Choose Peace Over Payments 02:05:38

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, your host this segment, and this is your show, America, so give me a call at 888-825-5225. We'll talk about your life and your money and whatever's on your mind, whatever ails you.

We got some fun news last night. My new book, Breaking Free from Broke, is officially a number one national bestseller. So thank you so much to everyone who pre-ordered, who purchased, who has read the book, who's listened to the audiobook.

It's because of you guys. We can write books in a cave, but it's way more fun when it impacts people out there. So shout out to the team to publish a number one bestseller. We do that a lot around here, and we can take it for granted if we don't just take a pause and celebrate. And that's all thanks to our amazing fans out there and people who have been sharing this, telling their friends about it, saying, you got to check out this book. It's going to help you win with money in 2024.

So I'm a turtle on a fence post here at Ramsey. We have an amazing team that makes this all happen, and I just did my part. So it's an honor, and I'm humbled and grateful this hour. And Joey's going to kick us off here in Greenville, South Carolina. Joey, how can I help today? Hey, I had a question about paying off my debt in cash, and I want you guys to try to convince me to pay it off in cash when I make more money

in interest with that cash being in a high yield savings account than I do on the interest rate on the loan. Ooh, so that you want a spirited debate here is what you're looking for. Kind of a prove me, prove me wrong. Yeah. Okay. Well, I'll see how far I can get. You sound like you've found a wealth hack. A little bit, I guess you could say. How much debt do you have?

So I have $14,000 left on, it was an initial $25,000 personal loan at 2.99% back in 2020. And the terms were five years with 18 months of deferred payments. Okay. And it's at 14K now, still at 299? Yes. And how much money do you have in savings?

I have about $34,000 in cash and $50,000 in stocks and mutual funds and then about $5,000 in a 401k. All right. So what are your goals? My goal is in about a year from now, 12 to 18 months to purchase the home. Okay. And so is that what the cash is for and the stocks? Would you cash the stocks out to use as a down payment? Yeah.

Probably not. I would just keep saving. I'm saving a lot of money every month now. On the cash side? On the cash side. So I would continue to do that until I had a big down payment to put down. And what's your income? I make about $120,000. Awesome. How old are you? 24. Dude, you're crushing it. What are you doing for work? I do engineering. Way to go. Great field. And that's the top...

In our millionaire study, that was the top career, was engineers. And it sounds like you're on the way. So you want to buy a home. You've got this personal loan debt. What was the personal loan debt for? It was just a career starter loan through USAA that I got from being in the Air Force a while ago. Cool. All right. So what's the payment on this personal loan right now? It's $468 a month. Oof.

Now, if you freed that up, let's say you paid off, you have the $34,000 in cash, you pay off the $14,000, that leaves you with $20,000 in cash, and you free up $468. Yes. So I've crunched the numbers a little bit, and if you don't mind, I'll go through them. Sure. And just stop me if I get too in-depth or if you have any questions. But...

Between now and there's 33 months left on the note. So between now and 33 months from now, the total interest that I would pay on the $14,000 is just over $600. And then the interest that I would earn on the $14,000 sitting in that account in my high yield savings account would be about $2,000 over 33 months. And then the third interest,

calculation I did was if I drained the $14,000 out of the high-yield savings account and then increased my saving amount per month by $468, then ironically, after 33 months, I would have $16,000 total in that account, which equates to be the initial $14,000 plus the $2,000 in interest. So you're saying either way, you get to the same result?

Exactly. So why not pay off the debt? You've burned more brain calories figuring this out. You make too much money to be spending this much time nerding out. Yeah, that is true. This is living in your head rent-free, regardless of the interest rate. You're too smart and successful to even be playing around with this at this point. Because if this really worked, right, Joey, you would just go take out as much debt as possible at $299 and put it in high-yield savings, wouldn't you? Absolutely. So why don't you go get some more debt?

I'm not sure if that's an option. I don't know if interest rates for personal loans can be got at 3% now. But the theory is if you could get a loan at 4.5% and you can make 5% in your savings account, you're going to go chase the spread.

Correct. And I'm playing a different game. That's checkers. I'm over here playing chess. When you don't have any debt, you don't have any payments, it changes the decisions you make. It changes how many brain calories are used to make these calculations. And so I remember, because I feel you, Joey, like I was 23, 24. I was doing the exact same thing. I was like a pretty, I was like, well, it doesn't make sense on paper to pay off the highest, you know, the highest, lowest balance first. I should pay off the highest interest debt.

And yet there I was, a broke chucklehead of a 23-year-old trying to argue about the best way to build wealth.

And so I'm not saying that's you. I was way more of a knucklehead. You are far more successful than I was at 24. Goodness gracious, you're impressive. And you're so impressive that I'm just going, why are we even... You have the money. It's not even a... It's literally with one click, this situation's over and you're back to $468 back in your life, putting in the high yield, investing it, building up your down payment. And so I don't know...

I don't know why you'd continue this if you just found out the results the same either way. I would just get rid of the payment. The only thing, and that is the obvious answer, but the only thing is that I really plan to buy the house in 12 to 18 months. So I would...

in 12 months have more of a need for the cash than I would just saving up more money for the next 33 months, which is the... So you wouldn't actually make that spread in the end? I would be right. I would only make that spread if I kept investing $468 a month for the next 33 months into that high-yield savings account. Well, here's the other thing to think about, Joey. That high-yield savings account rate...

This is the Ramsey Show.

Welcome back to The Ramsey Show. I'm George Camel. I'll be your host this segment. We're taking your calls at 888-825-5225. You call up and we'll talk about your money problems, your wins, and whatever else is going on in your life. Morgan is up next in Raleigh, North Carolina. Morgan, welcome to The Ramsey Show. Hey, thank you for having me. Sure. How can I help today?

So my question is, I have about $45,000 in credit card debt split between two different cards. And oddly enough, the amounts are even. So I kind of been having trouble with the plan to really pay it off. So I'm not really sure which method would be best to use, like either the Snowball or Avalanche. I'm not sure. And the interest rate's pretty high for me. It's at 26.29%. Okay.

Are these like a retail card? Yeah, really high. One of them is a Citibank card, like a cash back card, and then my other one's with Wells Fargo. Ouch. And are they both at $26,200? Yeah.

The Wells Fargo ones at about 20%. Okay. I mean, because the balances are, if the balances are exactly the same, you can just attack the one with the higher interest since there's really no difference here. You're going to make, you're going to feel the progress knocking them down either way. Are the payments the same? The minimum payment? No, the payments are not the same. They're a little bit different. What's the difference in payments?

The city card's around higher end of $900 a month, and then the Wells one's like $550. Okay. I wonder if you plug this into our debt snowball calculator, it may tell you which one would get knocked down faster if you were throwing extra money at it, and that might help you make this decision and get you out of this paralysis mode. Okay. Because the key here is you want to knock down that principal as fast as possible, and the interest is just making it harder to do that.

Yeah, exactly. Because I've been trying to double the payment each month. I've been actually, my goal is to try to put at least $2,000 to $3,000 towards it. But it's barely making a dent, I feel like. That's the problem with these high interest rates. The higher the rate, the slower it's going to go because that interest is just killing you. So what other debt do you have? Really no other debt. That's it. I own my car. I have no student loans.

I own my house. I have $288,000 on that that I still owe. Do you have any savings? That I put...

I have, so that's the problem. I've been trying to put all my money, thousands, into just paying off these cards. I have about $2,500 in the mini, like a mini emergency fund. Okay. But I don't have a huge savings because I'm just throwing everything at these debts. Good. Baby step one is a $1,000 starter emergency fund. If you have that set aside and then you have enough to cover your bills for the month, everything else needs to get thrown at that one credit card while making minimum payments on the other.

Right. Okay. What'd you spend the 45,000 on in these cards? So last year I had a bunch of some medical issues that unfortunately wasn't really covered by insurance. And then I have, I own an older home, so I had to replace the windows and doors in the home. They were like starting to leak water. I had some moisture damage. So I had a lot of house things that I ended up spending money on. Probably should have waited on them. They weren't like dire, but

But when you have the card, you're like, why not? Have you cut up these cards already? Have you cut up the cards? No, I haven't yet. I think it's time. I think it's time we cut up the cards, close the account, and then we start paying off these balances. You need a line in the sand where you go, no more. Morgan works too hard to be this broke, and these card companies have not been a blessing to me thus far, and they're only going to encourage me to make bad decisions with the guise of cashback.

Right. And I even tried to call them to ask if they could lower the APR and they said no. I just wanted to ask. You never know. I mean, we've heard stories where people just call and say, hey, I'm struggling to make this payment. Can you lower the interest rate? And they'll just do it. So you can fight them and keep doing that and see if that's going to help. But truly, your best bet is just working your tail off and knocking this thing out as much as you can. So what is your income?

I earn $113,000 a year. Good news. So I'm, yeah, so biweekly, I'm getting about $3,000 biweekly. And I also work a part-time job that I get about an extra $1,000 a month at. Great. So we're talking about 7K coming in take-home?

Yep. Yeah. Great. So the question now is, as you create your every dollar budget, the goal is how much margin can we create by cutting expenses, by making more, by deeply sacrificing, by selling stuff on Facebook marketplace, finding the change in the couch cushions. You have to go so scorched earth that people think you're crazy. Yeah. That's what's necessary here. You've been comfortable for a while, but this comfort has now turned into discomfort. It's catching up with you. Right.

And so, and I'm setting aside about 2,500 a month towards my mortgage and my bills. So I subtract that and then whatever I, yeah, exactly. And then whatever I have left over, I'm trying to just throw it at the debt. Are you investing at all right now?

No, I was. I did have stock, but I sold it. I actually have about $187,000 in a 401k Roth IRA. Good. Well, leave that alone, but make sure you've paused all investing, all contributions until this debt is paid off. And that's going to light another fire under you to get out of debt faster because you want to get back to investing. You're good at that. You're good at saving money. Right now, we've got to pay off some debt and clean up this mess.

Are you using a budgeting app right now? No, I'm not. Well, it starts today. I'm going to gift you one year of every dollar premium. And once you go in there, there's a paycheck planning tool with the premium version. There's a financial roadmap that will show you when you're going to hit these milestones. And of course, the budgeting app itself, which is going to help you lay out a game plan for every single dollar coming in.

I'm also going to send you a copy of my new bestselling book, Breaking Free from Broke. Specifically, read the credit cards chapter. I've been hearing so many people, they've been sending me videos, cutting up their cards, saying, you finally pushed me over the edge to cut up the cards. I needed a shower after I read that chapter. It gave me the ick, and I am done with that system. So Lauren, I hope those two resources help you. Skyler will pick up, and we'll make sure you get every dollar premium and a copy of Breaking Free from Broke.

Lauren is up next in New York. Lauren, what's going on?

Hey, thanks for taking my call. Sure. How can I help today? So basically I'm in a situation now where the last two years I started to make more money than what I've made ever previously. I'm 32. I'm renting right now. I gross about $120,000 a year and I net about $75,000 after like my nickel and 401k expenses. And I guess my situation right now is I have about $5,000 in credit card debt spread across three cards. Yeah.

The interest rates on them are like 29%. Um, and then I have 8,300 in student loans and I have an IRS debt. So I'm the past due the last couple of years. That's probably about 4,500 right now. And it's probably going to go up this year. So, um,

On top of all that, I'm also kind of on the horizon of looking to try to save for a house, but I just don't really know what I should do first. My method that I thought was to pay off these credit cards and then put the IRS debt on a credit card that I could get with a good deal. Oh, no. We're trying to fill the hole by digging the hole deeper. Yeah. Okay. Well, Lauren, you're doing a lot of good things. You're just doing them all at once, and you're not going to make progress that way.

