I’m Dumpster Diving To Get Out Of Debt

Summary

Podcast Summary: The Ramsey Show Highlights – "I’m Dumpster Diving To Get Out Of Debt"

Release Date: January 30, 2025
Host: Ramsey Network
Duration: Approximately 9 minutes

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Introduction

In this episode of The Ramsey Show Highlights, the Ramsey Network delivers actionable advice on personal finance and debt management, featuring insights from financial experts including Dave Ramsey, Rachel Cruze, George Kamel, and Winston. Titled "I’m Dumpster Diving To Get Out Of Debt," the episode delves into strategies for couples navigating different approaches to becoming debt-free and addresses budgeting challenges faced by individuals with fluctuating incomes.

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Section 1: Bridging Different Debt-Free Intensities – Joel’s Dilemma

Caller: Joel from Ozark, Missouri
Timestamp: [00:04] – [03:55]

Joel’s Situation:
Joel reaches out with concerns about the differing intensity levels between him and his wife as they work towards becoming debt-free. While Joel adopts a proactive approach, such as "watching the neighbors to see if they set a ten dollar lamp out on the curb I can hawk on Facebook" ([00:16] Joel), his wife prefers more relaxed methods like planning trips, saying, "let's try to take a nice trip with the girls" ([00:16] Joel).

Rachel Cruze’s Response:
Rachel emphasizes the importance of aligned values over intensity levels, stating, “the ultimate goal of where you guys are going, the direction in which you are going is consistent and it's together as a team” ([01:22] Rachel Cruze).

Dave Ramsey’s Insight:
Dave reassures Joel by highlighting the strength in their contrasting approaches. He references Larry Burkett, saying, “if two people just alike get married, one of you is unnecessary” ([01:10] Dave Ramsey). Dave further elaborates, “as long as you're aligned, as long as you both have agreed this is the goal, and that sheds off all the 90% of all the disagreements” ([03:49] Dave Ramsey).

George Kamel’s Perspective:
George adds that Joel’s intense approach is beneficial in the early baby steps toward debt elimination, while his wife’s more relaxed style will be advantageous in later stages, such as baby steps 4, 5, and 6 ([02:45] George Kamel).

Conclusion:
The discussion underscores that differing intensities in financial approaches can complement each other when foundational values and ultimate goals are aligned. Embracing each partner's unique strengths fosters a harmonious and effective journey toward financial freedom.

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Section 2: Joint Bank Accounts Before Marriage – A Social Question

Question: "My significant other and I aren't married yet. Should we have joint bank accounts?"
Timestamp: [03:56] – [04:10]

George Kamel’s Advice:
George advises against having joint bank accounts prior to marriage, stating, “you should not have joint bank accounts if you're not married. That should not happen until after you've said, I do” ([04:26] George Kamel).

Rachel Cruze’s Support:
Rachel concurs, highlighting the benefits of maintaining separate accounts to preserve financial independence until marriage ([04:10] Rachel Cruze).

Key Takeaway:
Maintaining separate bank accounts before marriage helps preserve financial independence and avoids potential conflicts, with the recommendation to fully combine finances post-marriage.

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Section 3: Budgeting with Variable Income – Art’s Challenge

Caller: Art from Nashville, Tennessee
Timestamp: [04:36] – [08:57]

Art’s Situation:
Art, a real estate agent, faces irregular income streams, with some months yielding $10,000 to $15,000 and others resulting in $0. Additionally, his wife, a self-employed photographer, averages about $1,000 a month ([05:08]–[08:10]).

Winston’s Guidance:
Winston introduces the concept of a “peaks and valleys fund,” distinct from an emergency fund. He explains, “Peaks and Valleys fund is just cash planning” to manage months with fluctuating income ([05:14] Winston).

Dave Ramsey’s Insights:
Dave shares his personal experience in real estate, emphasizing the necessity of separating the Peaks and Valleys fund from the emergency fund. He advises setting aside specific amounts to cover essential expenses during low-income months, clarifying, “This is not putting all of that in the budget. I'm just gonna slide 5k over here to cover the house and the water and the lights and the food in case I have a zero month” ([06:17] Dave Ramsey).

