was a sales development representative.

Speaker 1 What's your confidence level? I'm sure your brain has been running 100 miles an hour. What's your confidence level of getting another sales job

Speaker 1 or something else in that field or just anything? What's your confidence level in the next 30, 60, 90 days?

Speaker 18 I'd say in the next

Speaker 18 I think that I could confidently say that I could be placed in the same role with a different company, at least in the next 60 days.

Speaker 1 Can you survive from a cash standpoint? What's your cash situation, your bills, and everything that you've got responsibilities for?

Speaker 15 I do.

Speaker 16 Yeah, I can survive right now.

Speaker 18 Yeah.

Speaker 10 I have

Speaker 16 about

Speaker 10 four months of expenses saved.

Speaker 1 Do you have any debt besides the credit card? Yes.

Speaker 12 Yes, I do. Okay.

Speaker 4 Okay. Yeah.
I mean.

Speaker 1 Jade walking through that whole situation.

Speaker 4 In this situation, I hate that you got laid off. And you're kind of in a

Speaker 4 transition. And so we would tell you to pause the baby steps.
So for all intents and purposes, you're on baby step two, which is you have debt and you need to clear out your consumer debt.

Speaker 4 And so because this kind of storm has happened, we'd say pause that, stack up as much cash as you have. It sounds like you have four months of expenses, but you also have debt.

Speaker 4 And so if I were you, I'd continue to make the minimum payments on all your debt because you want to stay current, you want to stay on top of things, but I wouldn't pay anything over it until you land that next position.

Speaker 12 Okay.

Speaker 1 And can I please, please, please, please ask you to get to work very quickly. It doesn't even mean, you know, if you've got some things that are working in the industry, that's fine.

Speaker 1 Play out the interview process, but I would be doing some type of part-time job or maybe something full-time until I had something, something that's just a gig kind of a thing, the gig economy, you know, and

Speaker 1 keep income coming in. Here's why.
Let's say that this thing plays out like you think it's going to, and within 60 days,

Speaker 1 you're, you're back and up and working. Now all of a sudden we're right back in the baby steps like Jay just told you.
And now that four months worth of expenses is all going towards the debt.

Speaker 1 But I want you to keep income coming in in this time. That's where you actually turn a really sucky situation.
into a

Speaker 1 better situation by going, all right, I got laid off. That sucks.

Speaker 1 Taking a pay cut, but I'm at least bringing money in.

Speaker 1 And Jade, if he could, let's say, make enough money in a gig to take care of his four walls, and I'll let you explain that, then I like his position once he gets back up on the horse.

Speaker 4 That's excellent. Matter of fact, I might keep a little bit of the gig while I get back on the horse so that you can pay off this debt as quickly as possible because that's the goal.
I want you to,

Speaker 4 once you land the job, the money that you have in savings, I want you to use that to pay off the debt. That's the baby steps.
Baby step number one is you keep, you keep $1,000 or you get $1,000.

Speaker 4 You stash it away. That's your starter emergency fund.

Speaker 4 Baby step two is you pay off all of your debt except your mortgage using whatever extra money you have laying around and to Ken's point, side hustling and doing all those other things.

Speaker 4 So you said you have four months of expenses. At this point, if I were you, that money goes to the debt.

Speaker 4 And then after the debt is cleared up, you save back up that four months of expenses or up to six months if you wanted to.

Speaker 4 And then you move on from there and you start investing at baby step four so that's how i would run this if i were in your shoes very good call uh let's go to maggie she's in tampa florida what's going on maggie

Speaker 5 hi thank you for calling for taking my call you got it um i'm getting yeah i'm getting a little like anxious we were my husband's 76 and i'm 69

Speaker 5 and we just bought a house We wanted to downsize from the one that we had that was bigger.

Speaker 5 And I'm getting a little anxious because the house is taking a little long to sell. It's been on the market for six months.

Speaker 4 So you sold one,

Speaker 4 you moved into another house before you sold the other one?

Speaker 2 Yes. Woo, mama.

Speaker 2 Oh.

Speaker 4 And so are you about to be paying two mortgage payments?

Speaker 5 No, no, no. The other one is paid off.

Speaker 4 Okay, good.

Speaker 5 The one that we're selling is paid off.

Speaker 2 Okay. Okay.

Speaker 5 So we thought it would sell really fast, but with the market, the way it's going, it's been a little longer on the market.

Speaker 2 How long?

Speaker 5 six months.

Speaker 1 What is your real estate agent telling you about your current listing price?

Speaker 5 Oh, we just lowered it some.

Speaker 2 When was it?

Speaker 5 It was at 575 and we just lowered it to 569.