And so you told me you're investing into your 401k. That's a good thing, but now's not the time because we have a pile of debt to clean up. You told me you want to buy a house. That's a good thing, but right now we still have to clean up this debt. And the IRS debt needs to go to the very tippity top of your list. You should be losing sleep over this to the point where you're like, I'm getting rid of this 4,500 this month. I'm going to work my tail off. You make 120K. Do you have anything in savings? Yeah.

No, honestly, I have about $3,000 in a high-yield savings account right now, and that's really it. What are you contributing? Last year was the first year I made this type of money. Okay, awesome. Well, this is going to really help you get out of debt fast, because the good news is you make $120K and you have, what, $16,000, $17,000 in debt? Yeah, about that rate. You're going to knock this out so fast. What percentage are you contributing to retirement right now?

Well, guess what? You're going to pause investing and it's going to free up $18,000 for you to attack this debt.

in one year. And you're going to be done probably in a few months if you do that. So I would highly recommend pause all investing, go scorched earth, take a thousand and start knocking away at the IRS debt, then hit the credit cards, smallest to largest balance after the IRS debt, and you will be on your way. You'll be debt free in no time, but you got to do one thing at a time focused intensity. This is The Ramsey Show.

I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills? How am I going to pay my bills?

I'm going to eat next week. Yeah, in the middle of all that grief. Like it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here.

You've got to say it out loud, and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of a stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282, or go to zander.com.

Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. We're taking your calls at 888-825-5225. Jade, we've got something exciting coming up that we've never done before. Tell the people, George. On The Ramsey Show YouTube channel, we are going live after the break.

after the Ramsey show just for YouTube and we're going to be hosting a live Q&A all about money and budgeting. We're going to have a special laptop that's visual. It's going to be pulling up every dollar. We're going to show you exactly how to get ahead with money, answering all of your questions and it's going to be Jade Warshaw and myself. Here's what's cool. You can either call into the show like tradition or you can ask your questions in the chat in real time. And we'll pull those.

Yeah. So anything could happen. It's the first time we've ever done this, but you have to join us. Don't miss it. January 30th. It's a Tuesday, 5 p.m. Central Time, 6 p.m. Eastern Time. Go to our YouTube channel and hit the notify me button on that bonus Q&A live so that you don't miss it. Love it. It's going to be fun. All right. Let's go to Landon in Greenville, South Carolina. What's going on, Landon? Hey, how you doing? Great. How are you? I'm all right. So my quick question is, how do you get out of a poverty mindset, man?

Hmm. Are you in poverty? No, but the mindset, you know, I was raised by a single mother, two kids, dad in prison my whole life, section eight. Um, you know, I'm 32 now, put myself through school, worked three jobs. I was in school, married now for nine years. Um, I actually just opened up my own business on the side. So I still work full time and run my business. Um,

You're impressive, dude. Man, I struggle, dude. So you're doing great now. The struggle's real. But you still have that, it's always gnawing at you, like this could all come crumbling down. What's the fear behind this? Well, I mean, I've always, what's the word, man? I've been taught how to survive and not thrive. So you're motivated out of fear or like scarcity. You're not motivated out of confidence.

Yeah, exactly. It's not coming from a place of confidence. Yeah, my wife is very concerned about it, you know, because we want to have a family and I want to better, you know, put confidence in our kids and,

uh put them on the right path and everything else but it's hard to do that parent that when you don't believe it in yourself so it's right you know i'm a harley davidson technician i've been a technician for 10 years now 11 years uh-huh um started at 11 bucks an hour um you know now i'm in the 60s a year working flat rate you know if i don't work i don't get paid right i'm

So give an example, like I hear what you're saying, but it also sounds like you're moving forward. Give me an example of how you feel it holding you back today and in this moment, because I do think that, um, when you grow up that way, or when you grow up with a set of, of beliefs and you're working very hard to shed out those beliefs, um,

it's not just a light that flips on and flips off right it's more like it's more like that old you know lawnmower that you have to keep pulling the cord and pulling the cord before it gets started right you always have to kind of like remind yourself like what do I believe like what's true and and then you get going so what's that look like every day for you how is it holding you back today I just seeing dead every day how much debt do you have you know

I have 13 in tuition, 3 in a credit card, 7 in a personal loan. We purchased a new car last year, you know, trying to raise a family. How much is that? We have 17 on it. Okay. What else? We bought it brand new. Our mortgage, we're at $200. Okay, not bad. Anything else?

No, I'm a tool bill, but there's no interest on it, but it's still a debt. How much? And I'm at $700 on it, paying it. And how much are you bringing home every single month? You and your wife combined, what are y'all bringing home? Mine varies, just because I'm a flat rate technician. So, I mean, I can work 80 and bill 120. Or, like this winter, you work 90 and get paid for 70. Okay. My lowest has been a month is right at $200.

to what and then my wife two grand okay and then that's the lowest uh what's the highest like what what what's the norm what if you're busting your butt what do you make yeah uh if i'm busting my butt you know my wife always busts her tail um i mean we can easily do probably six or seven a month okay six or seven thousand so i think that

you know, we can kind of have a therapy session and dig into your past and figure out what's going on. Or we can just look at the math and give you a little bit of peace through the math, which is if you guys are making $7,000 a month, are you guys on a budget? Because when I look at that number, I go, that's a lot of money there. There should be some margin to really make some headway on this debt. But if you're not on a good budget, that's not happening. So are you budgeting? Yeah.

Yeah, we're budgeting my wife's better at it than I am. She actually paid off all her student loans last year after getting her master's degree. Okay. Are you guys doing this money stuff together? Yeah, we are. You have one combined account? Because in our checking we do, and then we have a separate savings. And then with the business, I got a high interest yield on the business account, which

So, because I'm real, like, you know, when you get married, everybody says that you join everything together. That's right. In my eyes, though, it's like, you know, that was my dad. I know she married into it type of deal. We went through a lot. Like, we lost everything a couple years ago. We moved into an apartment. Place wasn't clean. Had bed bugs. Ruined everything we had. Literally, I started over on an air mattress. Listening. And I just...

When you get married, I get it. I hear what you're saying. When we got married, my husband brought $230,000 of student loans into the mix. Right. And I only had 34,000. So I, the, the idea of feeling guilt and shame and feeling like, listen, this should only just be on me. That's a very real feeling, but just because you feel it doesn't necessarily mean it's right. Right. And your wife married you. And my guess is if you guys have an open conversation, um,

You've got to take all of each other the good and the bad just like John Legend said right we've got that's just the reality of it as much as I dislike that song but

That's what you've got to let go because at the end of the day, you're not going to both of you won't be able to go as far as fast as you need to go. If you don't really link arms and say, this is what we're doing. We're putting all of our money to pay off our debt. And this is how we are going to approach that before you get off the phone. I want to make sure they get financial peace university. And I want to make sure that you guys walk through it together because you

I think right now it's all floating around up here, up in your head. And you've got to get a plan on paper that you're following. Because I don't know how much your wife's student loans were, but you guys paid those off first for whatever reason. And I want to make sure that there's some method to this madness and that we're walking through and we're going, okay, first, we're getting $1,000 saved. Next, we're listing our debt from smallest to largest by balance, right?

not interest rate, and we're gonna get some quick wins. So we start to build that confidence that you mentioned earlier that you feel like is lacking. When you start building that confidence, you're gonna realize, okay, I can do this. And that's what builds that mindset. You've gotta get those wins so that you can start to build that motivation so that you can start building that belief

And then you'll see, okay, like I can complete this. I can do it. And once you pay off that debt, listen, can't nobody tell you nothing. It's going to build some confidence in you that no one can take away. And that's coming from someone who knows. I guess, I know, you know, to add to it, I mean, um,

The guilt side of it is just like, I grew up on spam, baloney, and stuff like that. My wife's parents, they did really well for themselves. They were able to put two kids through college, pay for it. They did really well. They still are. I just don't want to put my wife back on a poverty table. She's never really experienced that at all. But that's not poverty. You choosing to pay off your debt is loving your family well. It's the exact opposite. Yeah.

This is the hand that you guys have dealt yourselves. You're in debt. It's not about what you did. It's about what you did next. And what you're going to do next is you and your wife are going to come together and go, okay, how do we get to that dream? It's by us paying off debt. It's by a saving up, getting the right insurances. That's how we're going to do this. And the baby steps are going to help.

We're going to give them Financial Peace University. And Landon, I'm also going to send you a copy of my book, Breaking Free from Broke, to help you get out of those chains, man. You're changing your family tree. It's hard, but it's worth it. And it means you're going to be busting your butt for the next year or two to clean this mess up. You got to stop letting life just happen to you and go, well, we had to. It's time to start happening to your life, man. That's right. That's going to give you some hope. Get connected with better help, too. You might need to talk to somebody. That'll help you. This is The Ramsey Show.

This show is sponsored by BetterHelp. Hey good folks, the back-to-school madness is upon us. It's hitting us right now. We got travel and work and all these forms to fill out now and sports to travel to and on and on. My family's schedule is so packed and we haven't even begun talking about things like exercise and date nights and counseling and church and home projects. And those are the things that make our life even worth living.

Here's what I've learned. When it comes to taking care of me, I have to put on my oxygen mask first. And that means that I have to do the things that keep me well and whole. And I know that you have to do those same things too. So don't skip the things that matter to you, including regular exercise, hanging out with your friends and regular therapy appointments. And when it comes to therapy, contact my friends at betterhelp.com.

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Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. We're taking your calls at 888-825-5225. Don't be scared, because y'all be sending me DMs every day with nine paragraphs. I'm like, y'all call The Ramsey Show. I cannot sit here in the DMs all day long. It's way easier talking to people, Jade. It is, but have you noticed that more and more people are going to social media? Yeah.

for their that's true for their information especially tiktok yes tiktok is big although i have to say like i don't spend a whole lot of time on tiktok instagram is my jam but well can we be real because of those on tiktok no everyone dogging in tiktok because they're on instagram reels you're seeing the same videos just three weeks later listen you're like a baptist church you'll get there but it's going to take you a little longer you know what does that

mean George? You know it just takes them a little longer to get with the times Jade. You know what I'm saying? Like they got a drum set but it was about three years too late. They got the contemporary service but all the young people have left already. You know what I mean? That's how I grew up Arabic Baptist so I can say that with pride. It's the one moment. Alright so here's Jade here's this article I want to get your take on. Okay. And it involves TikTok. Alright. Loud budgeting is going viral on TikTok and for good reason.

Yeah. Okay. Yeah. So define loud budgeting for those that don't know. Okay. So loud budgeting, this is me in my own words. It's basically people coming on Instagram and sharing openly. They'll either openly share their actual budget or they'll share all the tips that they're using to spend less. They're just being open for once people for once. I think social media has taken a turn for the good because we're being real.

And I think that this loud budgeting thing is great because it's really relatable. No one wants to see you standing in front of somebody else's personal jet, right? Like nobody else wants to see you. Oh my gosh, look at this new Louis bag I bought. And like, you're like influencing, right? People want to see you.

Here's the thing in 2024, I'm getting my money right. Guys, look at my budget. I'm spending $500 on groceries. I'm not doing any Uber Eats. I've decided I'm doing a no spend month. People want to see that because that's real. And that's really what loud budgeting is about. I've seen a lot of different types of

It's the social accountability, it seems. And it's flying in the face. It's the opposite of quiet luxury. That's how it started. I think this guy Lucas Battle started this TikTok trend of loud budgeting. But it's pushing against this influencer consumerism pressure. And it's people owning saying, I can't spend money on that. Right.

