A Large Income Won’t Protect You From Debt

Summary

Podcast Summary: The Ramsey Show – "A Large Income Won’t Protect You From Debt"

Release Date: November 29, 2024

Introduction

In the latest episode of The Ramsey Show, hosts Rachel Cruz and Jade Warshaw delve into the misconception that a high income can shield individuals from debt. Through real-life caller scenarios, they explore how financial pitfalls can ensnare anyone, regardless of their earnings. The discussion emphasizes the importance of budgeting, disciplined spending, and proactive financial planning to achieve and maintain financial freedom.

---

Caller 1: Amy from Pensacola – Over a Million in Debt

[00:20] Jade Warshaw introduces Amy, who has amassed over a million dollars in debt primarily from student loans during her and her husband's extensive education in dental specialties. Despite the substantial debt, Amy anticipates a significant income increase upon transitioning her husband out of the military into a new high-paying dental practice.

Key Points:

• Debt Origin: Accumulated through dental school and specialist residencies without student loans due to military benefits.
• Current Situation: Existing debt of $750K with a projected minimum income of $600K from their new practice starting in the summer.
• Financial Strategy: Hosts encourage living modestly despite high income projections to aggressively pay down the debt within a year and a half.

Notable Quotes:

• Rachel Cruz [04:05]: "If you throw everything at this debt and you get it paid off in a year and a half and be done..."
• Amy [04:13]: "It sounds a lot because a million dollars is just a big number, but the ratio is the same."

Advice Provided:

• Adopt a conservative lifestyle to focus on debt repayment.
• Resist the temptation to inflate spending in line with future income.
• Utilize the debt snowball method to eliminate debt efficiently.

---

Caller 2: Jared from Cleveland – Multiple Debts and Financial Strain

[11:12] Jared, a bi-vocational pastor, shares his struggles with a hefty mortgage, car payments, and significant credit card debt. Balancing a secular job and ministry work, Jared is overwhelmed by financial obligations despite efforts to budget and consolidate debts.

Key Points:

• Debt Breakdown:
  • Mortgage: $1,700/month
  • Car Loans: $470 and $240/month
  • Credit Card Debt: $25,000 total
• Income:
  • Secular Job: $1,900 bi-weekly
  • Pastor Salary: $1,500/month plus a $1,900 housing allowance
• Additional Expenses: Private school tuition for two children and other monthly bills.

Notable Quotes:

• Rachel Cruz [17:17]: "Do you have a side hustle? All of this is part of financial life..."
• Amy [06:36]: "You're going to be working a crap ton... living like you make $60,000."

Advice Provided:

• Prioritize savings and debt repayment over lifestyle upgrades.
• Implement a strict budget to eliminate unnecessary expenses.
• Focus on paying off debts systematically to achieve financial freedom.

---

Caller 3: Megan from Dallas – Navigating Finances After a Loss

[32:39] Megan recently graduated with her master's degree but faced the tragic loss of her mother. Living with her grieving father, she grapples with financial independence while managing existing debts and limited savings.

Key Points:

• Current Financial Status:
  • Income: $60,000/year
  • Debts: Car payments and credit card debt
  • Savings: $15,000 cash, $27,000 in retirement
• Personal Challenges: Balancing grief with the need for financial independence and budgeting.

Notable Quotes:

• Rachel Cruz [34:10]: "He can't be your responsibility... you can be a great daughter and walk beside him."
• Amy [40:28]: "Financial Peace University helps you get out of debt and build a plan."

Advice Provided:

• Utilize budgeting tools like the EveryDollar app to gain clarity on finances.
• Start tackling debts by prioritizing high-interest accounts.
• Gradually transition to financial independence without rushing, allowing time to heal emotionally.

---

Caller 4: Alexandra – First-Time Homebuyer Facing Job Loss

[43:04] Alexandra and her husband recently purchased their first home but faced immediate financial setbacks when her husband lost his job two weeks after closing. They now struggle with mortgage payments and an additional RV loan.

Key Points:

• Financial Struggles:
  • Mortgage: $1,400/month increased from $2,100 rent
  • RV Loan: $400/month with a $30K note
  • Savings: $1,600
• Pending Job: Husband expecting a job offer with a pay cut to $62K/year

Notable Quotes:

• Amy [46:53]: "Run the numbers with EveryDollar... it will give you a game plan."
• Rachel Cruz [48:43]: "Creating a budget is essential to regain control."

Advice Provided:

• Assess and adjust the budget immediately using budgeting tools.
• Consider selling depreciating assets like the RV to alleviate financial strain.
• Establish an emergency fund to buffer against future uncertainties.

---

Caller 5: Sharon from Springfield – Financial Control in Marriage

[65:06] Sharon expresses concern over her husband's control over their finances, leaving her unaware of their complete financial picture. Despite being the breadwinner, she finds it challenging to manage and budget their joint income effectively.

Key Points:

• Financial Dynamics:
  • Sharon's Income: $105K/year
  • Husband's Income: Approximately $60K/year
  • Limited transparency and access to financial accounts
• Challenges:
  • Husband's insecurity leading to financial withholding
  • Difficulty in initiating budget discussions

Notable Quotes:

• Rachel Cruz [71:03]: "You're not the crazy one. You're protecting yourself."
• Amy [73:21]: "You're not being the bad guy here. He has put you in this situation."

Advice Provided:

• Demand full transparency of all financial accounts and credit reports.
• Set ultimatums for financial cooperation, including joint budgeting and counseling.
• Prioritize personal financial security by establishing separate accounts if necessary.

---

Caller 6: Shay from Chicago – Considering Voluntary Repossession

[79:38] At 25, Shay is contemplating selling her 2021 Buick Encore GX to eliminate a $22K loan. With a solid income of $73K/year but lingering credit card debt, she seeks guidance on responsibly managing and reducing her debt load.

Key Points:

• Current Financial Status:
  • Car Loan: $22,000 at $400/month
  • Credit Card Debt: $9,000
  • Income: $73,000/year
• Motivation: Desire to eliminate debt and reallocate funds toward meaningful expenses.

Notable Quotes:

• Rachel Cruz [82:03]: "You're 25 making 73,000. That's a lot. That's great."
• Amy [80:00]: "I would not give it back to the dealer. I would not do a voluntary repossession."

Advice Provided:

• Avoid voluntary repossession due to its negative impact on credit.
• Explore private sale options to potentially cover or reduce the loan balance.
• Implement the Ramsey Baby Steps to systematically eliminate debt and build savings.

---

Insights and Conclusions

Throughout the episode, hosts Rachel Cruz and Jade Warshaw underscore that income alone does not guarantee financial security. Key takeaways include:

• Budgeting is Crucial: Regardless of income level, maintaining a disciplined budget is essential to prevent debt accumulation.

• Debt Management Strategies: Utilizing methods like the debt snowball can expedite debt repayment and provide psychological victories.

• Transparency in Finances: Especially in relationships, full disclosure and joint budgeting foster financial harmony and prevent hidden debt issues.

• Emergency Funds: Building and maintaining an emergency fund provides a safety net against unforeseen financial challenges.

• Proactive Financial Planning: Planning for future income changes, expenses, and life events ensures sustained financial health.

Notable Conclusion Quotes:

• Rachel Cruz [84:09]: "Financial Peace University helps you get out of debt and build a plan."
• Amy [77:14]: "Math doesn't have emotions. It doesn't care."