Speaker 1 Okay. So I just saw this headline today.

Speaker 1 Today.

Speaker 1 We're seeing the Florida housing market begin to contract a little bit because it was exploding.

Speaker 1 And now we're seeing it contract. In fact, many people feel like it was overpriced,

Speaker 1 overheated. And so you're in Tampa, which is the Tampa area, which is certainly one of the better markets in Florida.

Speaker 1 So I think if you've got a really good real estate agent, and if you don't, I would highly recommend that you go to ramseysolutions.com/slash agent and talk to some of the trusted pros there on that site that we know.

Speaker 1 Because in this current market, I think patience is the game.

Speaker 1 And listen, six months for a house listed in tampa i don't think that's crazy at this point

Speaker 1 if your pricing is right yeah yeah i agree

Speaker 4 i agree tell me tell me is there anything on fire though because of course everybody wants their house to sell was the plan to take the proceeds from this sale and put it on your current house or did you buy your new house and

Speaker 4 tell me more about that no i put I put some down.

Speaker 5 So we owe $326,000 because the house was $430,000. Okay.
So we just want to, we just want to pay the house. We don't want to have that.
We don't want to pay the bank any interest.

Speaker 2 Sure, but you're not. We didn't have to.

Speaker 1 But what Jade's asking you is, are you in a financial squeeze because this thing has not sold yet?

Speaker 5 No, we're not.

Speaker 2 All right, then be patient.

Speaker 1 This is all about making sure your pricing is right and then just hold.

Speaker 4 Yeah, just hold. I definitely don't want you to

Speaker 4 put a price that's too low because you're anxious and you just want to move it. You know, you're not.

Speaker 2 I agree with that.

Speaker 4 You're not. Everything must go.
You're not in that mood in that mode. So just, you know, you got to know when to hold them.

Speaker 1 Sit tight. I'm going to do a little bit of fork.
I'm no real estate pro, but as you know, I pay way too much attention to the headlines.

Speaker 4 Okay, forecast for us, Ken.

Speaker 1 I'm paying attention to what the Fed is doing and what they're saying. We are in a presidential election.
I would not be surprised given where we are right now.

Speaker 1 We're seeing unemployment tick back up over 4.

Speaker 1 I think it's 4.1,

Speaker 1 the latest job report, last month job report. We're starting to see see a softening in the labor market.
All of this in a presidential election. This is exactly what the Fed set out to do.

Speaker 1 Jerome Powell is on record as saying we've got to raise interest rates and it is going to cause pain in the employment market and pain in the employment market. Okay.

Speaker 1 And then when we see interest rates high for the home industry, mortgage rates, this creates a cooling of consumer demand

Speaker 1 and consumer confidence, which then in turn theoretically theoretically, drops inflation. Well, the idea.
So all that to say.

Speaker 4 Make it lame, put it in more layman's terms, because the cooling is happening because everybody's holding on to their money. That's exactly right.
Okay.

Speaker 1 And so what's happening is people are also sitting and waiting to see what happens in the next quarter or the fourth quarter as it relates to mortgage rates.

Speaker 1 I think you're going to see a slight rate cut in the third or fourth quarter. And I think you'll start to see people move back into the housing market.
So I would sit tight.

Speaker 1 if I'm in a position where I'm listing, I'm going to list it and stay with it.

Speaker 1 But I think you're going to see an increase in home sales as we look to the end of the year.

Speaker 4 All right. I love that because that's been the issue.
Not enough homes on the market, not enough supply to meet the demand. You heard it first.
You heard it here from Ken Coleman.

Speaker 20 Let's see if he is correct.

Speaker 4 This is the Ramsey Show.

Speaker 1 It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just buy, buy, buy.

Speaker 1 So you start swiping the credit card and suddenly it's January and you got a mess on your hands. Don't let that happen.

Speaker 1 Tell your money where to go instead of wondering where it went with our budgeting app, Every Dollar.

Speaker 1 Every dollar not only helps you stay on budget and in control of your spending this holiday season, it also helps you find extra margin in your budget, thousands of dollars of it, and every day will coach you to build better money habits and attack your goals faster than ever.

Speaker 1 So, while most people will be starting in January with a taste of regret in their mouth, you'll already be winning. Start every dollar for free by downloading the app today.

Speaker 1 Welcome back to the Ramsey Show. I'm Ken Coleman.
Jade Warshaw is alongside. The phone number is 888-825-5225.
Our scripture today comes from Luke, Luke 9:23.

Speaker 1 Then he said to them all, whoever wants to be my disciple must deny themselves and take up their cross daily and follow me.