Normalizing real money talk. What's frustrating is that we're out here, we're talking about budgeting every day and people dog us for it. But then Gen Z makes a viral TikTok trend and now budgeting is cool again. Dave's like, get the envelope system. They're like, he's an out of touch boomer. And then it's like cash stuffing is in. The new viral trend among Gen Z. I'm like, they're just budgeting with a cash envelope. This is confusing. I know. This is one trend I'm not mad about, Jade. Unlike...

Stanley tumblers and crocs facts this is a trend I can get behind because this is really just sharing your money aspirations and as our friend Dr. John Deloney would say choosing reality yeah going I am broke and I'm going to be open and honest with that and drop the shame and the guilt and go I need accountability listen I say all the time the most powerful thing that you can do for yourself and for others is start utilizing the word no and start saying out loud

literally out loud in a confident voice i'm not gonna buy that because it's not on the budget like when i started doing that that's when stuff started changing and not only is it good for you because it's just it's an exercise in choice because you're saying i'm not gonna spend that not i can't afford it and i'm not gonna be able to get well a lot of times people use it and there's shame there's justification and i'm telling my friends it's

It's not on the budget. And they go, oh, what a cheapskate. Instead, do it with a smile and say, hey guys, it's not on the budget for me to go out. Would you guys be okay coming over and we do a movie night? Right. That's what this is. Or you put on the other side of it, you put what your goal is. Like you say, you know what guys, I'm not gonna... I'm trying to pay off debt. Yeah, I've decided I'm...

I'm not going to brunch this weekend because I'm really trying to get my savings up. Not only does that reinforce your goal, but like even psychology says you get that hit of dopamine when you share your goals. It's like, oh, and you feel it. And that makes you more motivated to then check in again with those same people because they're going to follow up

with you and be like, hey, I thought you said you weren't spending. I thought you said you were on a budget. And that's actually a good thing. You need to call your friends out. For too long, we're just letting our friends make stupid decisions. That's no friend. That's not a good friend. I'm totally with that, George. I like what this says in this article. Suggests you should speak up about your financial situation and make spending decisions that support your goals and match your current budget and needs. That's right.

That is a trend I can get behind. That's right. Ask yourself, are these spending decisions supporting my financial goals? That's an adult decision right there. I like that. I like that. Listen, I love that it has a new term. It's kind of like when TikTok came out with cash stuffing and they acted like they were the first ones to do that. To invent the envelope system. Right. Your boy Dave, he's been out here 30 years preaching it. Listen, I feel like we've been preaching this same loud budgeting thing here at Ramsey for the last...

I know for Dave, 30 years and for us, the length of time we've been here and you just really have to be, what I would say is I think that social media can be a great place to get advice, but you do need to be careful. So I feel like I'm kind of shifting the conversation a little bit, but I think you have to be careful because there is a lot on social media when it comes to money and advice and tips. That's like, Oh,

know about that. Like there's, there's gotta be method involved. So like with loud budgeting, I, I can support any channel, George, that kind of teaches those like five pillars, like get out of debt, budget, get the right insurance, make sure you're saving, you know, for emergencies and retirement and make sure you're prioritizing giving, right? That's kind of like the five pillars that you want to be looking for when you're on social media. However, comma, and

There is a right order to do those things. And I feel like that's where Ramsey shines is that we're teaching you the right order to do all of these things in the right way in which to go about those five pillars. And that's the baby steps. And you really don't get any better than that. It works every time. Instead of telling people, well, you need to be investing, but also you need to be paying off your debt, but also you need to... It's like...

People can't make progress like that. You can't do all that, yeah. And even worse, a lot of these financial creators out there are sponsored by the credit card companies, which is why they're telling you here's how to maximize and here's the best card to get and use my affiliate link. And I'm like, are you guys really falling for this? You think they have their best interests at heart when you're pitching these different credit cards? So it's exhausting. So be careful.

Follow the Ramsey crew. There's a lot of good eggs out there in the financial creator world, but there's a lot of bad ones too. But a lot of budgeting is good. Tread with caution. But yeah, I'm a fan of this. I'm just sad we didn't get there first, Jade. How do we create the next viral financial trend on social media? I think we were there first. Listen, I saw- Are we too old? No, I saw Rachel Cruz sharing real people's budgets. I know I've been on there sharing real budgets and sharing our own numbers. Like, listen, we're not late to the party. We started the party. That makes me feel better.

And we're here to stay. That's right. All right, Zachary, you're up next in Tampa, Florida. What's going on?

Hey, guys. Just to piggyback on what you just said, I've been debt-free before I found Dave Ramsey, and when I found your show, it was finally someone who gets it, a group who gets it. They really get it. I love it. I just wish I had found you sooner. A lot of shortcuts. Well, how old are you? I'm 36. Oh, you're plenty young, man. People usually say that at like 65, so you've got plenty of time. What's going on?

Well, my girlfriend and I are in love. We're getting engaged soon, and we're planning to get married. Thank you. And we have some really exciting plans to both sell our homes. Well, she wants to keep her home, and that's why I'm calling. She wants to rent it out, her home. And mine is paid off, and hers still has a mortgage. How much is the mortgage on hers? My question...

Her mortgage, she owes almost $200 on it. Okay. And she bought it about three years ago in 21. Okay. And you don't have a mortgage and she's saying, hey, why don't we rent this out? I'll come live at your place. Well, she wants to sell my house and get a home in between Orlando and Tampa because she's an attorney that services both of those and it's just easier for her to do that. And she wants to take out a mortgage to get it? Or you're going to just pay cash again?

I can't fathom being in debt again. After not being in debt for so long, I just can't fathom doing it. I'm guessing your girlfriend is really good at arguing.

This was her first house, and so she worked really hard, and it's her baby, and her mindset is... Oh, poo-poo. Everybody, listen. It's a wooden box, man. She worked hard for it. She's about to rent it out to strangers. She doesn't care that much about it. Strangers are about to demolish that thing over time, and so if you're going to do this move, you've got to pay cash for the next one. We are not carrying two mortgages around.

So that's the line of the sand you get to draw. And honestly, if you're moving far enough away from that other rental, you need to consider selling that because you don't want to do that long distance landlord deal. Listen, keep your blankie for emotional support, not a house. That's a different decision. I wish you guys the best in your journey. Marrying a lawyer, like I wouldn't even dare argue with my wife at that point. There's no debate there. Oh my goodness. That puts this hour of the Ramsey Show in the books. She's Jade Warshaw. I'm George Camel. We'll be back before you know it.

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Camel, joined by my esteemed colleague, Jade Warshaw. And we're taking your calls, America, at 888-825-5225. And I say America, but we've been getting more international calls, and it's really fun. That's right.

That's right. International impact, Jade. International impact. And speaking of the nations, I have to mention that you're national number one national bestseller. That is so kind. I have to mention it, George, because the other day it wasn't number one. And then you were like, Jade, it is now number one. Publishers Weekly hadn't put their list out yet. And we were number one in hardcover nonfiction and number five overall out of all books. So that was come on humbling. And I told him in the first segment of the show that I feel like a turtle on the

on a fence post. You know, the turtle didn't get there by itself. Yeah. We have an amazing team here. Dave has built this platform. So I'm just a turtle. You know, I always saw myself as a tortoise. I kind of look like one. Your analogies are...

Second to none. Thank you. I try really hard. But thank you, Jade. It's been fun. And you just launched a book that was also bestseller with money is not a math problem. And it's big, making big impact. It is making big impact. People are changing their beliefs around budgeting and money. And that's the biggest part. It's the hardest part. Listen, I feel like a wiener in a steakhouse, you know? There it is. That's my other favorite. I know. I was just setting. I thank you for the setup, George. It's an alley-oop right there. All right.

All right, let's go to the phone lines. Mitchell joins us in Anaheim, California. Mitchell, what's going on?

Thanks for taking my call. Sure. Um, so my problem is, or question is I'm trying to buy my first house. I'm 35 years old, married, uh, Southern California is an expensive place. So it's hard to get started. Um, my in-laws are offering to provide a down payment of 200,000 toward $900,000 house. However, the down payment is not, it's not a gift. Um,

it is a investment for them. Um, and so it would be an investment property for them where, you know, down the line we sell it, they get 50% of the profit. We get the other 50%, but we also get to put money into the home instead of paying rent. Red flag, red flag, red flags all over the play. I can tell you don't feel good about this by the way you're talking about it. Yeah. I mean, it's, if it, everything worked out financially, it would help us get started. Obviously. Um,

Because right now we're paying $3,000 a month in rent. Sure. It's one of those scenarios where everything has to play out just perfectly in order for it to work and there not be anger or bitterness or he said he was going to do this or ooh-wee. Yeah. I mean, I'm worried about what happens when something breaks on the house, who's paying for it, what happens when there's taxes due.

What happens when the house appreciates the $2 million and now they get a million dollars? Yeah. And they're stealing your wealth. I don't like any of this, man. Me either.

I don't do strings attached opportunities. Yeah. And so I would say that is so kind of you guys. Thank you. Right now, we're just trying to buy our own house, our primary residence. We'll maybe get there down the line to purchase an investment property. But when we do, we're going to pay cash for it. That's a big goal for us. And if you guys want to purchase this investment property, you go for it. We will support your decision, but they don't pay your bills. And I would not get them intertwined as you build wealth. Yeah, definitely not. Definitely.

Definitely not. Listen, so how long is it going to take for you guys to save up a down payment? Let's start thinking about what it means for you. Yeah, four or five years, hopefully, in that range. And you have no debt with an emergency fund right now? Where are you guys at financially? I have, I mean, stocks, $150,000. Cash, more like $30,000. Okay. Okay.

And no debt? My car debt, $20,000. Okay, we're going to pay that off today. How would that sound? Yeah. And I'm also interested in moving this money out of these stocks. Is it just non-retirement and single stocks? Exactly, yeah. What if you just put it in like an index fund for the next five years? That's...

Yeah, that's generally what it is in right now. It's in a couple of different index funds. Well, is it index funds or is it single stocks? Because George asked that question. Index funds. Okay. So it's spread around a fund of lots of stocks in one spot, right? Exactly. Okay. Just checking. All right. Well, I like that plan. I like what George said. I'm taking $20,000 of your $30K in cash, paying off the car. Now you've got $10K. You can start building that up to three to six months. And then anything on top of that, you know, keep chunking it away. Yeah.

Okay. And you'll have 200K of your own in no time. I still think you might need more than that. What's your household income? $250,000. Okay. And you're going to be buying in the Anaheim area? Yes. Okay. So I'd start setting a goal and saying, hey, we're going to buy something reasonable for our first home. The first home should always be the worst home you live in. No such thing as the dream home when it's your first. So don't try to aim too high. Get something reasonable. That mortgage payment should be a quarter of your take-home pay, and that's going to help you do this in a smart way. Okay.

What does $900,000 get you in Anaheim? Because are you still shooting for the $900,000 mark or not anymore because the parents aren't involved? With the parents involved, that's what we're shooting for. Without the parents, we'd probably knock $200,000 off. Like $700,000? It's a townhome. Exactly. It's like a two, three bedroom townhome. That's all you need.

My first two homes were townhomes, and we have no regrets. And I think too many people poo-poo the non-single-family home because they wanted the big yard, and we wanted this, and we wanted these countertops and five bedrooms. And I'm like, it's just you guys and a dog. What do you need five bedrooms for? It's a ladder. Climb the ladder one rung at a time. And townhomes still appreciate in value. Mm-hmm.