The episode serves as a potent reminder that financial discipline and proactive planning are indispensable, regardless of how much one earns. By adhering to proven financial principles, individuals can navigate debt and build lasting wealth.

Transcript

[Rachel Cruz]

Hey, guys. Black Friday week is here with five days of deals starting at just $12. Go to Ramsaysolutions.com store to check them. Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work they love, and create amazing relationships. I am Rachel Cruz hosting this hour with Jade Warshaw and we are here to take your calls. And you can call us at 888-255-225 and we'll be answering your questions on life and money and career relationships. All of it. All of it. So let's get to the phones. This hour we have Amy in Pensacola. Hi, Amy. Welcome to the show.

[Jade Warshaw]

Hi, how are you?

[Rachel Cruz]

We are doing great. How are you?

[Jade Warshaw]

Good.

[Amy]

How can we help?

[Jade Warshaw]

I'm really, really, yeah. Excited to be on the phone. So I have a bunch of questions, but my husband and I are definitely in need to help with overall financial plan. We more than over a million dollar in death.

[Rachel Cruz]

Whoa, what's it in? Yeah, what's. What's the debt in?

[Jade Warshaw]

Well, we went through a really long school life.

[Amy]

Okay.

[Jade Warshaw]

So our student loan was a million when we graduated.

[Amy]

Oh my gosh. Wait, you can't just cruise past that. You got to tell us more.

[Rachel Cruz]

What are your degrees then, Amy?

[Jade Warshaw]

So we are both in dental specialists. So you know, college. Well, we actually didn't have any loans for college. Dental school. We had loans. Specialist residencies. We actually didn't have loans because my husband served in the military. So they pay for that. So just dental. Four years of dental loan. We have a million dollars together.

[Amy]

Okay, but you earn a lot of money, right? I sure hope so.

[Jade Warshaw]

So we now we came down to like 750 also, you know, we're proud of it. Since he's in the military, we don't actually earn that much money. But the good news is he's getting off of military and we're going to start a new job where we should. Our minimum income will be about 600K.

[Amy]

Okay.

[Rachel Cruz]

So wonderful.

[Amy]

That's good. Is this a business that you're opening a practice together? Is that what it is?

[Jade Warshaw]

Actually, no. We. So we wanted to make sure like our life is in a little bit less of a death before we even think about opening our own.

[Amy]

Sure.

[Jade Warshaw]

That will require a lot more capital.

[Amy]

So you just said we, so I didn't know if you were working together or you're just going out and getting separate jobs.

[Jade Warshaw]

No, we are working together in a practice.

[Amy]

Okay.

[Jade Warshaw]

Together. But we don't own them.

[Amy]

And combined you'll be making 650,000.

[Jared]

That will be a minimum.

[Amy]

Yes. When does that start?

[Jade Warshaw]

Summer.

[Rachel Cruz]

Okay, so soon. And these are guaranteed jobs and salary like this is what you're going to make?

[Jade Warshaw]

Yes. So it's a per production, so you know that's going to be a minimum. And if you make more, you know you're going to get more.

[Rachel Cruz]

Well that's the great news of this story, Amy. So for you guys, I mean I would work to live on 70k.

[Amy]

Uh huh.

[Rachel Cruz]

And you throw everything at this debt and you get it paid off in a year and a half and be done and then go right off into the sunset making $600,000 a year debt free.

[Amy]

Like your numbers sound really big, but ratio wise it's the same as the person who calls in and makes $60,000 a year and has $100,000 of debt.

[Rachel Cruz]

Like that's right.

[Amy]

It's, it sounds a lot because a million dollars is just a big number, but the ratio is the same. How are you living right now? Like tell me about your numbers right now. What, what is rent cost? What are you bringing in right now?

[Jade Warshaw]

So that's another question. Thanks for asking because that will be my next question. Because we now technically own a house but not pay off. Okay, so we are planning on. Well in the beginning, before I started listening to you guys show, I wanted to either rent this place and buy another place in our new job will be because we have to move and buy another house. But then I was thinking that our student loan is so high, we decide to sell this house, pay our, you know, all the mortgage.

[Amy]

If you sell it, what will it bring?

[Jade Warshaw]

Doesn't bring much because our financial advisor told us to pay as minimum as possible. So we actually didn't pay that much off.

[Amy]

Okay.

[Jade Warshaw]

We bought this not that long ago, actually not even three years ago. So we are trying to sell this and then another house.

[Amy]

Amy, talking real numbers because right now you're saying like it's all kind of up here. I want to know real numbers. If you buy, if, if you're moving, give us more details. If you move, where are you moving from and then where are you moving to? If you sell the house, how much will it bring and what do you plan on doing with that money? Like give us a few more details so we can really dig in with you.

[Jade Warshaw]

So we have a mortgage to left for about 370k.

[Amy]

Okay, so you owe 370. If you sell it, how much will you take home do you think? After the sale, maybe 40k and that's after fees and whatnot from the realtor and everything like that. Okay, so the 40K, you're thinking you're going to roll that into a new mortgage when you move this summer for this job? Is that what you're thinking?

[Jade Warshaw]

We were thinking that, but now we're thinking that maybe we should just rent.

[Amy]

I'm thinking that too.

[Jade Warshaw]

Yep.

[Rachel Cruz]

Yep.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And that's $40,000 more to the student loan.

[Amy]

Yeah.

[Rachel Cruz]

Makes that make some progress. Yeah. So, Amy, here's going to be your. Here's going to be your struggle. It's not going to be income. And usually when we're talking to people like this, we're like, you got to get side hustles. All this, all this. And honestly, with what you guys have, you can have this paid off in a year and a half.

[Amy]

Yep.

[Rachel Cruz]

But your problem is going to be, Amy, that you guys are going to. If, if me and Jade were in this position, I would just tell you, like both of us with our spouses, our decisions would probably be very similar. We're getting a one bedroom apartment. We're living as cheap as possible for two years. And Amy, the biggest struggle that's going to happen is you're going to get into this new job, into this dental world where people are making insane money, which is great, and they should. They do great work, but they're going to be living insane lives. I mean, to make $600,000 a year.

[Amy]

The trip season.

[Rachel Cruz]

Yeah, the trip, the trips, the cars, the out to eat, the parties, the gay. I mean, everything you could imagine, Amy, is the world you're about to step into and you're not going to be a part of it. And you're going to say for a year and a half, 18 months, 24 months, we are not going to live like we make $60,000, 600,000. We're going to live like we make 60,000. And I'm telling you, the faster that you can just stay in this mentality and get through this, Amy, the unbelievably better part, this is going to be. Not only are you going to appreciate that 600,000 even more.

[Amy]

Right.

[Rachel Cruz]

But there's. You're done with this mess. I mean, yes, your shovel is big and $1 million is big, but it's a million dollars, I think, to anyone.

[Amy]

Right.

[Rachel Cruz]

It's a gasp. Like it's a lot. And if you just act normal in this, you're going to keep this around for five, six years and, oh man, you'll make the payments and you'll figure it out, but it's just going to be floating where we want more intensity and be done. And then you can go get a bad. A home. I mean, so much like, here's the upside much with this.