Rachel Cruze’s Recommendations:
Rachel suggests maintaining completely separate accounts for different financial purposes, ensuring clarity and peace of mind. She explains, “knowing that you're planning out ahead, I think is really, really important” ([07:28] Rachel Cruze).

Additional Tools:
Winston mentions the "paycheck Planning" feature in EveryDollar, which provides visual budgeting tools to help manage fluctuating incomes effectively ([08:06]).

Conclusion:
For individuals with highly variable incomes, establishing a Peaks and Valleys fund separate from the emergency fund is crucial. Utilizing budgeting tools like EveryDollar’s paycheck planning can provide clear visibility into managing finances during both high and low-income periods.

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Key Takeaways

1. Complementary Financial Approaches:
   Couples may have different financial intensities, but aligning values and goals ensures a harmonious and effective path to debt freedom.

2. Financial Independence Pre-Marriage:
   Maintaining separate bank accounts before marriage preserves financial independence and sets a solid foundation for post-marital financial amalgamation.

3. Managing Variable Income:
   Establishing a Peaks and Valleys fund is essential for individuals with fluctuating incomes. Utilizing specialized budgeting tools can enhance financial stability and planning.

4. Communication and Respect:
   Embracing each partner’s financial strengths and maintaining open communication are vital for overcoming financial challenges together.

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Notable Quotes

• Joel: “I'm more like on trash day watching the neighbors to see if they set a ten dollar lamp out on the curb I can hawk on Facebook.” ([00:16] Joel)
• Rachel Cruze: “The ultimate goal of where you guys are going, the direction in which you are going is consistent and it's together as a team.” ([01:22] Rachel Cruze)
• Dave Ramsey: “If two people just alike get married, one of you is unnecessary.” ([01:10] Dave Ramsey)
• George Kamel: “Because, Joel, for you, early on, baby steps one, two, and three, you need that intensity.” ([02:45] George Kamel)
• Dave Ramsey: “Peaks and Valleys fund is just cash planning.” ([06:17] Dave Ramsey)
• Rachel Cruze: “Knowing that you're planning out ahead, I think is really, really important.” ([07:28] Rachel Cruze)

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Final Thoughts

This episode of The Ramsey Show Highlights provides valuable insights into managing differing financial styles within a marriage and handling the complexities of variable income. Through relatable examples and expert advice, listeners gain practical strategies to achieve financial stability and freedom.

Transcript

[Dave Ramsey]

Foreign.

[Rachel Cruze]

Let's kick it off with Zoom with Joel from Ozark, Missouri.

[Dave Ramsey]

All right. Hey, Joel.

[Joel]

Hey, y'all.

[Rachel Cruze]

How are you doing? We can see you here too, which is perfect. What's your question for us?

[Joel]

So my question, my wife and I were different intensity levels as far as our process of becoming debt free. I'm more like on trash day watching the neighbors to see if they set a ten dollar lamp out on the curb I can hawk on Facebook. She's more like, hey, let's, you know, let's try to take a nice trip with the girls. So what my question is, how can, how can we kind of bridge that gap between our intensity levels to find a common ground?

[Rachel Cruze]

For sure. I have a question, Joel, for you. What baby step are you guys on? Are you guys working your way out of debt?

[Joel]

We're, we're like at the finish line with baby step two. So we're getting ready to cross into three, three, four, and five. And. And we're still fired up. I mean, we're on the same page as far as wanting to be debt free as quick as possible. So there's, there's at least that positive. We're on the same page. But just like I said, we're just different intensity levels. I probably need to tone it down a little bit.

[George Kamel]

I don't know.

[Dave Ramsey]

I think you're both doing fine. I think you're both doing fine. Larry Burkett used to say, joel, if two people just alike get married, one of you is unnecessary. So it's good that opposites attract.

[Rachel Cruze]

I was going to say, I think.

[Dave Ramsey]

One being fired up and the other one being chill. That's good.

[Rachel Cruze]

It's what you always find too. You know, when we talk to couples, there's always going to. That's you, Joel. That's out on the street looking for a lamp in the trash to be like, here's what we can do. And then there's always going to be the one that just says, oh, that is just not. That's not my thing. Right. So again, I think that that is so normal. That is so common, Joel. And I think the biggest thing is that your values align. The ultimate goal of where you guys are going, the direction in which you are going is consistent and it's together as a team. And I think that is far and beyond number one for me.