It's a beautiful thing. And there's less maintenance. Insurance is cheaper. So there's a lot of benefits to condos and townhomes there. And so I would start there and set that goal, get aggressive about it, get that emergency fund. But something tells me you're not going to go pay off this car today, Mitchell. Probably not. I mean, we've been doing a couple thousand dollars a month here and there just to have a reserve fund. What would it take for you to pay off the car today? Um...

I mean, I'd like to have a rainy day fund of cash. Well, let's put it in perspective. Let's put it in perspective. What's your car payment? And what are you putting towards it every month? It's $550 a month. So it's $550 and you said you're putting a little extra on it every month. If you paid it off, how much extra do you put towards it every month? It's kind of just whatever extra we have. Give me a ballpark. $1,000 or $2,000. $1,000 or $2,000. So let's say $1,500. $1,500.

Okay, so if you paid it off today, you have now freed up $2,050 that you can put away every single month into your rainy day fund. Think how quickly you'll save money like that. Nine months, you're done. Yeah, okay. Just a little food for thought. Yeah, I'll talk to my wife and see if we can do that then. I love it. Whose car is it? Hers. Uh-huh.

The plot thickens. Well, I hope she goes with it. And make sure you present it in the right way. Not like, hey, I called the Ramsey show and these dopes are telling me to pay off your car. I don't think it's a good idea, but what do you think?

Yeah. Yeah, that's a good point. You guys make $250,000. What do you need a car payment for? Yeah, but it's true. Like whatever advice we give people, they've got to ingest it and decide that this is what I believe too. Because if you're pitching it to your spouse and you're like, listen, these bozos told me to do, then you're never going to sell it, right? It's got to be your idea, not our idea. Car loans are the number one wealth killer in my book. It's now surpassed student loans, Jade.

It's a nightmare. Get out of it, Mitchell. You're too successful. You're too smart. This is The Ramsey Show.

So here's a quick math refresher. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money. So to reduce headaches as they scale, smart businesses use NetSuite by Oracle, the number one cloud financial system. NetSuite helps you improve efficiency by bringing all your major business processes into one platform.

platform. So join the more than 37,000 smart businesses like Ramsey Solutions that have done the math and graduated to NetSuite. And right now you can download NetSuite's KPI checklist absolutely free at netsuite.com slash Ramsey. That's netsuite.com slash Ramsey. Welcome back to the Ramsey Show. I'm George Campbell joined by Jade Warshaw. It's a free call at 888-825-5225.

Well, if you missed it, we made a big announcement. We've got a brand new event happening on May 10th and 11th right here in Nashville, Tennessee at the headquarters. It's called Total Money Makeover Weekend.

This is exciting. And we love a good live event. This is a brand new event. In one weekend, you'll get a crash course on everything we teach about money. We've got brand new talks from all of the Ramsey personalities, including Jade, including Dave Ramsey, Ken Coleman, John Deloney, Rachel Cruz, myself. We're going to be talking about budgeting and beating debt, investing, and so much more. So no matter what baby step you're on, no matter how long you've been listening to us, this is going to light a fire under your butt to keep making progress on all of your goals.

So if you want to join us, be sure to get your tickets because right now we have some early bird tickets and this is about as cheap as it's going to get. Limited time only. Get your tickets now for 99 bucks, ramsaysolutions.com slash events and start making plans. Book the flight, get the hotels, budget for it. You got time, but it's running out for these early bird pricing. So May 10th and 11th, join us. There's going to be live Q&A throughout the weekend. Smart Money Happy Hour is going to be live in front of a studio audience. Yes.

That's you guys. George, I have a groundbreaking idea for my presentation. No, I'm not going to tell you what it is, but I'm just letting the folks know it's going to be different. We're going to break some ground, apparently. I don't doubt Jade. I never do because I'd be on the wrong side of that. So join us. Total Money Makeover weekend, May 10th and 11th. Get your tickets. RamseySolutions.com slash events. Tell your friend. Text your mom. Bring the whole crew. All right. Michelle is up next in Charlotte, North Carolina. Michelle, how can we help today?

Hi, it's such a blessing to talk to both of you today. Thank you for taking my call. I have a HELOC. The balance on the HELOC is $32,000. I have $28,000 in my savings account. And my question is, should I take all of my savings except the $1,000 and put that towards the balance of the HELOC?

or should I hold back some of my savings? And my concern about that is I'm single, I'm 55 years old. I just had to replace my heating and air conditioning system, and I've had some home repairs over the last few years. And my concern is that my savings would be depleted if something else were to happen before I saved up my full emergency fund. Is this your only debt?

Yes. It's your only debt. And so technically, the way we look at it is like this. If the HELOC is more than 50% of your home, then it would go with baby step six when you pay your home off. But if yours is less, which it sounds like it is at $32,000, am I right?

Yes. Then it would roll into baby step two. And so for that reason, and for those listening, baby step two is paying off all your debt except your mortgage. And so for that reason, I would do that. I would drop this down. I'd knock out this HELOC. And then that frees up again, that extra money for you to build up that savings even faster. How much do you make? About $90,000 a year. Good. Awesome. So if you used the majority of the savings, it would knock down the HELOC to $5,000. Right.

Yes. And then you could knock that five grand out within a few months, it sounds like. Correct. I like that plan. I don't know how long you plan on needing to work until, but I want you to retire with some dignity and getting rid of your debt is going to be your best option. Do you still have a mortgage?

I do. My mortgage is about $140,000. Okay. So if I'm Michelle, I'm going, hey, by 60, I want to be completely debt-free. What's the plan to do that? Right now, it's getting rid of this HELOC the next few months. Then it's restocking the emergency fund to six months.

then it's going to be, I'm tackling this mortgage. I'm going to tackle, you know, 30 grand a year for the next five years and knocking this thing out by the time my 60th birthday, we're going to celebrate because I'm 60 and I'm totally debt-free. Are you currently investing at all? In my 401k at work. Um, and I, I'm at 7%. So as soon, well, I just, um, I just paused my, um, uh,

What's the word? Contribution? I just paused my contributions. Yeah. Good. That frees up $525 a month. I'm sorry? That's going to free up over $500 a month to throw at the HELOC.

Right. So that's why I pause it starting February 1st, so I could put that towards it and then build up my emergency. That was my other question. My emergency fund, since I'm single, should that be three months? Should it be four months? Should it be six months? I like six months. Listen, after COVID, I am always in the camp of six months. Yes.

No one ever regretted having the six month. And so especially with you being single, single income, there's just more risk. When you have two people with a stable income, there's less risk. So you could lean towards three. But in your situation and stage of life and you got all the home repairs, I'm going to go six months. And that might take you, on average, it takes six to 12 months. I think you'll do it faster. You'll do it closer to that six month range. I do too. If you can start throwing, you know, you free up the HELOC payment.

and this extra 500 bucks from investing, you're going to be able to get this thing stocked up in no time, Michelle. I also think when you, I think you're at an advantage when you're single, kids are out of the house, there's nobody else to get in the way of what you're trying to do is what I'm trying to say. So I think that you can go as quickly as you want to go and get as intense as you want to get. And that's kind of exciting. I love it. Thank you for the call. Up next, we have Timothy in Washington, D.C. Timothy, welcome to The Ramsey Show.

Hi, George. How are you? We are doing great, my friend. What's going on? Well, first of all, I'm just going to tell you that I'm the blind guy that called into your show on the Smart Money Happy Hour, I think it was, or the special show you did when your book was released. Oh, yes, the live stream Q&A we did. That's right. You were saying how great it is to have a wonderful audio book to listen to because you're unable to read the hardcover.

It is. It's wonderful. And the sound effects just added so much fun to it. I was laughing all the way through it, listening to it. That means the world. Here's my question.

Thank you so much. So here's my question. So I'm a single man, 30 years old. I'm on the brink of having a fully funded emergency fund saved. I was aiming for $12,000, but after listening to your book, I thought, better raise that to $15,000 just to be safe because rent and utilities, worst case scenario, top a little over $2,000 a month. Hmm.

Rent alone, $1,700, $1,725. And considering the apartment I'm in and the rent I'm getting, I'm actually doing pretty well. Apartments around here are running $2,000 or more a month. Anyway, I'm trying to save up for a down payment on a house. And based on my current income, gross salary, about $80K a year, net take home after insurance and taxes, not including retirement, probably about $1,000.

55k a year that after my housing and utilities and groceries I'll probably be lucky to save maybe 20 a year which means about seven to eight years if I want to go for a 20% down payment and even townhomes

In this area or Alexandria, Virginia, I've checked online, generally start at half a million dollars. So 100 is the minimum I'm aiming for. And I was just wondering, is there a more efficient way that I could get there, or is this about the best we can do? Hmm.

Great question, Timothy. Well, you've been doing great so far and you're at that home stretch with the emergency fund, which puts you in that baby step three B. So you're thinking through this the right way. Okay. The most you can save right now is 20 K. If you've done that budget and you're going, Hey, there's no other expense to cut. Then the other side you need to go to is how do I make more?

How do we get that 80K in DC up to 100K in DC, even if right now that's through a side hustle or consulting or freelance, anything you can do, because that's all just going to be gravy to get you to 30K saved. That's a different equation now. 30K, five years, putting 150 down on a $500,000 condo or townhome. Now we're cooking with gas.

Absolutely. And I have been doing some, I'm a music teacher on the side outside of my federal government job. So I do do a little music teaching on the weekends. Problem is I've had a hard time finding students. Now, one thing I did do is on my Facebook page, I recently posted,

posted on there that I am a private teacher to my friends only because believe it or not I've gotten some phishing scams from people. Oh you gotta be careful. Listen. Jump in some Facebook groups locally. That's a great place to start but in the meantime hop on Instacart man make you a thousand extra dollars a month. That's twelve thousand dollars a year. Add that with the twenty thousand you're already saving.

I mean, that's how you make headway. Do something until you can do the thing that you want to do. Yeah, and check out that Margin is Breathing Room chapter in the audiobook, Timothy. That's going to help you. I got lots of ideas for those side gigs for you there. This is The Ramsey Show.

So here's a quick math refresher. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money. So to reduce headaches as they scale, smart businesses use NetSuite by Oracle.

the number one cloud financial system. NetSuite helps you improve efficiency by bringing all your major business processes into one platform. So join the more than 37,000 smart businesses like Ramsey Solutions that have done the math and graduated to NetSuite. And right now, you can download NetSuite's KPI checklist absolutely free at netsuite.com slash Ramsey. That's netsuite.com slash Ramsey.

Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. Open phones at 888-825-5225. Listen, George, before we go further, I... Listen, I clowned myself on that last call. I clowned our guy, Timothy, because...

he's blind and I suggested Instacart that was oh boy I I dropped the ball Timothy my guy I made a mistake I'm sorry we need to come up with some side hustles that will work for you because the truth is Instacart didn't work for everybody so let's George let's hit him with a list of things that he can do and Timothy accept my apology I'm sorry my guy it was an innocent mistake Jade I'm

- We've all been there and this show is live and on the internet forever. So I apologize for that. That's just the nature of the beast around here. - Listen, y'all can come for me in the comments.

I deserve it. They've come at you for less stuff, so just be ready. So I'm going to just go through a list of things, not just for Timothy, but some ideas that anyone can do. And obviously, if you've got any kind of disability, it's going to add a challenging layer. Yeah, that's a fact. But what I hear in Timothy's voice is he's willing to do whatever and he's an overcomer and...

He's not scared of work. Oh, 100%. Those are the biggest factors to me. And so I don't know if there's any groups, Facebook groups even, for those that have disabilities. I would think so. For those that are blind, where he can jump in there and hear from others and hear how they're...

how they've dealt with side hustles and bringing in more income. Because he's doing music teaching. That's true. That's a great one. If you can do that from your home, think about other things you can do from your home. There's a lot of at-home jobs out there. One thing that anyone can do is just sell stuff.