[Amy]

The upside is you're moving somewhere where you're brand new and you don't know anyone and you don't have any heirs to keep up. Like, do you know what I'm saying? It's harder. If you had been, if you had called us and it was five years later and you were in this job making 650, you had the house, you had the cars, you were used to this lifestyle and you had to cut back. It'd be difficult. But you haven't even got into it yet. So you. And you don't know anybody yet. There's no standard to keep up. Like, you can fly under the radar, do your thing, and then after a year and a half, you can pop out like, what's good? Let's take a trip. Yes, let's spend some money.

[Rachel Cruz]

So, Amy, the faster you get rid of this, I'm telling you, the faster that burden lifts. And you guys, I'm so glad you found us. I know you're kind of. You're a new listener, but I'm telling you, this is the proven plan. So do it. Do it. Well, we're excited for you, Amy. Congrats on the big education and the big salary, but make some right decisions here. This is the Ramsey Show.

[Unknown]

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[Rachel Cruz]

Welcome back to the Ramsey Show. I'm Rachel Cruz, hosting with Jade Warshaw. And we are answering your question questions today. And if you are new to the show, love the show, listen to the show. An old listener of the show, any of you, it would be wonderful for you to share it with your friends and your family. This is one of the ways that we can spread the word. And honestly, word of mouth it is. It's one of the best marketing tools that we have for you guys, listening and watching, sharing it with the people that you know and that you love. Because our goal for people is to get control of their money. We want everyone to have a plan from point A to point B that is effective and helps them when it comes to their money to get control and to build wealth, to change their family tree and have peace, ultimately, is what we're shooting for when it comes to the subject that is not peaceful for a lot of people. So, yeah, leave us a review. Share the show. We so, so appreciate you guys listening and watching. All right, up next, we have Jared in Cleveland. Hey, Jared. Welcome to the show.

[Unknown]

Hey, Rachel. Hi, Jade. Thank you so much for having me.

[Rachel Cruz]

Absolutely. How can we help?

[Unknown]

Well, I am in. Well, jam doesn't begin to explain it, I guess. I'm a bi vocational pastor. I work 60 hours a week for my secular job and about 30 hours a week in the ministry. I'm married. I have two wonderful boys. Love my church because I love my God. You know, God's been good to me, but I've got back against the wall. My back's into the wall if that's a. I've got a mortgage that's out of hand. I've got two car payments that are out of hand. Kind of got dealt a bad hand when it came to those particular debts. Got lied to in both of them and ended up costing me a lot more and stuck me where I kind of didn't have a choice. But I'm looking at a mortgage where I'm paying $1,700 a month. I'm $18,000 in negative equity in my car, and that's. And I've maxed out my credit. I've got nowhere to go. And I could really use some sound godly advice from you ladies.

[Rachel Cruz]

Oh, Jared, I'm so sorry.

[Amy]

Tough.

[Rachel Cruz]

I know it's. It's really. It's stressful. And especially when you feel like you're trying to do the right thing and it's not gaining traction, then that is difficult. But. Yep. Hopefully, hopefully we can help here. Okay, so what do you do for your. Your vocational job that you Said so.

[Unknown]

I'm an on call supervisor and what I do is I take care of people with developmental disabilities.

[Rachel Cruz]

Okay, and how much do you make in that job?

[Unknown]

My, my take home is 1900 and it's bi weekly.

[Amy]

Okay, so 1900 every two weeks.

[Jade Warshaw]

Correct.

[Rachel Cruz]

Okay, so how much do you make as a pastor? What does that bring in?

[Unknown]

My salary is 1500amonth, and then I have housing allowance and stuff like that too. I don't. I don't know if that figures into this or not, though.

[Rachel Cruz]

Yeah, it does. So what's your housing allowance? Because is that going towards your mortgage?

[Unknown]

It is, yes. And it's 1900.

[Amy]

Okay, good.

[Rachel Cruz]

So is your housing and allowance covering your mortgage then? If Your mortgage is 1,700, yes, it does cover that.

[Unknown]

And it usually covers most of the electric bill as well.

[Rachel Cruz]

Okay. Okay. Yep. That's big. Okay. And then how much do you owe on the cars?

[Unknown]

For mine, I owe just under 25,000. Like 24,7.

[Rachel Cruz]

Okay.

[Unknown]

And then for the other one, I owe 8,900.

[Rachel Cruz]

Okay. And how much in credit card debt?

[Unknown]

12,500 for the one. And then the other ones is a total of 13,000.

[Rachel Cruz]

Okay.

[Amy]

And does your wife work outside the home at all? She does.

[Unknown]

She works from home, yeah.

[Amy]

Okay, what does she earn each month bring home?

[Unknown]

She's about. It depends on the hour she's able to get, but I'd say she's about 800amonth or so somewhere in there.

[Rachel Cruz]

What does she do?

[Unknown]

She does medical billing.

[Rachel Cruz]

Okay.

[Amy]

Okay, so I've got you at $8,000 a month between the two of you, obviously 1700 of that is going to the mortgage. Okay. So help me, when I look at this, I'm like, okay, mortgage is covered. There's some debt here.

[Rachel Cruz]

It's like 6,500 left after mortgage. So where's it going?

[Amy]

Yeah, Are you guys on a budget?

[Unknown]

Yes, we are on a budget. Where we're at now? 2. So the credit card debt that I gave you, one of them was the 12, 5. The other two are through. I'm doing a debt consolidation because they were maxed out and I couldn't afford the minimum payments, so I moved that into one payment. And then also I'm trying to. I'm nervous. I'm nervous, to be honest.

[Rachel Cruz]

You're fine, you're fine. We have time, we have time. You're good.

[Unknown]

And then in addition to that, I pay for my son. He goes to a private Christian school.

[Amy]

That might be an area. How old are the boys?

[Unknown]

My oldest is 7. My youngest is 4.

[Amy]

So 7 and 4. How much is tuition for the private school?

[Unknown]

It is 3700, I want to say, for the year.

[Amy]

Okay. What else? So you're paying 308 bucks a month for.

[Rachel Cruz]

Yeah. I'm curious, Jared, where the $6,500 is going, though? Because how much Payments for your car. How much are they for your car?

[Unknown]

My. My car is 470. No, 480amonth. And then my. I pay for my wife's car as.

[Rachel Cruz]

Well, which is how much?

[Unknown]

240.

[Amy]

Okay, so I've still got you at 5280. Keep going.

[Unknown]

Okay, then there was student loans involved in that. And what's that? No more. Because the president, he just took those.

[Amy]

Well, let's pretend. Let's just pretend. What would. The minimum payment. What was it?

[Unknown]

200.

[Amy]

Okay. Minus 200. So now we're at 5080. Keep going. I'm just helping you work through this. It's not to try to call you out.

[Unknown]

No, not at all. I appreciate it. Let me think. Then. Cell phone bills, 190amonth. And then I've got car insurance, which is up at 180amonth.

[Amy]

Okay.

[Unknown]

Okay. Then of course, you know, we're talking about tithe. So 10% of the amount that I gave you, there is.

[Amy]

800.

[Jade Warshaw]

Yeah.

[Amy]

Okay, 3900.

[Rachel Cruz]

What's been on these credit cards, Jared? What are you putting on the. For $13,000 and $12,000?

[Unknown]

Well, a lot of that was just trying to make the ends meet, not having enough to make the bills. I just. Recently, my income is higher the last couple months because I started asking four more hours at work.

[Amy]

Okay, so that's new.