Speaker 1 Our quote is from Mitch Album. One half of knowing what you want is knowing what you must give up before you get get it.
Okay. Sounds like a recipe for getting out of debt.
Uh-huh.

Speaker 1 Taking control of your life in any area. All right, let's get to the phones.
Laura is in Columbia, South Carolina.

Speaker 2 Laura, how can we help?

Speaker 5 Hi.

Speaker 5 I was listening to y'all during the pandemic when y'all were talking about community college. I took y'all's advice, went to community college, got a merit scholarship to university.
I'm a senior.

Speaker 5 But the thing is, is I'm disabled. I've never worked a day in my life.

Speaker 5 Most jobs

Speaker 5 are not possible for me to do. And I've always known I'd have to work with my brain instead of my body.

Speaker 5 I'm scared to enter the workforce and as a consequence of putting my all into college, I accidentally won a fellowship that affords me the right to go to almost any state school and even Ivy League if I wanted to.

Speaker 2 Wow, wow.

Speaker 5 I don't know if I should give up disability.

Speaker 5 go to grad school or stay on disability or no excuse me give up disability um and enter the workforce um and don't take up the scholarship and don't go and don't pursue my education and continue it further or um

Speaker 2 i i don't know what okay let me jump

Speaker 1 disability i move up my income all right i'm so glad you called um do you mind telling us what is what is your disability and how and what kind of work can you do because you've obviously done an incredible job in school and you're very bright so what are your limitations

Speaker 5 I have a genetic bone and joint disorder. It also causes me to faint.
If you're familiar with Elric Danworth syndrome and postural or static dichardia, I have those.

Speaker 5 I can't stand or sit for long periods of time. I do most of my classes on the computer.

Speaker 5 So I would be looking for a job in local, regional, government, or nonprofit work.

Speaker 1 Okay, let me ask you this.

Speaker 1 Okay, let me ask you this. If you did not have those physical limitations,

Speaker 1 knowing what you know about yourself, what would be something that you would love to try professionally or something you know you'd enjoy doing?

Speaker 5 I would like to work for the state or federal government on education policy.

Speaker 1 So you really love education policy?

Speaker 2 Yes, sir. Okay.

Speaker 1 And

Speaker 1 if you were to get one of those jobs,

Speaker 1 can you do that remote or would you have to do like, because I'm thinking state and government jobs, those are those are not remote. Have you have you looked into that?

Speaker 2 I have.

Speaker 5 That's the pipe dream. The realistic dream is a remote job for a nonprofit somewhere.

Speaker 5 I failed to mention I have no debt, but if I took the scholarship, it would cover 75% to almost any state or Ivy school.

Speaker 1 All right, so let's dream here.

Speaker 1 What if you just picked an Ivy League school?

Speaker 1 Assuming, again, you can do everything online, yes?

Speaker 5 A few, yeah.

Speaker 1 Okay, that's what I thought. So, what would that higher ed degree be? What would you get? A master's, PhD?

Speaker 5 Master's of public policy.

Speaker 1 Okay.

Speaker 1 You know who you are.

Speaker 2 100%.

Speaker 1 And I love that. You love policy.
And you're talking to a policy wonk, okay? I mean, I'd make Jade's eyes roll back in her head if I start talking policy and James would turn my mic off.

Speaker 1 I know what you, I know you. I see you.
I hear you, Laura. So I'm going to tell you something.
It's 2024. I'd like to see you

Speaker 1 before you make either decision, because you kind of asked Jade and I, okay, should I do this, this, or this?

Speaker 1 I think you need to do some more research here. And I think the research is solely around if I were to take those scholarship, that scholarship offer, and I were to get that master's in public policy,

Speaker 1 with my physical limitations,

Speaker 1 is there a way? I would want to know that. I would want to know the multiple ways.
You understand what I'm saying when I say it that way?

Speaker 5 Yes.

Speaker 1 Okay, good. I'd want to know that first.
Now, I'm going to say something else.

Speaker 1 I also think that the timing is right,

Speaker 1 and I think you're going to have to work at this, because I think there's some small-minded people that would hear about your situation. and they would consider that a polite nuisance.

Speaker 1 But I think there's some big-minded, big-hearted people who would go, you know what?

Speaker 1 Let's figure out a way to do this. You know what I mean? Because I understand for you, the idea that you could faint at any moment,

Speaker 1 that's very, very humiliating for you, I'm guessing, correct?

Speaker 2 Right.

Speaker 1 Yeah.

Speaker 1 So you have to be 100% remote. Is that correct? Or is that just the preference?

Speaker 5 I'm trying to work every day on physical therapy.