It is amazing how much crap we have sitting around and how much people are willing to pay for your crap. Because guess what? At one time, you were willing to pay for that crap. Let's be honest. It's a loop. That's right. So sell it on Facebook Marketplace. And guess what? If you want it later on, you can buy it again from Facebook Marketplace for about the same price. For $4.

So flipping stuff is also something I've seen a lot of people do successfully. Yes. Some turn into a full-time business. Yeah. They'll go and buy something for five bucks that they'll research and go, I can sell that for 50. 100%. And make big profit. So that's another thing people can do.

Of course, Jade, you mentioned Instacart. There's a lot of delivery type apps, Amazon Flex for packages, DoorDash and Uber Eats for food. And so if you have a vehicle and you're able to drive, you got a driver's license, you're old enough, then that can be a great option to go make money. Tax withholdings, Jade, is a weird life hack to get more money back in your life. That's right. Oh, anybody can do that. If you're getting a $2,400 refund...

you can change your withholdings and get that $200 a month back in your life. And now's the time of year to do that. It's the beginning of the year. Get the full effect. Don't think that was a gift from the government. Pausing investing is another way people can free up money in their budget. We're hearing all these calls and we go, hey, how much are you investing? They go, 7%. Doesn't feel like much. And I go...

that's $600 a month that could be used towards your debt and your goals and down payment. Babysitting, house sitting, pet sitting, dog walking, all of these, you can easily make 15 to 30 bucks an hour. And Jade, now that I have a daughter and we hire babysitters, I'm like, should I become a babysitter?

I'll stay home and watch this baby for 30 bucks an hour. With these rates? Okay, I know that's right, George. It's crazy. House cleaning is another one that anyone can jump into. If you're not scared of other people's dirt, I mean, you go in there and start scrubbing and mopping and wiping down and dusting. It's amazing how much money you could make for one house. Listen, I...

I don't know what I would do without the person that cleans our homes. So thank you so much, Chelsea. Whether it's full-time business or side hustle, it's a great way to do that. Indoor, outdoor home maintenance and repair. I mean, if you are remotely handy, I'm talking about my handyman said, I go to this wealthy neighborhood and people hire me to go change out a light bulb. Yeah.

And they either don't have the ladder, the know-how, the confidence, the time, they're older. Whatever it is, you'd be amazed if you just put yourself out there. Car detailing is another one anyone can get into. It's these everyday tasks. These everyday tasks that people don't, they don't want to do. Like I was out the other day. This was in the fall. So there was a lot of leaves out. And the kid was...

scooping up leaves and putting them you know in the in the paper bags and I was like hey can you come over here and do that in our yard just because out of the out of convenience so there's so many jobs that you can do that is convenient like if you can think of something that would make someone else's life more convenient chances are you can make money that's what it's all about

And so those are just some ideas to make more. There's tons of ways to spend less. We won't get into that today, but you gotta be doing a budget first and foremost to actually make a plan for this. Otherwise it can disappear real quickly. But some jobs that anyone can do from home, especially those with maybe disabilities, there's a lot of cool like translator jobs. There's, depending on your skill that you already have with your career, Timothy's working for the government. So I wish we'd get him back on the phone and go, what is he doing currently? What is that skillset? How can he offer that outside of their...

And private music teaching is a great way. - It seems like a good way. - Most people don't charge enough. I mean, you're coming from the music world.

You at least, at the very least, need to be charging a full dollar an hour. If you're not, you're, I mean, that to me, that's the starting, yeah. And then you need to very quickly be charging $100 and then $150 an hour. Well, and depending on the kid and the skill level and your skill level, you can really, I mean, if people are taking this seriously, parents are willing to pay. The last voice lesson I took was $200 an hour. I took the lesson. Wow. And look at you now. One of the best voices I've heard. There it is.

So there's a lot of things you can do. A lot of gig websites out there like Fiverr and Upwork and Freelancer, editing, proofreading, writing. There's a lot of things. Now, I wouldn't mess with some of these dinkier ones. Like people are like, should I take these online surveys for tents? I'm like, some of that's just not worth your time. Listen, I know a lot of people who are doing virtual assistant jobs. Yes. And that is like they're making major bank. Customer service jobs too. Just answering phones, helping walk people through stuff. There's a lot of jobs out there. That's right.

So just some ideas. Again, I would, depending on what you're able to do and your skill set, you just got to get creative. Get the old juices flowing. Sometimes people turn it into their full-time gig. Yeah, I think that's how a lot of people's self-employed business starts is they start with something small that they like, that they're good at, that's a convenience for other people. And because they're good at it, it just starts to grow and there's a need for it. And I, you know,

That's how it starts a lot of times. Well, especially from the music world, we're both musicians. And so I'm thinking about Timothy, there's room in the licensing world. I mean, if you just license your music for TV, films, weddings, that's what I used to do, Jade, as a side hustle. Yeah. And my biggest hit was,

was Ford used two of my songs on their YouTube channel. And I got an email. They're like, hey, they don't have much budget. Are you okay with $3,500 for them to use these songs? And I was like, I think that will do. Yeah, that's fine. Yeah. Or a lot of times, instead of paying for the licensing rights to use an actual song, they just want you to make kind of like a Bobo cover of it. Yeah. Like I remember my husband, remember that Sly and the Family Stone, Everyday People? Oh, yeah. Ah.

I am everyday people. They went to my husband, Toyota, and said, hey, will you make a Bobo version of this? Make us like the great value version. Yeah, so we don't have to pay Sly and the Family Stone to use their song. Wow. Listen, he's got a plaque in his office for it. Isn't that crazy? That's impressive. That's crazy. With the plaque. I like that a lot, Jade. Yeah, there's a lot of things people can do, and you just got to be willing to do it. Because most people, they want to just sit on their couch and just make 50 bucks an hour.

Listen, everyone wants to sit on their couch. What are you willing to do that other people aren't? That's right. Get up and go, you know, kill something, drag it home. And so that's where I look at skill set. I had a bajillion side hustles when you and Sam were paying off debt. Listen, I had about a dozen. Yeah.

You got to get creative, figure out what you like to do. I sold cupcakes and cakes and wedding cakes and things like that. And me and my husband love animals. So we trained dogs. Like we learned how to train dogs and then we went out and got clients and trained dogs. So like whatever it is that you like to do. But I have to say this because it's worth saying no side hustle.

takes the place of a core income that's not measuring up. It must be on top of... Yes. Because if your core income, like for instance, you know, I talk a lot about the side hustles that Sam and I did, but the real issue was our income. Like...

when your income is just so low, yeah, you've got to work on that as well and find a long-term plan to get that up. Because the fact is you're not going to want a side hustle for life and you're not going to want that to be the way your life looks long-term. So there's two sides of that coin. My funniest side hustle was, have you heard of Nielsen? You know, they do like the ratings for TV and media. They had a

one called the Nielsen People Meter. So I signed up for this. They give you a little beeper that's listening to the media you're listening to and that affects the ratings of radio and shows and music. And so I did that, Jade. I turned on my little beeper and I put it in my pocket and I get a check for like 20 bucks a month. That's like wrapping your car.

It's easy. Get your car wrapped and you have to drive around with, you know, poncy attorneys at law. But listen, it's easy. For 500 bucks a month for a season, you can do anything. Yeah, it's easy. The problem is, Jade, I couldn't fit that little beeper in my skinny jeans. Had to upgrade my pants. But hey, what are you willing to do for a short season...

so that you never have to do it again. What are you doing to live like no one else now so later you can live and give like no one else with pure freedom and you can look back at those side hustles with a little bit of laughter and have a good story. That's right. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm George Camel joined by Jade Warshaw. This is your show. So give us a call, 888-825-5225. And if you are enjoying this show, I hope you are, would you be a doll and just hit the share button, hit the follow button, leave us a kind review wherever you're listening. You guys are the greatest marketing plan we could ever have. And the show is free and what I'm asking you to do is free. Just take some moment of your time.

Just text it to a friend. Hit the subscribe button. Let the algorithm know this is the kind of content America needs right now. That's right. That's all I'm asking for. All right, Michael is up next in Sioux Falls. Michael, welcome to The Ramsey Show. How are you doing? Good. Hey, George and Jay, thanks for taking my call. Sure.

So I have two sons, one 16, the other 17. They're both in high school working part-time jobs. They are using every dollar to budget every month, and they're doing a really good job for saving for vehicles. My 17-year-old has paid cash for two separate vehicles. Wow. Yeah, so he's working really hard. The problem is the savings accounts they have are earning 0.01% interest.

They're interested in earning more and they're even talking about investing.

But I don't know. They're both talking about going in the military, and I don't know if investing is the right option now, if they should be looking at a money market or a high-yield savings account, or what they can do to better maximize those savings that they have so that they have a little bit more available to be able to apply it towards school or a vehicle or any other expenses. Great question, and I applaud you as a father for raising some bright young men. We need more of that in today's world.

Yeah, thank you. So let's separate this out. So there's savings and there's investing. So let's talk about savings first. Savings is for your emergency fund and for short-term goals. So they need to be thinking out a year from now, two years from now, three years from now, what are the expenses we're going to have that we'll need to cover? Maybe that's first month, last month's deposit on rent. Maybe that's upgrading car. Maybe it's a maintenance fund for the car with a sinking fund.

And outside of the emergency fund and those kinds of savings goals, long-term is when we talk about investing. That's more of like the five-plus-year horizon. And I think both are good things to start coaching them on and get that muscle kind of – get those muscles built.

And so you're right on those savings accounts, you can do way better than 0.01%. And right now we're at record highs in savings accounts with, you know, four or five plus percent in a high yield savings account. So I would move their savings there and help them open one of those. I don't really great ones. I don't know. Can they open one for themselves, Jade? I'm trying to think if it's custodial still until 18. 17, I think is still custodial. So like a minor. Yeah. Okay. I think your name would still have to be on it.

Okay. So I would definitely move their savings to high-yield savings account. You can have them do a starter emergency fund. I mean, these guys are about to be adults real quick. And so having a few thousand bucks saved is great. Beyond that, since you said they're working part-time, they have earned income? Yep. I would also help them start funding a Roth IRA. Okay.

And that's not tied to an employer. That's an individual retirement arrangement is what that stands for. And you can work with a SmartVestor Pro on that. You can reach out to one of those folks on our website, RamseySolutions.com. There's also DIY options, you know, through like Vanguard and Fidelity. But that's a great way they can, you know, I think it's 7,000 for... 7,000 this year. Is the contribution limit. And so they can contribute up to 7,000. If they made 7,000, they can contribute up to 7,000.

And if they made more, it's still $7,000. But you can't contribute $7,000, but you only made $4,000. Sure. Would it make sense for them to follow the baby steps and do the 15% at this age, or because they have additional funds, they should just go as close as they can to maxing it out while still having the emergency fund and doing some of that other savings?

I think it really depends, kind of like what George laid out with those other short-term goals. Do they have education expenses to cover, for example? Yeah, I wanted to ask about that. On the horizon, what do you see for both of them as far as educational expenses or even living expenses, whether it's rent or... Because that's going to inform a lot of this as well. Moving expenses? Who knows? Yeah.

So right now they're both talking about going into the military. And if they do that, it'll be four to six years. And so all those living expenses, everything else will be covered. Their health insurance, they won't have any of those expenses. If they don't, my 17-year-old is talking about going to...

like a trade school. - Okay. - And so the expense won't be nearly as much as the four year. - So although if they do the military route, that's four to six years where it's covered, that's also four to six years where they can be stocking away money for a down payment when the time comes.