[Unknown]

It was. It was below that.

[Rachel Cruz]

Okay. Okay. Okay. So, Jared, I mean, just looking at these numbers, there's not like a. Oh, I forgot the $3,000 bill here, whatever that.

[Amy]

Right.

[Rachel Cruz]

Like there's a month there. There. There's not a big gaping hole. I'm just. I. I may just call it out. Jared, I just feel like you guys have been sloppy. Would you agree?

[Unknown]

Well, I wouldn't disagree.

[Rachel Cruz]

And, Jared, and I'm going to say this because you mentioned this, and as believers in this room, I think we're spiritually somewhat consistent. Scripture has nothing good to say about debt. Nothing. Every time debt is mentioned, it is in a negative fashion. Now, it's not a sin. We'll still go to heaven. It's fine if you still got your credit card debt. Like, okay, everything's fine in that regard. But the Wisdom that comes from. Every time it is spoken, it is in a negative fashion. And so in that sense, I would say let's. Let's lean on the spiritual conviction that we all believe here from something that is consistent and that is eliminating debt. So you've been running to something that is getting you deeper and deeper in a hole, right? And so I think for you guys, if you tighten this up, Jared, I'm encouraged by it because I think your numbers are there. I really do. And so I want you to hang on the line because Christian's going to pick up and we're going to give you every dollar premium and I want you to cut up these credit cards. And I want this to be a moment where a line is drawn for you all and you're going to say, no more. We are not running to these credit cards to make minimum payments and make. Make ends meet because you don't need to. You have thousands of dollars and you have a really blessed situation of. Even as this, as in this pastoral role to have the mortgage paid for with the housing allowance. I'm like, you guys are in a really great position. You're going to be working a crap ton. You're probably exhausted, Jared, working 90 hours a week. But for a period of time, I mean, truly, if you guys, if you guys threw, I mean, five grand at some of this, I'm like, you could be knocking this stuff out, I mean, month after month. And so I would, I would get on a really tight budget that there is nothing, no expenses going out that are not necessities, Jared. And you guys can do this. I really believe in you. I think you can. This just has to be a turning point from here on out. This is the Ramsey Show.

[Unknown]

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[Amy]

You're listening to the Ramsey Show. I am your host, Ramsey personality J. Warshaw. And I am joined by my co host today, host of the Rachel Cruze Show. I've got Rachel Cruz with me to my right. And guys, we're taking calls all afternoon about your life, what's going on in your financial situation. Maybe you have questions about things you've read on the Internet regarding finance or things you've seen on the news or just whatever's going on in your life, give us a call. The number is triple 882-55-5225. And on this show, man, we're always talking about things that directly affect you and we're always filtering it through how we teach money here, which is a series of baby steps. You might hear us talk about baby step one or baby step six. You might hear us talk about things like financial Peace University. You might hear us use lingo like gazelle intensity or certain things. And you're like, what the heck are they talking about? So here's the thing. If you're a new listener and you want to dive deeper into the Ramsey baby steps, we want you to go to Ramsaysolutions.com and click the get started button. Okay? And what's going to happen here is we're going to help you figure out your best next step for your financial journey based on exactly where you're at today. You're going to get some education, some knowledge. We're going to put you on the right track. So Remember, go to ramseysolutions.com and click get started. All right, let's go straight to the phone lines. We've got Mark on the line from Los Angeles, California. Hey, Mark, what's going on? I'm headed out your way this evening, Mark, to Los Angeles.

[Jared]

Awesome. Awesome. Thanks for taking my phone call. Jade and Rachel. Appreciate it.

[Amy]

You're welcome. What's going on?

[Jared]

Cloudy out here today.

[Amy]

Oh, yeah. Well, I hope the weather holds for me.

[Jared]

Yes, I know I don't think you'll get the sunshine this week, but appreciate it. Hey, thanks for taking my phone call. I got a question for you. I'm looking to purchase a third vehicle, a fun vehicle. And it's approximately $55,000 and I'm debt free other than our house and I'd be paying cash for it and I really want it. It's a pretty rare car. But I think the thing is, in my heart I'm a really good saver and I'm a really good giver, but I don't really spend a whole lot of money. And so I'm just kind of torn on it. And in my mind I'm like, okay, this would be great. A lot of great family memories of my wife and three kids.

[Amy]

You're already emotionally attached to it, I see.

[Jared]

I know, I know. It is.

[Rachel Cruz]

Mark, how much do you make a year?

[Jared]

And it's usually around 225. This year is going to probably be around 350.

[Rachel Cruz]

350.

[Amy]

Very good. Good income. And so you said this is going to be your third vehicle.

[Jared]

It would be a third vehicle. Yeah. Really just fun toy. Yeah.

[Amy]

How much, how much do you already have tied up in your other two vehicles?

[Jared]

Value wise, my wife's car is worth about 45,000 and my car is worth about 50. 15,000 daily drivers.

[Rachel Cruz]

Yeah, 15.

[Jared]

So I don't know. Yeah, probably 60,000. I have total tied up in cars right now.

[Rachel Cruz]

Okay. Yeah, because kind of our rule of thumb, Mark, is that we don't want more than 50% of your take home pay for the year, annual take home pay to be more to have, you know, motors and wheels. So you want at least half of that. But you make, I mean you make great money. So you're going to be under that just barely. Yeah, just barely under that. Under that rule of thumb, if you will. Because we just don't want so much tight end of your net worth being in, you know, things that have wheels and motors because those tend to go down in value so quickly. So. But I mean technically, yeah, you're, you're in that space. Are you guys, you guys have good, other savings? Do you have an emergency fund and everything?

[Jared]

Yeah, I have, I have about 200,000 cash on hand.

[Rachel Cruz]

Okay, very good.

[Amy]

Why so much cash on hand?

[Jared]

Yeah, you know, I had, had some investments and I, we just, we've done really well this year and so we've had a lot of cash come in and so I just, I haven't invested it other than just small stuff like you know, 3 to 5% interest in the market and stuff like that. But you know, I've got, I have other, other retirement funds already set up as well. So we're in good shape. It's just, you know, it's one of those things I, like I said I'm such a saver and I'm such a giver. Just. But like, spending that kind of money, it actually has been worried about it. So I'm like, well, I'll just give a. Give you guys a call because I love listening to you guys show and you guys have such great advice. And, you know, I just don't want to get something and have that buyer's remorse or, you know, everything's so inflated. Housing market, car market is so inflated.

[Amy]

It is. But I think you're doing great. And I think that there's things that are part of. It's just part of financial life and inflation is part of life. And I think that when you're in a situation like yours where you've done really well with your money, you've been smart with your money, you've got to live life while life is here to live. You know what I'm saying?

[Rachel Cruz]

That's right. Absolutely.

[Amy]

And, you know, I'm guessing our, the, the 55k, is it going to come out of this 200, that's cash that you have sitting, or is it separate even from that?

[Jared]

No, it would.

[Amy]

Okay.

[Jared]

It would, it would come out of that.

[Rachel Cruz]

Yeah.

[Jared]

And then I have about 200,000 in retirement, and then. Yeah, have about 600,000 equity in our house.

[Amy]

Very good.

[Rachel Cruz]

That's great.

[Amy]

And are you contributing 15% or more? You know, are 15% to your retirement currently?

[Jared]

Yes, yes.

[Amy]

Very good. Yes.