Speaker 5 Right now, I could,

Speaker 5 I'm not even going to say I think I could hold down a part-time job because I don't think I could.

Speaker 1 Just physically.

Speaker 5 Right.

Speaker 5 If it was remote, maybe.

Speaker 2 But

Speaker 2 I'm trying my best. But can I tell you something? How did you?

Speaker 5 Undergrad degree I've got is worthless.

Speaker 1 Yeah, I know. But I think it proves something to you.
How many hours a day were you putting into the undergrad work?

Speaker 5 Sometimes 15, usually about 10.

Speaker 1 Sweetheart, if you could put 10 hours

Speaker 1 into a undergrad degree from home, you can put eight hours into a job from home.

Speaker 4 100%. There's nothing different.
It's you standing at a computer. It's you taking calls.
It's you flipping books. It's you highlighting things.
It's you reading. All of those things.

Speaker 2 I mean, am I wrong?

Speaker 1 No, that's why I brought in Jade. I wanted to see if my colleague is hearing what I'm hearing.

Speaker 4 I just hear a freaking workhorse.

Speaker 1 Who doesn't believe that she can actually do it, but you've actually already done it. I guess is what we're trying to say to you.

Speaker 5 I'm scared to enter the workforce because I'm afraid that I'm going to give up all my benefits and I'm going to be homeless.

Speaker 2 Okay.

Speaker 2 Okay, there we go. Okay.

Speaker 1 Now we're getting somewhere. But you can acknowledge to us that you can work eight hours a day remote.
Yes or no?

Speaker 5 With my brain, 100%.

Speaker 1 That's what we're saying. Yeah.

Speaker 4 You've been doing it.

Speaker 2 You've proven it.

Speaker 1 We're on Team Laura right here. We're trying to cheer you up.
So let's talk about the fear piece. Okay.
You have no debt. Do you have an emergency fund?

Speaker 5 No.

Speaker 5 I have about $40 in my bank account, and that's usually where it sits.

Speaker 1 Okay, what is your benefit? What's your disability payment coming into you every month?

Speaker 5 About $1,500. I work out the school food pantry.

Speaker 2 Okay.

Speaker 5 All right. So,

Speaker 1 Jade, let's do the calculator here. I'm going to have Jade help me out here.
So, if she's making somewhere between $18 to $22 an hour, let's just do $20 an hour just for round numbers

Speaker 1 because

Speaker 1 with your skill set,

Speaker 1 so you do the math, 20 times 40.

Speaker 1 And so you're going to be, here's my point, you're going to be making more than your disability payout. And we're going to teach you how to build an emergency fund.

Speaker 1 And we can walk alongside of you. I want to get you set up with one free session with one of our financial coaches to help you see what my path looks like as I begin to make real money.

Speaker 1 And you're not going to be homeless. See, that's one of the things about that disability payment.

Speaker 1 It will make you feel like, I can't ever get rid of it when what it's really doing is holding you back. That's right.
Jade, thoughts on that?

Speaker 2 It's the ultimate crutch.

Speaker 4 I think that

Speaker 4 taking out of the equation the things that you want to do and what you love to do, there's a lot of jobs out there that you can work on your time.

Speaker 4 You can be remote and you can make the... the money that Ken is talking about, $20 an hour, 40 hours a week, you know, four weeks out of the month and bring home $3,200 instead of $1,500.

Speaker 4 So I think that just opening up your mind and going, okay, like there's possibilities here. You coming up with work on your own, figuring out other things that you could do

Speaker 4 within the parameters of what you enjoy doing. I think there's a lot of options out there.
I think fear is blinding you from seeing all of those options, but you're more than capable, beyond capable.

Speaker 4 You've proven that. So that part is a, I wonder that's been established.

Speaker 1 I wonder, Laura and Jade, what's the timeline?

Speaker 1 Maybe she gets a job and she stacks some money. How soon would you have to say yes or no to these scholarships?

Speaker 5 I would say before February, I would graduate in May and I would have to move out of state by June.

Speaker 1 I'm going to challenge you. We did this once before.
You started off the call saying that you heard us tell you to go to community college. You did it.
You crushed it. Here's the next challenge.

Speaker 1 Go get one of these remote jobs that Jade is talking about. Could be customer service.
Yeah. Could be anything.

Speaker 1 Let's just stack some money and just prove to ourselves how much money we can make before February and then make your decision.

Speaker 2 Laura, we believe in you. You're closer.

Speaker 1 Good hour, Jade Warshaw. Always fun to be with you, my friend.
Thanks, James Childs and our fearless band of merry men behind the glass. This is the Ramsey Show.