And so, and also, you know, kind of blending what George said with what you're saying, if you did choose to start helping them put money away, you could also think, okay, maybe down payment is the next thing that we're going to do. Because when we think about the baby steps, because you said, can we apply that to them?

Baby step three is getting three to six months of expenses saved. For them, that's going to be something very minimal. So maybe they've just got some money set aside and it's there. But if they start saving for a down payment, that's something because the horizon is six years from now. You could throw that in an index fund and let it grow for the next six to seven years or more until they're ready for it. If you're not quite ready to get into that phase.

retirement building phase with them. Perfect. So you've got options. And you can do that in a non-retirement account. That's right. Like a taxable brokerage account and just put that in some index funds for the next, you know, four, five, six years as they're in the military. I mean, that's going to, that could, with compound growth, you know, it's going to start to take hold after a few years. But their savings rate right now is really the, is what's going to be the ticket. Yeah. That way they can get to it if they want to and there's no penalty associated.

All right. Awesome. I really appreciate it. Absolutely. These are fun conversations to have when it comes to a 16, 17-year-old, bright-eyed, bushy-tailed, no debt. It's amazing what parents can do to set their kids up for financial success instead of the hacks I've been seeing on social media, Jade, which is you should get a credit card and add your three-year-old as an authorized user so that when they're 18, they have an amazing credit score so they can go out and get as much debt as they want. Yeah.

parents do you understand how dumb this is and here's what happens most of the time the parent ends up making terrible financial decisions and tanks their kids credit score accidentally when the kid's 18 they got a 500 credit score i'm like if you do if you're gonna do anything just take 50 or 100 bucks and just set it aside in a brokerage account for them if you're gonna do like you just set some money aside why does it got to be attached to credit well your toddler being an authorized user is the real wealthy hack jade that's

It's what the wealthy people do. Drives me crazy. Oh, gosh. Okay, let's get to Karen before I have a moment here. Let's get to Karen. Karen, how you doing? She's in Green Bay. I've been better. So great to talk to you guys. Thank you. Sure, too. I have a 2016 Kia Sorento, and this week the, what is it called, the head gasket blew. So I owe 10 on it.

Excuse me, I owe 11 on it. Okay. I can either sell it for an offer. I've gotten up to $6,500 for it. I'm getting around $6,500 just to sell it as is. Broken. With the known problem. Is that to a private party? Correct. Okay. I can fix it for about $6,700. Okay.

Or I'm also exploring trading it. I know you're going to say no to that. Trade it in to try to get a new car that will... On payments? Yeah. Girl. Here's what would happen. You trade it in. The dealer gives you like $2,000 for it. Yeah. And then you're taking on another $20,000 and you're going to increase your debt instead of get rid of it. And they probably will sell me a car worth about...

They'll charge me a few more on the card. Karen, you already know that's not the move, so we can check that one on the list. You need to stay away from car dealerships with a 39.5-foot pole right now. Do you have any money? Do you have any money saved? Because you mentioned getting the car fixed. I have a little emergency fund, $5,000. Okay. Okay.

For this kind of a thing. So you almost have the money. If you sold it for $65,000 and then you took the other $4,500 to cover the difference, you could pay off this car, but that would leave you carless, of course. Right. Are you single? Then where do I get a car? I'm married. I work from home, and a friend's been helping with driving my kids for sports and stuff. So you guys have another car?

My husband's pickup. Oh, okay. So could you go down to one car for a season? Just briefly while you save up $2,000 or $3,000. And then buy what? Just get a beater, and this is temporary. And then when you get another couple thousand, you add to it. Because here's the thing. When you buy a $2,000 or $3,000 car, it's not going down in value anytime soon. It's already taken the major hits. So just upgrade it little by little until you get to at least $8,000 or $9,000.

And then that's how we walk up this ladder of buying a car in cash. I would also go to a bunch of mechanics and get bids for this because online on RepairPal, it's about $1,600 to $1,900 for this repair, not $6,500. So I'm not saying that, but look into that.

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw, and this is your show, America. We want to help you take the right next step with your money in your life. The number to call is 888-825-5225. Jacqueline starts us off in the North Pole, literally. Wow. Jacqueline, is this true information?

Yes, we're hanging out here with Santa in negative 40 degree weather right now in Alaska. Holy moly! I wanted to pull the Will Ferrell, you know Santa? Wonderful. My nephew actually has said that and it's awesome. It was a beautiful moment for me because I love health. Incredible. Well, it's funny you guys talked about side hustles earlier because because we live in the North Pole, there's not a whole lot of resources up here. And

It's very expensive to live here. So my husband got stationed up here. He's Air Force. And he got stationed up here, and we had some major sticker shock when we got up here because things are just so incredibly expensive. So I started babysitting as kind of like a side hustle to pull in a little bit of extra money, and it exploded into this ridiculously good-paying job. Wow. That's great. So we weren't lying. That was one of the ones we mentioned. Yeah.

Right. I can earn anywhere between $6,000 to $11,000 in a month, just depending on the needs at the time and how much I can handle. How many hours does that equate to? Just curious. I usually open from 6 a.m. to 6 p.m. Okay, so it's like a daycare. Roughly.

Yes. Yeah. A hundred percent. Okay. Um, but I also homeschool my, my five children, um, at the same time. So it's, it has to like the, the workload has to coincide with what I can, you know, manage with that as well. So that's why it fluctuates so much.

My question is, I've been contemplating possibly taking this business to, like, turning it into an actual business. I'm wondering, though, if I should because, of course, being in the military, we don't know how long I'm going to be here. And, I mean, that could range anywhere from, you know, another year to maybe three years, depending on my husband's job. What does that mean when you say turn it into an actual business?

Is that like actually renting space and turning it into an unofficial daycare? Okay. And the purpose to doing that would be so that you can bring in more kids and earn more money.

Yes, because there's a desperate need. I've had people call me crying because they desperately need to go to work and I just don't have any more room. And it's just, it's heartbreaking to have those phone calls and just say, I'm so sorry, I just cannot do anything else. So your goal is to rent some space locally, hire more people, and expand this operation? Correct, yes. Okay. And what's your question? Well, the issue is, I don't know, one, how to...

even begin doing that. And then two, if it's even worth it to do that, because like I said, we could be gone in a year or two. Well, when I, when you mentioned that to me,

assuming assuming all the other things are in in place for a moment assuming you don't have any other debt assuming that i my first thought would be like okay what's this going to cost me and i'm looking around at buildings and then my biggest my brain goes to insurance because i'm thinking okay liability insurance is the hardest part of daycare yeah so that's where you're i believe that that's where your research is going to start have you ever already looked into that

I have looked into that and it is quite expensive here. Everything here is just, like I said, you take it from the lower 48, anything that costs, I don't know, $10, you multiply it by about $3.

And that's what the prices are up here. And the question is, because you have such a big, if you have the demand that you say you have, and if you're thinking to yourself, listen, I found this place on the corner. I know what the rent is. I know what the liability insurance is going to cost me. With the demand that I think I'll have, will I be able to offset that in a way that I can actually make a profit? That's the question. Got it. Okay.

Okay. And also be thinking about licensing, board of health, background checks for employees. There's a lot going on here, you know, getting an actual business set up, business banking and all of that is going to be a part of this. So I would, your next step is just do a lot of homework and maybe talk to people who have been in this business locally. Because I assume there's daycares in the North Pole area, right? Right.

Yes. Just not enough. There are a few. Yeah, there's just not a lot because a lot of them go under due to the financial stresses, everything you guys just spoke about. And I don't want that to happen to you. If that's happening, there's a reason for it and it just may not be a sustainable business. And that might mean you need to scale down the business and go, all right, I can only take on

five kids a month and I'm going to do it out of my house until we move and I'm not going to make this a business. Or you could figure out a way that's, listen, I'm trying to think through this with you. A, I hear what George is saying there. It might be because there's just a, an issue with the, how expensive things are. That's why people's businesses are failing or listen, talk to those owners and figure out what was going wrong. Cause some people they're good at watching kids, but they're not good at running a business. Right? So it could be that their business sense was off and,

If whatever you find out, you could also get with a buddy and be like, listen, I've been running this daycare. What would you think about? Would you be willing to open your home and run a daycare? I'll show you how I do it. So it's almost like you're creating a bit of a franchise out of this with other moms that you know, and maybe they're opening your homes and you're helping them get that started and you're taking a cut. There's a lot of things that you could do here to get creative.

But I think the crux of everything that George and I are saying is whatever you decide to do, you're stacking up cash and you're not going into a bit of debt in order to do it. Because right now you're in this place where it's cash flowing. It's making you a lot of money. What I don't want is for you to get excited about moving forward, get locked into something and feel like your only option is to go into debt or take out a loan in order to fund some aspect of this business. Yeah.

Fair? Right. Well, I have one other option that I might be able to consider. And they're actually the woman that built the house that we currently live in because we have no debt other than our house currently. Okay, good. We have...

plenty put aside for retirement considering our ages. And we've got everything, kind of our ducks are in a row, so to say. Okay, good. And I just don't want to jeopardize that because my oldest son is special needs and probably will be dependent on my husband and I for the rest of his life in one sense of the word or another. So we're trying to find... My original dream was to become a pilot, and I still want to...

achieve that dream at some point. But the older I get, the less likely it seems that that's actually going to happen. So I'm trying to look for alternatives. And one question to you guys would be, like, could I run a business like this from long distance? Like, say we were to move...

Excuse me. Say we were to move and I could run the business from... I would just sell the business before you move. I agree. I think it's going to be too much headache and it's going to end up causing you financial stress and emotional stress. Especially with child care. I just feel like that could... It's got so much... It's not exactly a remote business. Right. You know what I mean? Right, right. Okay. So I would just sell it and hope someone would buy it. And that's one of the reasons I'm not going to debt for this. We see too many stories of people taking on $200,000 in SBA loans

business fails well guess what you don't get to just erase that debt now you still owe two hundred thousand dollars so move slow move at the speed of cash and remind yourself why you even did this it was hey i just want to make a little extra cash it's okay if you don't turn this thing into an empire uh in the north pole but what a cool story that would be that would be amazing she's crushing she's on her way all right thank you for the call jacqueline stay warm more of the ramsey show right around the corner we'll be back

Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225.

The Ramsey Show question of the day is brought to you by Neighborly, your hub for home services. In case you're a new listener, you might be wondering, what does that mean? Well, Neighborly is a family of locally operated home service providers who are dedicated to giving homeowners excellent service. So start your search today at Neighborly.com slash Ramsey. Today's question comes from Kate in Nebraska. She says...

I've always told my 18 year old son to avoid debt, which means he has no credit score. A family friend who is the same age recently tried to buy a car insurance and was quoted outrageous prices because she doesn't have a credit score.

She was able to get added to her grandma's policy for less than a quarter of the price. This has made me think he should get a credit card and build a good credit score. How can a young person get insurance at a reasonable price with no credit history? Well, you know, there's there's something to there's a couple of areas to this, George, that my mind goes to immediately. Number one, the type of car.

That's true. Number one, if the car is paid for or not, definitely can increase your rate. Obviously, if you have a brand new 2023

What's a nice car, George? I don't know cars. Not a Civic, but like a sportier car. Yeah. Camaro. Camaro. Like the color of the car matters. If you get a Camaro in red, listen, that insurance is bonkers. And there is just something, depending on the state that you live in, if you live in South Florida and you're a new driver, it's just going through the roof. So there are a lot of factors there. But at the core of this question is really the credit score. And that's what I think that we need to dig in the most because...