[Jared]

I've got. Saving that and then also have a pension system too, that I'm on. So. Cool. Yeah, do it.

[Rachel Cruz]

Mark. Mark. It's a green light from us.

[Amy]

That's fun.

[Unknown]

Yeah.

[Jared]

You think so?

[Jade Warshaw]

Okay.

[Jared]

Yes. One of those things. You know, I've always put family first. And, you know, this is an experience.

[Amy]

For you, though, is what it sounds like, right?

[Rachel Cruz]

It's that and it's all ratios, Mark. I mean, if you called us and you were making, you know, $75,000, you wanted to spend $55,000 and you still had credit card debt and student loans, I mean, it would be a different answer. It's all about where you're at and ratios of your life. And you're in a situation. You've set yourself up so well. So kudos to you for doing, you know, the really hard work of that foundation of saying, hey, we're going to get out of debt and have an emergency fund, have some other savings on hand, we're gonna be doing retirement. I mean, you've done it all so well. You make great money. So it's all around ratios and this is not. Yeah. I mean, you're. You're in that formula. You're in that line. So let me ask this, Mark, because we always. This is what Winston and I say sometimes if we go to buy something that's kind of bigger, and we're like, oh, my gosh. So say you bought this and you had no insurance. It burned to the ground. You never have it.

[Amy]

There you go.

[Rachel Cruz]

Does it make you lose sleep at night? Besides the fact that you loved it and it's gone now, but just financially, does it absolutely put you in a panic?

[Jared]

No, no, no. I.

[Unknown]

We're.

[Jared]

We're in good shape. Like, I don't owe anything except for a house payment. And so we're. We're in good shape.

[Rachel Cruz]

And there you go. I think that's a great emotional.

[Amy]

Well, the. The answer from us is yes. Thank you so much for that call, Mark. Hey, I love getting to say yes.

[Rachel Cruz]

I know.

[Amy]

I think people think we say no all the time.

[Rachel Cruz]

We're always like, no, no. Sacrifice, get out of debt.

[Amy]

Yes.

[Rachel Cruz]

But when you've done it all, it's like, this is. This is the live, like no one else. So later you can live and give like no one else. And I love to say, too, that he's. He's like, I'm such. I'm a saver and I'm a giver, but the spending is always hard, and we get that a lot. That people shifting that. So. So actually enjoying your money, enjoying the money that you've worked for, enjoying the progress that you've made with the money.

[Amy]

You have, like, absolutely.

[Rachel Cruz]

All of that is a reason to celebrate and to enjoy life.

[Amy]

And I love. I want to highlight this because I think sometimes, you know, Rachel, it's intense what we're teaching and preaching over here. It's intense. And I think sometimes people follow that intensity past baby step three, and they don't take those moments to go, okay, like, I paid off my debt, I saved up this money. Like, I can do a little something something for myself. And sometimes people speed right through and they want to pay off their house before they do something like upgrade or buy a car. And I'm like, guys, no, chill out. Like, just cool out for a second and enjoy all this hard work that you've done when it's within reason.

[Rachel Cruz]

That's right.

[Amy]

We laid out the math for him. There's. There's method to the madness. It's not just go, spin, spin, spin. But, man, you gotta learn to enjoy some of this. You've done the Work. And you can give your money, you can save your money, and you get to spend your money. That's a big part.

[Rachel Cruz]

So love it, Mark. So I appreciate. I appreciate the call because that. Because like you said, Jade, it can be. It's a psychological game almost, that once you have sacrificed and saved and put things away and said, no, no, no, saying yes to yourself can be difficult, and it can be hard. So that's why I think looking at the math is so helpful. Because math doesn't have emotion. Like, it doesn't care. But when you see it and you're like, okay, good, that's less than 50% of what we make a year is tied up in, you know, in motors and wheels and all the things. We're in a place that we can do that. Okay, this is smart. This is wise. That's the math. And that's where logic really can come into play. When your emotions are all over the place.

[Amy]

I love that math. Math doesn't have any emotions. I love that. And look, don't let the economy. Don't let what's going on in the world when you've done well, don't let it. Don't let it scare you into not being able to enjoy yourself. Don't let it cripple you with fear. And that goes on each side. You know, whether you're trying to get your money in place while you're trying to do the right thing, it's always the right time to do the right thing. So don't let anything hold you back. Don't let anything scare you. This is life. Life is cyclical. There's ups, there's downs. That's the way the economy goes. Don't let that scare you. I'm proud of Mark. He gets to buy himself a new car. This is the Ramsey Show.

[Unknown]

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[Amy]

Thanks for being with us. You're listening to the Ramsey Show. I'm Jade Warshaw, your co host and I'm here with Rachel Cruz. This is a great time. Hey guys, if you've got calls, we want to take your calls. The number here is, is, 882-55-5225. And let's take a call, Rachel. Let's see what Megan is talking about in Dallas, Texas. What's going on, Megan?

[Jade Warshaw]

Hi, Jade. Hi, Rachel. So I just graduated with my master's in August. However, my mother passed away in June.

[Rachel Cruz]

Oh, I'm so sorry.

[Jade Warshaw]

And yeah, I've been living with time because I had a problem. I've been sober for seven years, so I was like living with them while I was going to school. And now I have my new job and I'm making like $60,000 a year. I have a car payment and I have some credit card debt. I also have $15,000 cash and 27,000 in retirement. The thing is, like, I feel like I'm not really intentional with my money because I still live with my dad, so I still kind of feel like a perpetual 18 year old because I'm like, it's okay. I pay my credit cards off every month, but I use my credit card so much that it's like I don't save any money. So I was thinking, like, I probably ought to just move out to like, get more serious and independent with my money. However, part of me doesn't want to lead him right now because it hasn't even been a year since my mom passed away.

[Rachel Cruz]

What's her passing? Was it sudden, Megan, or was it.

[Jade Warshaw]

So she was like. She was. She was sick since like 2021. She was doing really well. And then she went to the hospital and all this other stuff and she got Covid and then her organs started shutting down.

[Rachel Cruz]

Oh, my gosh.

[Jade Warshaw]

So, yeah, it was like really, really crappy. So it was kind of sudden. Like me and my dad both believed that she would get better. Unfortunately, that's not what God had planned. But like I just don't know because, like, my dad has never lived on his own. He has seven brothers and sisters. He went straight to the army, and then him and my mom got married while they were both in the army. So it's like. It's hard because I don't want to just leave him with no one, you know?

[Amy]

Number one, I'm so sorry. That sounds just unthinkable. It's so tough navigating a loss like that. And, you know, I'm just thinking about. In. In a lot of situations, especially dealing with money, we would tell people not to move quickly, you know, take time to grieve and take time to adjust to this change. And I feel like in the same situation, it applies. I don't feel like you need to be in a rush to do anything. Like you said, it hasn't even been a year. It hasn't been a long span of time. I'm okay with you doing whatever you need to do to process this. If that's staying at home a little bit longer while you're there. I do think it's important that you think about a plan of what's going to happen next.

[Jade Warshaw]

Yeah.

[Amy]

You know, because I, like, I got.

[Jade Warshaw]

The Every Dollar app, and I'm, like, looking at my spending, and I'm like, holy crap, girl. Like, you're nuts with money.

[Rachel Cruz]

No, you're not.

[Jade Warshaw]

I'm not.