[Dave Ramsey]

Yeah. As long as you're aligned, as long as you're both have agreed this is the goal, and I'm going to go at it more intensely than you are, that's okay. I'm not going to do anything. Good luck with that. That's not okay.

[Rachel Cruze]

Yeah, no. Yeah.

[Dave Ramsey]

That's not okay.

[Rachel Cruze]

At that point, your values are not shared.

[Dave Ramsey]

That's a different problem. Now we got a marriage thing going on.

[Rachel Cruze]

Absolutely. Yes. And for Joel, I don't think that's it necessarily.

[Dave Ramsey]

No. I think he's described, you know, you guys are on the same page. It's just he's the guy with the lamp, and she's like, yeah, would you chill a little bit? I'm a little sick of Ramsey stuff right now.

[Rachel Cruze]

That's right.

[George Kamel]

Well, the way the baby steps are, it actually is great that you guys are the way you are. Because, Joel, for you, early on, baby steps one, two, and three, you need that intensity. You need that person to remind the other spouse of. This is what we need to be in order to get these first three done. Whereas your wife, she'll probably shine more in baby steps 4, 5, and 6, because you do get to kind of ease off the gas and just enjoy life.

[Dave Ramsey]

You know what? That's an interesting thing, because some people are marathoners and some are sprinters.

[George Kamel]

That's right.

[Dave Ramsey]

And so that the sprinter always does well. That's the intense. The gazelle intensity in the first three steps. That's me. And then my wife, Sharon, she's like, we're just going to keep at this. You know, she's the tortoise that wins the race. Beats the hare every time. Yeah.

[Rachel Cruze]

And I think the relational aspect, I love your question, because, you know, we get calls a lot on the Ramsey show in terms of this idea with relationships and money. And I think it's always a beautiful thing. And I feel like this is how Winston and I have experienced it and kind of probably you guys with your spouses. But I know for me, I'm like, I now have learned to so appreciate the strengths that he brings. Cause he's probably more you, Joel, and I'm probably more your wife, honestly, where I'm like, yeah, to enjoy life, that's what I do. I allow us to have fun and have a life. But Winston makes sure that we're not broke and that I don't spend everything. But again, I think there is that element of embracing your differences and finding the respect of what your spouse brings to the table that creates beautiful conversation.

[Dave Ramsey]

It's very, very important, though, that the ultimate goal is agreed on.

[Rachel Cruze]

That's right.

[Dave Ramsey]

And that we're both driving to that. And that sheds off all the 90% of all the disagreements. Yes.

[Rachel Cruze]

So great.

[Dave Ramsey]

It's just a question. So great.

[Rachel Cruze]

Thank you, Joel. Thanks for your question. Thank you so much for the lamp. All right, we have a question from Social, which is fun Alou, 1994. My significant other and I aren't married yet. Should we have joint bank accounts?

[George Kamel]

Ooh, I'm going to say immediately, no, you should not have joint bank accounts if you're not married. That should not happen until after you've said, I do. And then once you say, I do, 100% combine your money. I mean, we talk about it all the time. You go further, faster together.

[Rachel Cruze]

I love it. So great. All right, up next, we have another Zoom call, which is so great. We have Art from Nashville right here in Nashville, Tennessee. Hi, Art.

[Dave Ramsey]

Hey, Art. How are you?

[Rachel Cruze]

Welcome, welcome. What's your question for us?

[Art]

Yeah, I'm a real estate agent here in actually, Nashville, and I live in a world where it's pretty uncertain where my income's coming. A lot of times it's not as consistent as I'd like it to be. Business ebbs and flows quite a bit based on the market, and so that can be a challenge. Just curious, how would I look at budgeting knowing that that's the kind of, you know, income that I've got and the lifestyle I've chosen for myself?

[Winston]

Yeah, Art, tell us, has There been a $0 month? What's a normal month for you? What's a low month or a high month?