It's one factor. So, Jade, I actually wrote an article on the Ramsey Solutions website called Insurance Score, How Insurance Providers Use Your Credit Score. So in here, I talk about the other factors because credit score is one factor. We will admit that. But there's other factors like your age. The younger you are, the more expensive it's going to be. I'm sorry, but teenagers are likely to get into a fender bender. Yeah, that's not going to change. And so, you know, Gen Z is getting the mine shaft here while boomers get the gold mine. I'm sorry. Yeah.

Your location, like Jade was mentioning, high population areas are going to mean higher premiums. Rural areas, lower premiums. Again, it's all about risk for this insurance company. It's not because they hate you. It's all a measure of risk. And lastly, it's your history of claims.

So if your kid has had a fender bender already, their insurance is going to go through the roof and it stinks. So those are a few factors. But if you don't have a credit score, there's still a lot of ways to get a better deal on your premiums, which is pay your other bills on time. They're going to look at other payment history.

And so you want to avoid those late penalties. You also can bundle auto insurance with other types of insurance to save. You can raise the deductible. If you guys are out of debt, fully funded emergency fund, a higher deductible puts a little bit more risk on you, but it lowers your premium.

And the other thing, Jade, is people will shop with one company. They'll go with some name brand they saw on a Super Bowl commercial instead of shopping around. So what I do is I shop with one of our Ramsey trusted pros. So I get in touch with my people at Zander Insurance and I say, hey, can you shop the top companies and tell me what the best rate is? And these are only really highly rated companies. These aren't Bobo brands. Yeah. But they also may not be the big ones you've heard of.

That's true. So that can also save you big money just going, oh, we're not getting a good deal. I need to shop with an independent broker. That's a really good point. And there's also a deeper level to this conversation that I just want to tackle real quick, because the fact of the matter is when you living a life without a credit score does is not always the easiest choice in the moment because it's

you can always find like a bunch of kind of like little factors. Well, it'd be, it'd just be easier if he had a credit score, then he'd just have a lower rate. And you kind of think of it like that. And that, that pops up a lot of times. Think about renting a car. People say, Oh, well, if you don't have a credit score, you can't rent a car. And I'm like, you can, you may have to jump through a few more hoops. Like, let's be honest about that. You may, they may make, take more of a, a hold on your account. You know, all these things that, yeah, yeah.

If you had credit, they might not do that. But if you had credit, do you also know what you have is debt? So you can't have one without the other. You know, same thing with credit cards. People were like, oh, it's just easier for me to just pull out my credit card and swipe it. I'm like, yeah, that's why you swipe it so much because it's easier. So there's a discussion here about

It's really what you're trading. You know what I mean? And it's like, listen, if you're saying I want to set my kid up for success and you understand that part of the way that you're setting him up for success is I'm teaching him that we don't have to borrow money. We don't need a credit score. We give ourselves credit that we can earn the money we need. We can manage the money we have in order to have the lifestyle that we feel we deserve. And I feel like that's the teaching that's behind this. And when you make that choice and draw that line in the sand, you're also saying to yourself, yes,

You may have to jump through a few more hoops because the fact is our society is not set up for it doesn't favor the people who choose to not use credit. It favors the people who do use credit. So there is that piece of this that you just have to accept and go, listen, I'm willing to take a couple of hits sometimes in order to maintain my peace. And I think that that's what we need to be teaching our kids is that give yourself credit. Don't depend on the credit score. Oh, I like that.

Yeah, that's true. And getting that affordable used car and have your kid work part-time to afford the insurance, these are good skills for this kid to learn. And then the insurance will go down over time as the kid gets older. That's right. So I'm going to just suck it up and do all those things I mentioned. And we'll put the link in the show notes, James, the producer, can we do that? To the insurance score article that will give you all those tips I mentioned and give you a deeper dive on that. Love it. All right, Nick is up next in Providence, Rhode Island. Nick, welcome to The Ramsey Show.

Hey guys, thanks for having me. Sure. Hey, so I was hoping for some advice, a little guidance. My wife and I, we have two young kids under four years old, a four and a two year old, just purchased our forever home in Connecticut. We previously owned, I had two rental properties previous to that, holding onto one and we sold the one that we were living in half and then purchased our new house.

I have some money in savings and I have an opportunity that if I were to sell my other rental property that I do have debt on, um, I'd be able to pay off my primary residence. Um, and I'm kind of going back and forth, um, whether it's a good idea or not. Um, you know, I, I,

I, yeah, I just, I'm just trying to figure it out. I'm kind of torn a little bit, you know, whether to do it or whether to keep the money and invest it and maybe get some more rental properties. But I would have to take on more debt, obviously, which I know, you know, I've been with you guys for a few months now. And it's, you know, not really the path, you know, that suggested. Look, what do you owe on your forever home? 405. 405. And if you sold the rental, what would it bring?

So the rentals, I could sell it for $550,000 and I owe $248,000. So I'd probably take home after taxes right around $260,000. So it wouldn't be enough to actually, it wouldn't be enough to fully pay off your forever home. It would just make a big dent. Is that what you're saying? Yeah. So I have just under $300,000 on the bank as well, like liquid cash. Oh, hey, I like it.

How much money do you guys make a year?

So we net around $12,000 a month. My wife and nurse, when we moved into the new house, she actually ended up only going to two days a week. And then I work, I make around $155,000 and she makes around $60,000 now. Amazing. Just curious, the rental, when you rent it, how much does it bring? Like, what do you profit from it every month? Yeah, yep.

So I actually just handed it over to a property management company. It was cash flowing around $2,600 a month. So that's after, you know, mortgage, after what it brings in, I cleared 2,500. Now it's, you know, just over 2,000. Okay. And then I also, I'm just curious, your forever home, what's the mortgage payment on it?

Yeah, so it's a high interest rate. It's at $3,700 right now. Listen, here's the numbers I see. I'm looking, I'm like, okay, listen, $2,000 of cash flow, that's great. But if you sold this rental,

paid off your home mortgage. Now you've got the $3,700 or a portion of that because obviously, you know, you've got to keep paying your taxes and whatnot. You get that back in your pocket and now you're turning around and you're restacking your savings. Essentially, you're either adding it back to your house is paid off so you can invest as much as you want. Like you can literally turn around and invest that money.

And I feel like that's the move. That's a lot of money, George. And the other option is you guys make great money. If you could stack up $100,000 extra, you could just pay off your primary residence from the savings and keep the rental and then attack that one next. So either way, I like that plan. But let's get aggressive about making one of these moves happen. I don't think you'll regret selling the rental and having a paid four house because you're going to be able to get another rental lickety split with that kind of income and no payments, my man. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. This is your show. Give us a call at 888-825-5225. We'll talk about your life and your money. Well, Jade, producer James slipped this on the desk, and it's a fantastic, fun article from Yahoo. People are revealing the everyday items they had to stop buying because they became too expensive. That sounds like a BuzzFeed headline. Yeah. BuzzFeed people, they have no character limit for these headlines. Ha ha ha.

Goodness gracious. That's funny. Listen, yesterday's prices are not today's prices. We all know that and we all feel that. So let's read a few off and see if they're relatable here. Number one, concert tickets. It's like everyday things people stop buying because they became too expensive. I didn't go see Beyonce. Everybody else was renaissancing and I was at home. I felt the same way with Taylor Swift. Everyone was Taylor Swifting. I'm like, y'all got some money. Bro, folks were cashing out their 401ks to get these tickets.

I just can't stop. What's the most expensive concert you've paid for? Recently? For one ticket. Okay. Thank you, George, for teeing this up. I saw U2 in the Sphere. Oh my goodness. And I was deeply disappointed. Can you tell us how much those cost? Because no one has told me. Is it like $1,000 a ticket? Everything all in for both of us, it was about $1,000. So 500 bucks a ticket. Yeah. And if you spent double that, you could get even better seats. And I just...

It did not. Not a thousand dollar experience for you. Here's the thing. It made it worth it because it was my husband's 40th. But on another occasion, I would have been like, I want my money back. Oh, gosh. And just imagine how many people put that experience on the credit card. Oh, wait.

Because how many people are like, you're budgeting for this trip. You know exactly what it's going to cost. You've got, you're paying for everything in cash. They've done studies, George, that say, you know, we already know that when you put stuff on credit, you spend more because you don't feel it. They've done studies that said one of the purchases that you'll spend the highest percentage more on, up to 100% more, is concert tickets. That makes sense. People will literally pay double the price when they put it on their card. Well, and I think the younger generations are willing to...

over more for experiences. Yes. And then they get the older crowds, the Gen Xers and the Boomers with the nostalgia. Yeah. Because now everyone's got, I mean, Elton John's on his 90th final reunion tour. I'm like, goodness gracious, man. Yeah, but those tickets aren't as expensive. And that's what I say. Go watch the old heads perform. Like, I go see Kenny Loggins. You know what I'm saying? Like, I go see these old acts because the tickets are like $70. Still fairly reasonable. Oh, my goodness. Yeah. Okay, that's a good one. Next up, we've got bowling.

Oh. This person said, a few years ago, my girlfriend and I went bowling at a local place. It was maybe 60 bucks for shoe rental and two hours of bowling for two people. Recently, we checked prices online. Same rental and playing time is $150.

Whoa. For bowling? I mean, that thing better come with like a massage while I sit and wait for my turn for 150 bucks. I know that's right. That's crazy. What's next? She says, ads and, okay, ads. Being added to Amazon Prime and Netflix was a breaking point for me. Oh.

What does that mean? The ads? I guess it didn't make it more expensive, but it's just a frustrating piece there that you're paying that much for something that still has ads. Well, my thing is Amazon Prime and Netflix, the price has gone up. Like Hulu too. Those like all those little subscription streaming services. It was like, I don't know, five to eight dollars. Now everything's like $19.99 if you want an HD. Otherwise, we're going to show it in black and white. Yeah. And four by three in 720. Everyone went into the teens. They went from the single digits to the teens for sure. Yeah.

Oh, this one's relatable. Everyday items that people stopped buying because they became too expensive? Airbnb. Oh. Anytime I look on Airbnb and I see all these fees, like, it's $99 a night, but there's a $400 cleaning fee. Listen, clean it. Spend what you need to get it clean because...

I need to know it's clean. I'm just saying, I usually, the only time I stay in an Airbnb, if it's with a big group and we want to do something fun and local and we're hanging out, we did that in Arizona. It was fun. But otherwise, I'm just staying in a hotel. I'm sorry. You know what? I stay in a hotel because I feel like there's a corporate juggernaut supporting the fact that my hotel room needs to be cleaned properly. I've seen some Airbnb horror stories. Okay.

So there's part of me that's like, I kind of get it. Hey, could you go ahead and start the laundry for me? And while you're at it, there's some weeds that need to be pulled from the back. I'm like, listen, I'm not here to do your chores. Please. I'm paying you for a service. No way. Oh, ordering pizza is getting too expensive. This person says, I'll still order for pickup sometimes if there's a good deal, but no more just picking up the phone and randomly ordering a pizza. That's my toxic trait is I'm always like, I am picking up the pizza. I ain't paying for delivery.

And my wife and friends like, dude, just pay for delivery. I'm like, it's $4.99 for the delivery fee. Then you got to tip the pizza person who delivered it. Are we talking about just basic like Domino's or Pizza Hut? Or are we talking about like Uber Eats delivering a specialty pizza? Eh.

I think this is more the whatever your casual local pizza place is. I will never use Uber Eats. I don't trust Uber Eats personally. And it's not to down because I know a lot of people do that as a side hustle. You know they're grabbing a fry. Well and they're grabbing a fry for sure. That driver is grabbing a fry. You mean to tell me if I go pick up your order at McDonald's and that fresh hot McDonald's french fry is sitting right there in my

cup holder I'm not going to reach over and just grab a couple I have trust issues listen though we got a lot of people doing side hustles getting out of debt that's what I'm saying I'm

at them. Keep doing it. Our crew, they're not doing that nasty stuff. No, our people do it right. If you're on this thing for the right reason, gazelle intensity, you're not that person. But I just know that happens out there. Yeah. No, support your local... Listen, if you have the money, support your local Uber Eats driver because they're trying to get out of debt. And while you're at it, pay for my order too. Okay.