[Rachel Cruz]

You're not nuts, Megan. With money. That's that.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Yeah. But you are a daughter who lost her mom, and so that. That brain fog, the processing that that has to go through, what you go through, it's a lot. And so was there probably some spending you did maybe to. To feel better and to feel good and. And, you know, was there a level of that maybe? I'm not sure. Possibly you could say yes or no to that, but I don't want you to sit there and just absolutely wring yourself out on this. I mean, you've gone through a tragedy, and so I think you're starting to kind of come out of it. The way you're talking and you're kind of seeing, okay, I need to kind of get into. I need to get my money under control. I need to start looking to see, okay, how can I be an adult? But yet, here's my grieving dad over here. But I would say with that relationship, too, Megan, you know, we love our parents and honor them, but also, he can't be your responsibility. You. You can't be the thing that saves him, because then that's how you're going to spend your entire life and he has to be able to do that work on his own. And he may, he may grieve and feel lonely and all that. And you can be a great daughter and walk beside him and maybe there's still a season like Jade said, that you don't move out right now. Right. Maybe it's all still feels fresh and you're like, I want to get a few things under my belt and so I'm going to stay here and maybe have a date that you talk to him about to say, hey dad, I'm looking at this and be honest with him and say, dad, I'm nervous to leave. I don't want to leave you. I feel bad leaving you. And you guys talk through that. But also I want you to know, Megan, you know, you, you can't, he can't be your, you can't be his responsibility. He can't be your responsibility. There, there can't be that, that codependence there, there kind of has to be that breaking that. You do have to stand on your own some point. But again, you don't have to rush that. We're not telling you to rush it. But I do want you to think about that you're not a bad daughter or you're not being mean or cruel. If you say, man, I need to get my own apartments.

[Amy]

Yes.

[Rachel Cruz]

And start, you know, really doing, doing my life this way and all of that. That is not negligent or cruel because.

[Amy]

You'Re both going to grieve in different ways.

[Rachel Cruz]

Yes.

[Amy]

You know it. And, and that time process is going to be different for both of you. So you might be at a point where it's like, okay, like I feel like I'm coming out of this fog a little bit. I feel like I'm ready to, you know, go to this next stage. And he might still be feeling like, oh, like I could really use somebody here at the house. But you know, that's when it's going to have be time to have those tough conversations. I do like that you're looking at your money in that you're realizing that something's going to have to change in order for you to stand on your own when that time comes. And I love that you're looking at. Are you using every dollar?

[Jade Warshaw]

Yeah, I like. So I'm 30, you know what I mean? And like I'm still single and I'm like, I wouldn't want to be a 30 year old man still living at home.

[Amy]

Sure.

[Jade Warshaw]

So that's like playing.

[Amy]

Yeah.

[Rachel Cruz]

And I think, you know. Yeah.

[Jade Warshaw]

Like, I'm 30. I don't want to be, like, 40, having my first child.

[Amy]

Right.

[Jade Warshaw]

So let's go. It's like six and one, half a dozen in the other. Because it seems like almost every day for him is a bad day.

[Rachel Cruz]

Yeah. Has he done. Do you guys have a great church, a good pastor or a therapist or any. Anyone speaking into this process of your mom's loss?

[Jade Warshaw]

He. He goes to church every Sunday with my aunt. And then also I got him to go to grief share.

[Amy]

That's great.

[Rachel Cruz]

Good. Good.

[Jade Warshaw]

At a local church. And I'm, like, trying to ease in the counseling thing, like he said. Probably he might ought to.

[Rachel Cruz]

Yeah, yeah, yeah. Because, I mean, the big goal, too. I feel like I sound like Dr. John Deloney a little bit. But. But to become whole people through this journey as well. Megan, right there. There can be that level of healing. And so for you, that may look like the next step is to say, hey, dad, I'm going to sit down. And. And here's the dates, you know, by May of this year. Here's. Here's what my plan is. And I still want to be there for you and still support you where I can. And then, Megan, you know, as you're calling in for this show, specifically with your money, like what Jade was saying. And then you start. You can even start now working the baby steps. You can start now. You have the EveryDollar app. Start looking at your. All your credit card debt listed out, list out the car, keep your retirement, don't cash it out. But you have $15,000 of cash, which is wonderful. Yep. To throw some of that at the debt. Start getting some of these quick wins with your money. And that's also going to breed a level of confidence for you to maybe even say, okay, I can do this and step out and start, you know, living on my own and really taking that turn. Because you can, Megan. You can do this.

[Amy]

You definitely can. And in every dollar, one of my favorite features, Megan, is the financial road map. And you can plug in all your numbers and you can actually start to see the date that you'll be debt free. The date that you'll have, you know, three to six months of savings. And that's something that will build a lot of confidence and help you to see, okay, what would happen if I were to put more on my debt? What would happen if I were to put less on my debt? So you can really customize that timeline so that this can become a real A reality for you moving forward. Yeah.

[Rachel Cruz]

And hang on the line, Megan, because we'll give you and your dad two separate codes to have financial Peace University for a year. Because I would love him to maybe go through it as well on his own. Because like you said, he's never lived on his own. He's always had someone with Talmud. So giving him a little bit of boost in this area of his life. We would love to gift both of you that. So Austin will pick up. That's great. And get both those.

[Amy]

Own your past, change your future.

[Rachel Cruz]

Yes. Yeah. Throw one of those into. Throw two of those in, guys, for both of them. Because we do. We want. We want to see you and your dad do really well out of this really excruciating, terrible loss. I'm so sorry, Megan. I'm glad you called in.

[Amy]

That was a tough call. I appreciate you guys joining us for today. That does it for today's show. Be sure to join us next time. When it comes to changing your money, you can tell me you won't do it, but please don't tell me you can't. This is the Ramsey Show.

[Unknown]

Mortgage rates have dropped. So if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait, more people will be in the market competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn more@churchill mortgage.com churchillmortgage.com this is a.

[Rachel Cruz]

Paid advertisement in MLS ID 1591 nmlsconsumeraccess.org Equal Housing Lender, 1749 Mallory Lane, Suite.

[Unknown]

100, Brentwood, Tennessee, 37027.

[Rachel Cruz]

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 actual amazing relationships. I am Rachel Cruz, hosting this hour with fellow Ramsey personality and great friend Jade Warshaw. And we are taking your calls America. Free call anywhere in the country at Triple 882-55-5225. So give us a call. All right. Up next, we have Alexandra on the line. Hey, Alexandra. Welcome to the show.

[Unknown]

Hi, Rachel and Jade. How are you?

[Rachel Cruz]

We are doing great. Doing great. How can we help?

[Unknown]

Okay, so I'm in a bit of a situation here. So we purchased. Okay. So we closed on our house on the 24th of August.

[Rachel Cruz]

Oh, congratulations.

[Unknown]

Thank you. I don't know how we got it, but we went in with all we had. I'm kind of desperate, just wanting to get out of a $2,100 rent. Yep. And then we're at a fourteen hundred dollar mortgage now. First time homebuyers. We've been together since sixth grade. We're 37 years old. We have two kindergarteners that just started, the twin boys. So this is our situation. We closed, we moved. So we're I think about two hours north from his previous job. And I say previous because two weeks after we closed, he lost his job.

[Rachel Cruz]

Oh man.