[Art]

Yeah, typically, you know, I sell one to two homes a month. Last year, I sold 18 homes. So, you know, you're talking about between 10 and $15,000 a month. But then there's. But then there can be two months where I don't make anything right. Like there can be. The wintertime is oftentimes a little bit slower than the spring or the summer. So, yeah, it's kind of.

[Dave Ramsey]

No.

[Winston]

That's a real problem. And a lot of people, regular income, commission, sales, seasonal, whatever it is. So what you're going to do when you open up your every dollar budget is look at it like a prioritized spending plan. So, you know, you got to cover the four walls. If we only make this much, we cover the four walls. Nothing else gets paid. If we make more than that, we can start to go to the next priority, whether that's debt, payoff, savings, the luxuries, the subscriptions, whatever it is. And if you do have a $0 month, you can look at this like a peaks and valleys fund where you set aside some of that money knowing you've got to cover those $0 months in the wintertime. And that'll help you avoid the freakout mode of am I going to get money this next month? And so getting out of baby step two and three really helps because then you have more cushion as well.

[Dave Ramsey]

Yeah, Art. I learned to do that peaks and valleys fund when I was doing real estate. I was first discovered these things. I'd gone broke in the real estate business. I was back to doing real estate again. I had some zero months, and I might have 20,000 bucks the next month, I mean, and that was real. So the Peaks and Valleys fund, what I want to point out is different than the emergency fund. This is. I have a $20,000 month, and I might have zero next month. So I'm not putting all of that in the budget. I'm just gonna slide 5k over here to cover the house and the water and the lights and the food in case I have a zero month. And that's different than an emergency fund. Emergency fund's only for emergencies. This is just cash planning. It's a different thing. So you got two different accounts here when you're running that. And this is only for those of you that have extreme volatile income. And extreme would mean you have a zero month. Most people that have a volatile income don't have zero months. Now, real estate business, that's one where you would. But most of the time you'll have, you know. You know, my worst month is 4,000. Well, you can cover most of your stuff. My best month is 14,000 or whatever, that kind of stuff. So you can cover. All you gotta do then is force. Force rank the difference. Then, like George was saying, in every dollar. You don't need the peaks and valley there. If you don't. If you're low average will cover your nut. That's what you run with.

[Rachel Cruze]

Yeah, for sure.

[Dave Ramsey]

But if you got a zero low average like he did, like you do, you've got to have that separate Peaks and valleys fund to cover that.

[Rachel Cruze]

Are you married, Art?

[Art]

I am.

[Rachel Cruze]

You are? Okay, I was going to say, because having. Oh, good, Congratulations. And I was going to say for your wife, probably having a completely separate account, you know, beyond the emergency fund. What Dave was saying for me, I know I like to see a completely different account of like, okay, here's some money. So if we do have a lower month, this isn't being pulled from the emergency fund. And it's so visually easy to see. There's something that gives me a lot of peace in that maybe your wife as well I don't know, but. But just knowing that you're planning out ahead, I think is really, really important.

[Dave Ramsey]

Does she work?

[Art]

Yeah, she's a photographer. She's self employed.

[Dave Ramsey]

Okay. Does she have. What's her low month?

[Art]

She probably does about 1000 bucks a month on average.

[Dave Ramsey]

Okay.

[Art]

Yeah.

[Dave Ramsey]

All right. So you still probably can't cover everything. When you have zero and she makes a thousand, you probably still need an account. Okay. And if she's making $5,000 a month, then this whole. The whole conversation just changed back again.

[Winston]

What's been really helpful is we have a feature in everydollar called paycheck Planning on that premium side. And we'll send you that bundle, Art, to help you with that. And that paycheck planning tool is a game changer because it'll show you based on how much income you have, how much expenses you have, when you're going to run out of money and you can start moving bills around, calling, switching it online so that you don't run out of money. Gives you that really clear visual.

[Dave Ramsey]

George is giving away bundle.

[George Kamel]

I know. I didn't know we could do that.

[Rachel Cruze]

I should give her.

[Winston]

Dave runs the place.

[Dave Ramsey]

He's generous.

[Winston]

God owns it all.

[Art]

Thanks, guys.

[Rachel Cruze]

All right. Thank you, Art. Thanks for your question.

[Dave Ramsey]

It.