I like that. All right. Next thing people stop buying because they became too expensive is new clothes. Someone said, tried to downgrade from the mall to Amazon, but that stuff's mostly trash. Listen. Well, Rachel Cruz's feelings are hurt. She loves shopping for clothes on Amazon. You have to know how to shift through the trash though. And I don't know how. They said, I thrift now. It's not as bad as I anticipated. A lot of the stuff has discarded with tags. I even found a sweater that I'd wanted years ago.

Drifting is on point. Listen. Reduce, reuse, recycle. There you go. This girl said, I love this. She said, my car. I just said, screw it. Screw it. I'll work from home and get me a bike. Wow. Come on, girl. I know. That's right. That's good for the body too. You know, getting your workout in. It's good for the planet. I like it. But yeah, cars, especially if you live in a city.

Obviously, some places you can't just get rid of your car and bike around. True that. Some climates, some locations. But a lot of people that live in an area with public transportation, I'm from Boston. You don't need a car living in Boston. That's true. You can get around to most places with the T, as we call it. But let's talk about just saving money on gas because I just feel like-

if you don't live in an area that you can get from most place to play, like you might have to drive your car to get to work, but you might Publix is around the corner. You might be able to walk to get your groceries or ride your bike to get your groceries. I think we need to start considering, you know, being a little bit more,

with our transport. That's good. Last one on the list, eating out. They said not worth the price and the food quality is not there anymore and there are smaller portions for higher prices. I agree with that. Very true. That feels like a complaint I would leave. 100% and listen, I am not buying a cocktail at these restaurants. If it's a very nice fancy restaurant and I know that they craft very nice cocktails, I'll buy one. But if we're going to Applebee's, which I rarely, you know, listen, I'm not going to Applebee's, but I'm just saying don't buy

It's a cocktail of Applebee's. Yeah. It's not working. When Jade is going to Red Lobster and getting a lobsterita. Why does it gotta be Red Lobster, George? The Cheddar Bay Biscuits. You're dipping it in the lobsterita.

Okay, that's disgusting. No, that's a good one though. I'm actually going out to eat tonight with my wife. It's our date night and we're going to a nice like high-end sushi place and I'm already like I'm getting ready for this bill, Jade. Listen, George, I'm still on Red Lobster. I'm still on Red Lobster and if you invite me, I'm going every time. I'm just telling you right now. You can't pass up the Cheddar Bay Biscuits. Hashtag not sponsored.

But it's true. Like, let's call out that inflation has made things more expensive. We're not here to tell you that you're making it up. But also, don't over-inflate it and get all big and emotional. Just don't buy it anymore. Half the stuff that we're upset about with inflation are luxuries, Jade. I know. I know. Outside of rent and gas and normal basics like groceries, all these still exist. I was in the other day and I was like, oh.

Food's not that bad. Like you can get a buggy for a hundred bucks. Yeah. For me, it's the tipping fatigue. Like I feel like some of the reason I've pulled back on certain things is I'm just the tipping fatigue is what got me. It's like, all right, listen, I would usually pop in and maybe get a coffee, but I'm tired of dealing with the guilt of not tipping. So it's like, I'll just save the money on the tip and the coffee. Like I feel like it's that combination of inflation plus the dialed up tipping. And for me, it's fees. Everything's got fee. I'm calling it fee-teague.

I like it. Hey, on the tipping thing, normally, you know, they flip the screen around or someone else asks you, like, do you want to tip your, you know, barter? I've had people recently ask me, do you want to tip like me? If I could probably ask, that's the most awkward. I would tip you, James. I would too. You're worth it. Worth every dime. Not today, but one day we'll tip you. Listen, I'm all for generosity, but not when it's a requirement and it's forced. That's right. Hey, good stuff. This is The Ramsey Show.

Ooh, that'll make you think. That'll burn some brain calories right there. That'll make you stroke your beard, yes. Good stuff. I got one. It's not much, but it's there. Ha!

All right. This is The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. David is up next in Chicago, Illinois. David, welcome to the show.

Thanks for taking my call. How are you guys doing today? We're doing great. How can we help? Well, I am kind of planning out the next phase of my life. I'm almost 54 years old and looking at retirement in the next six, eight years. Cool. And the plan is to eventually sell all of the assets and live on a sailboat and sail the Caribbean for about six months out of the year. And when hurricane season hits, you put it on the shore and live up in a house up in northern Wisconsin. Wow.

Wow. I guess I'm just looking for affirmation that I can do it, I can afford it, and then the best plan of attack to finalize up the savings and so forth. Very cool. What a cool plan. Yeah. That's fun. All right. So are you single?

I am. I'm happily divorced, no kids. Okay, so you're ready. This is going to be a solo adventure for you. No, actually the girlfriend is in on the adventure. She is going to take care of the house up wherever we decide to live the summer months at. I figure I'll probably check out long before she does, and then that way she's taken care of on her end because she's done that, and I'm taking care of the boat and everything on my end. Wow. When you say sell the assets, what does that entail?

Um, currently have about 10 cars, an airplane. Uh, my house is paid for. Um, and then as far as what I've got in money market for one Ks and type stuff, obviously the, the cars will go away. The airplane will go away. And, uh,

I'm going to assume your net worth is in excess of $5 million. Oh, God, no. What is it? I actually just added things up. I'm sitting right about 1.2. Okay. I mean, what are these 10 cars for? You just collect them? Yeah, I mean, I've had them for... I built up the collection over the years. Two of them are gifts that are going to be gifted to my nephews when they each turn 16. Okay.

So really, I guess I only have eight and there's seven days in a week. And so you got to have a spare.

Are they all paid for? Is there a debt on any of this? No, everything's paid for. The values on the cars total about $530,000. And that's insured value, fiber classics, muscle cars type stuff. And you're willing to give all of this up for the dream of the sailboat? How much does a sailboat cost? I'm looking between $225,000 to $250,000 to spend on a boat.

Okay. Is that used? Yeah, definitely by use. And the thought process is actually to try to acquire one in the next 12 to 18 months. That way I've got time to do anything that needs to be done to it so that when we're ready to go, it goes with us and it's ready to go. And then that way it's also paid for. So the question is though, my question is $250,000. Great. Why do you have to sell everything to get that? Because

You said yourself 530 is in the cars alone. I don't know what the airplane is worth. And then you've got this other house. That's going to bring a lot of money. I don't know why we have to liquidate everything. When I go to retire, things will be liquidated. Not to acquire the boat. The plan is to acquire the floating asset I paid for and maybe use it a few times a year, maybe put it out on charter a couple times a year, but then so that in the next...

seven, eight, nine years, whenever I decide to stop flying for a living, that I can just sell everything and move on to the next adventure. And then that money, you just drop into some sort of investment accounts? Exactly. Got it. How much do you make?

A little over $200. Wonderful. Yeah, I fly corporate jets for a living. And, you know, base is about $190 between extra stuff. And if I do any contract work for a couple thousand a day, I just call it roughly $200. Okay. And just to clarify, the girlfriend, she would purchase in her name the house in Wisconsin? Or what's the plan for that? Because I know you said she'd take care of it, but I want to know more.

That's her plan. That's the plan is that she would acquire, she lives separately in her own house now. So she would eventually either take out a mortgage or she would acquire the house that we would live in for six months out of the year. Six months out of the year, we'd live on a sailboat and sail the Caribbean. And then obviously that way, you know, that house, again, she's going to live longer than I will. But she doesn't have this house in Northern Wisconsin yet or does she? She'd sell her house to get it.

right she would sell her house to get it and and uh she does okay financially um not great but she has a nice pension setup so she's in good shape there what's the would you pay rent when you're there for six months out of the year to help her cover the mortgage how does this work no you're just living together like she's she covers it he does the boat like you'll cover the boat six months she covers the house six months yeah is that the idea now is there any plan to get married

Probably not. Okay, you're just living your life. Yeah, I mean, we're both divorced. Her kids are done and grown. And you're keeping the money separate. Like, it sounds like everything is...

financially very separate. I mean, obviously I make more than she does. So I carry, you know, the majority of the burden when we go out or vacation type stuff now. Yeah, but that's, you're the boyfriend. So, and you don't mind doing that. It sounds like. No, no, not at all. Okay. All right. Nothing sounds way off here. My big question is, are you going to be able to, once you officially retire, you're not bringing in more income. Will your assets generate enough income to cover all of your expenses?

I would hope so. I've always, you know, 25 years ago, I was gifted the book, The Millionaire Next Door, obviously read that and kind of lived by that most of my life. I try to live well below my means. But yeah, I guess in my mind, I want to have a couple hundred more

tucked away before I make this ultimate move. What's in your 401k, like all of your retirement accounts combined? My money market account has about 120 in it. My checking account is about 40. I've got two 401ks, about 145. Currently, 20% of my salary goes into my 401ks. I have...

the, the Roth that I have that I just opened up in the last, uh, few weeks, that'll be topped out here in a couple of weeks. Um, you have catch up contributions as well. So that helps you. Yeah. And I really don't spend a lot of money. I get half the half of my monthly, uh, I'm out on the road flying. And so all of my expenses are there. My per diem is covered. Uh,

My per diem on the road actually covers what I eat the rest of the month. So like 450 all in and various retirement accounts. Does that sound about right? Well, you've got a house that's worth about 300. Well, just the retirement accounts. Because I'm looking at what is actually creating income right now. The only thing that's doing that is the 145 in the 401k and some in the Roth.

Correct. So I would if I'm in your shoes and you really want to live this dream, I would liquidate now, take that money, put it into investments, max out all of your tax advantage accounts, put the rest in a taxable brokerage and index funds and let that money grow for the next six to eight years. There's also the 120 that's in a money market that's at five point six five. Yeah. Yeah.

And I still I think, OK, and you've got the forty thousand in checking. I think that you've got a lot of money in a lot of places. It would do you well to kind of get it organized and work with a professional if you're not already. When I look at when I look at this just at a glance, I look at it and I go, OK, he's got forty thousand in checking. I'm moving that to a high yield savings and I'm going to call that just my emergency fund.

And then I'm going to take this 120 that's in money markets. I'm going to invest that probably into some kind of brokerage account, again, working with a professional. Then I thought I heard you said you had 145 in retirement and another 140 or so in another type of retirement fund. That's good. Um,

And so I think it's just kind of consolidating this into George George's point, whatever you can liquidate now, that's not a necessity that you're like, listen, I have it because I have it. But if you really want to make that money work for you, I would work with an investment professional and get it invested so that when the time comes, you want to make sure that you can live off of that nest egg. You can keep maintain the lifestyle you have and greater without really touching anything.

you know, the nest egg if you don't want to so that you know that you can go, you know, as long as possible. So that's what I'm looking at. And I would, I mean, just liquidating the cars alone, if you went from 54 to 62, you took all that money and put it in an investment account making 10%, you'd have $1.1 million at 62 when you're ready to retire. So just something to think about

to have assets that are actually generating income instead of just a bunch of toys. But I'm hoping this dream works out, man. It sounds awesome. Call us from the sailboat one day. That'd be fun. That puts this hour of the Ramsey Show in the books. My thanks to Jade Warshaw, my co-host, all the folks in the booth keeping the show afloat, and you, America. We'll be back before you know it.

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