[Unknown]

You know, no fault of his own. It was just, you know, a car that was given to him so that he can drive to work. He was doing that, you know, obviously every day. And so now he didn't have a transportation to get there because I need the car to bring the kids to work to school because they just started school this year. So he's, he's unemployed right now. This is my husband. But I'm, I'm, I'm so scared because. And I'm hoping that he can get into something. Right. We were able to make. So we close in August. Our first mortgage payment was on the 1st. We were able to make that. So we sent it out. That's done.

[Amy]

It's fourteen hundred dollars. Right?

[Unknown]

Mm. And so now we're having to pay again. No, on the first. We only have like sixteen hundred dollar in savings. The big thing is if he. So we're, we're hoping he can get into this new job next week. So it's going to be a little bit of a pay cut. So It'll be at 62 a year. He was earning more, closer to 80 a year. But now we're out in the country. Farm life. This is what we wanted, this is what we get. He's going to get paid less.

[Amy]

Sure.

[Unknown]

So he's down at 62.

[Amy]

Can you make, can you pay all the bills with him at 62?

[Unknown]

I think we can because if we were already doing it then and yeah, he was making more but we were spending much more and then now I'm like when I doing that.

[Jade Warshaw]

Yeah.

[Unknown]

You know, so we can, I know we can. But this is the thing. Let me get to it quick. The RV, we have a RV that is 30k a note of 30k on it and the payment is 400 bucks a month. I don't know what to do to it with it because we're just disparaging our land here. And it's a 2017. We got it desperately in 2021 because we were needing to get out of an apartment that we were living in, and the house that we had, you know, we were trying to get into at that time. The sale didn't go through, so. So that I won't have to release, you know, contract. We just went to a campground, and so we got the. We got the rv and then we just kept house searching. We found the house, and then. So here we still have it.

[Rachel Cruz]

What can you. What can you sell it for?

[Unknown]

I don't know, to be honest. I'm sure it's going to be less than what we all.

[Rachel Cruz]

Yeah, yeah, you'll take a hit on.

[Amy]

It, but you're just trying to stop the payments and stop the depreciation from taking.

[Unknown]

Yes, we don't have any late payments on it. We were able to make that last month. But this is the month right now coming up. This one in November is the one that's going to hit us. It's going to. I don't know how we're going to do it.

[Amy]

When will you know if your husband has the job?

[Unknown]

He will find out Monday. And I think. And I want to go with a 90%. They're going to take him on.

[Rachel Cruz]

Yeah.

[Amy]

Okay, good.

[Unknown]

Yeah. And so it's going to be a pay cut, you know. Yeah. So.

[Amy]

So I want you. The first thing I want you doing is you've got a lot going on. And I can tell by the way you're telling the situation, it's like you're just like in this, and you're just keep keeping going. And I want to kind of clear your head a little bit tonight when you get off the phone, you guys sit down. Run. Run the numbers. Use every. Open up every dollar budget. If you don't have it, Austin will get it to you. And I want you to run the numbers for your paycheck and his paycheck at the 62,000. All right? Then I want you to run the numbers just in case he doesn't get this job and go, what do we need coming in the house to make sure we're able to fill. Because once you have those numbers in your head, Alexandra, you're going to feel so much better because at least you'll know what the real numbers are, what the anecdote is, and then you'll be able to make a game plan going forward. What I really want to hone in on, and I think Rachel will do a good job with this, too, is I want you guys. There's a lot of desperate moves going on. Everything is, oh, we got desperate and we had to do this and then we got desperate and we had to do this and we got desperate. And the chain here, the, the pattern that's happened is when you guys get desperate, you do, you make bad choices. And I want that, that's got to stop today. So what that looks like is it in the here and now, making a plan for the here and now. But not only that, but going forward, I want you guys to be on a plan with your money. So you know what your goals are, you know what's going, you know what's coming down the pike and you're in control and you're happening to your life instead of everything around you just happening to you guys and you're reacting and you know, you're on the balls of your feet all the time. That's got to change. And I think that a plan for your money is going to help you. Have you ever heard of Financial Peace University?

[Unknown]

So, no. Just recently I started listening to you guys. I grew up, I want to say, in the ghetto, to be honest, I never had money in my life. My, both my mom and dad just worked, just, yeah. Take care of five of us, you know. So, you know, I just grew up, you know, working and paycheck to paycheck, you know, rent, rent, rent, rent, rent all my life until we were finally able to get this and it was through an fha. That's why I say we got it. Been lucky to get it. But, you know, here we are. We're so happy. We have a nice little house.

[Rachel Cruz]

Sure, sure. But, but also you're so happy, but you're also very stressed. Okay? So what we want you to see is. And Jade's exactly right. Being proactive with your money versus reactive. And you just said it. And I think the way we grow up with money is a huge part of our story. And that's what was modeled for you. But now the beautiful thing is now you get to change that. So, Alexandra, stay on the line. Austin's going to pick up and we're going to give you every dollar premium, which is our budgeting app, that we'll attached to your checking account. It will. And you guys will be able to bring in transactions, you'll be able in real time to be budgeting your expenses. What Jade was saying. And we're going to give you Financial Peace University, which is our nine lesson course. And you and your husband, you guys need to learn how this stuff works. And Alexandra, I'm going to warn you, it's going to feel uncomfortable.

[Amy]

Yeah.

[Rachel Cruz]

You said you're new to all of this. And when you. You have to get to this point and you're there, I feel it in your. In your voice. And why you called is you are not happy with your current situation. What you guys have done that led you up to this point. Yes, he lost his job unbeknownst him. I get it. Stuff has happened. You are not happy with where you are, which means you have to change what you've been doing. And change is hard, Alexandra. It's hard. And so you're going to be doing some painful things that are going to feel uncomfortable because they're new, but they're the right things to be doing. We are the best in the business at getting people in control of their money. So listen to the plan, follow the plan. Don't stray from it. And so looking at your numbers, getting facts on paper is going to give you some breathing room. You're probably going to be selling the rv. You guys may have to take a second job in order to float the bills for. For the next month, which is okay. Hopefully gets his job and you guys are on track. But you guys got to get your craft together, crap together, because you're going to end up in the same place again. But we believe you guys can do it. You can. You can. You got to make the change.

[Unknown]

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Our Black Friday one day sale is here. So now's the time to grab gifts that give hope and give your budget a break. Today only you can snag some of our best selling hardcover books for $11 and audio books for just 5.99 plus select Ramsey merch is on sale for the first time ever. Grab a T shirt or tumbler to show you live the Ramsey way. These deals end today so go to Ramsaysolutions.com store right now. Ramsaysolutions.com store.

[Rachel Cruz]

Today'S question of the day is brought to you by why refi? Why refi Refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment that you can afford with a low fixed interest rate that you couldn't get anywhere else to help stick to your budget and to work with the debt snowball. So go to why refi.comtoday/ramsey. That's the letter Y. Refi r e f y.com Ramsey may not be available in all states. States.

[Amy]

Okay. So today's question comes from Evan in Kansas. He says, my wife and I are debt free except our mortgage, which we owe 120,000 on. My wife recently quit her job to stay at home with our baby and now after all our basic expenses are paid, there's nothing left over. We've been contemplating ways to save and the only area we could really cut is food. We're considering going to some of the many food pantries in our city a few times a month to get the majority of our food. So we can could still have a couple hundred dollars to throw out the mortgage. Is this ethical considering I have a stable job and it's not like we'd go hungry without the food pantry. We agree that once our mortgage is paid, we would donate these food pantry items to give back. Is this the wrong way to become debt free? I'm going to go with yes. I would not do that. I, you know, you said it best, Evan. You said, you know, you've got a stable job and you don't need this. And I think food pantries are really there for people who need it. Like they're in need. Yeah. And there's also the side of this where again, we kind of talked about this earlier in the show, but if you choose the stay at Home route or you, you choose any route that's going to have one of the spouses not working, then you make the, that bed and so you lay in it. And that's not a bad thing. It's just you've both decided, okay, this is going to take down our income significantly and we're okay with that. And then you've decided if this means it's going to take a lot longer to pay off the mortgage, you two decide on that. And I would not.

[Rachel Cruz]

Yeah. Use like community resources basically for. Yeah. That, that are not of need.

[Amy]

Yeah, I wouldn't do it.

[Rachel Cruz]

Yeah, I don't think I would either. I wouldn't do that. So.

[Amy]

And I think he knows that to Jade's.

[Rachel Cruz]

Yeah, he wouldn't probably be asking if he didn't feel great about it. Yeah. Yeah. So I think again it's, it's a, maybe a shift in the budget. Maybe it's waiting a year or two and you'll get a raise and you can use some of that margin because when you get to the point of paying off your house, that's where we always say you can kind of relax off the accelerator and you make decisions then, you know, that may be different than baby steps one through three.

[Amy]

Right. And, and the baby's going to grow up and she might decide when the baby goes to kindergarten, she goes back to work and then you guys are, you know.

[Rachel Cruz]

That's right.

[Amy]

Going forward again.

[Rachel Cruz]

Absolutely. Well, thanks for the question, Evan. All right, next we have Connor in Jackson, Mississippi. Hey Connor, welcome to the show.

[Jared]

Hey guys, thank you for having me on.

[Rachel Cruz]

Absolutely. How can we help?

[Jared]

So I am a 19 year old college student in the Mississippi area. But I'm also a business owner and I'm kind of teetering on. This is my second year of college. I'm at a community college in my local hometown and I'm just trying to figure out if I want to go off and pursue a four year degree from a university or should I stay at home and continue working on my business.

[Rachel Cruz]

What's your business?

[Jared]

So I own a landscape company. It started off as, you know, just a side hustle when I could first start driving. At 16, I just bought a push mower from Home Depot and started mowing yards. Thank you. Over time it just got bigger and bigger. Now we have three full time employees plus myself.

[Rachel Cruz]

How much are you making? How much are you making a month off this?

[Jared]

So it varies obviously. You know, in the winter it doesn't, we don't do as much. But right now we're doing about last, I'll say this. Last month we did 40,000 sales.

[Amy]

What do you take home?

[Jared]

I think I will, I mean, I, I try and spend as much as possible. I try and reinvest as much as possible. Since I'm young, I don't really have any bills. I do live in an apartment. Yeah, but I, I really don't have.

[Amy]

If you, if you did, if you did though, because what you're talking about not going to college at some point, then it's like, okay, well you're gonna get your own place and you're gonna do, you're gonna need income. So if you did draw an income, what do you think it'd be?

[Jared]

If I, if I needed to, I could probably scratch out probably about 60,000 a year right now.

[Amy]

Okay, that's great.

[Rachel Cruz]

So, so the question is, do you go to college or work on the business that's growing? What do you want to do? Connor? Do you, are you enjoying this business? Are you wanting to do this full time? Are you going to go to school? Is your, is your mindset for going to college to help grow the current business or to start something new, get a different degree? Like what would be the four year college goal?

[Jared]

It would probably. So my major right now is just a business administration. It's not in like landscape architecture or anything like that. I'm not necessarily tied down to landscaping, but I do, I do enjoy working with my hands. But what I enjoy more is being a business owner. I've always been an entrepreneur ever since I was young. Between flipping shoes and clothes and buying stuff low and selling it high. Yeah, it's just always, it's in my blood really.

[Amy]

I think that's a great indicator because obviously the college and university route is not for everybody. Growing in your education is for everybody. What I would say is really looking at your five to ten year picture. If you, when you picture yourself in five years, what do you see yourself doing? And when you look back and then when you reverse engineer that, you go, okay, does that require me having a degree? How did I get there? Like really think through that? Because you know, there's the societal timeline of when you're 18, you go to college. But if you're not ready to do that yet and if you can't afford to go there yet.

[Rachel Cruz]

Yeah, well, I mean, because I was going to say, Connor, there's, you know, you go to college to either get some type of degree to get you in a field that you need.

[Amy]

Right.

[Rachel Cruz]

And there still are, are definitely Routes, career routes that require a college degree. And you mentioned like landscape architect. Right. Maybe there's an architectural degree that you need because you want to work for this firm in five years. Like there's a. There's a route, so you're getting somewhere. But I would personally, I would not go and get a business degree and spend 60, 70,000. Because you know what, Connor, I'll be honest. You're learning a heck of a lot more running your own business than you're going to be somebody, some theory sitting.

[Amy]

In business class it's gonna be behind anyway.

[Rachel Cruz]

I mean, honestly, seriously, it's so true. In like the life experience that you have is so much greater than usually what you can learn in a classroom. Not always.

[Amy]

Yeah.

[Rachel Cruz]

But in a business entrepreneurial route. People run and grow businesses all the time without a college degree. And you're getting, you know, a really basic, you know, degree there with your community college, which I think is really smart to do.

[Amy]

I do too.

[Rachel Cruz]

But I mean, if. If your goal is to have this company continue to grow it, I don't play that out. You don't need a college degree to do that. So I would save the investment of what you would pay for college and continue down this route if I were you. But again, if you get into something that's a little bit more specific and tied to some type of licensing or, you know, degree that you need, then maybe you look into it. But for now, Connor, I mean, you're killing it.

[Amy]

Is there anybody that.

[Rachel Cruz]

$40,000 with three employees, I mean, it's pretty impressive.

[Amy]

Do you have a business that's doing what you want to be doing that you're watching?

[Jared]

Yes. So I actually have two mentors. Before I started my own company When I was 15, I worked for one of my good buddies. His dad is. Has been in the landscaping industry for 30 years probably.

[Amy]

Okay.

[Jared]

And he's very large and he did not go to college either. And so he. He is from a server for Jackson. And as Jackson in the metro area grew, he just like his name just spread out everywhere. And he's. He does multi million sales every single year, I believe. Commercial, it's. It's all residential.

[Rachel Cruz]

Yeah.

[Jared]

And so that's kind of what I want to do. And I talk to him very, very often.

[Amy]

Okay, good, good.

[Rachel Cruz]

You know, I hold on the line, Connor, and Christian's gonna pick up and we'll give you a copy of entree leadership because I think there is a. What you're experiencing as a small business. I mean, you're Having to lead people, which is what you really enjoy running that business side. But it can be tricky. And as you continue to grow it, there's going to be, you know, more avenues to go down and it's going to get a little bit more complicated. And then the entrepreneurial side that is so ingrained in you, you obviously have that inside of you, which is just amazing. So we'll send you a copy of Entree Leadership and make sure to check out even the podcast we have a. Yeah. Part of Ramsey is helping small businesses because we believe in them. We think it is the backbone of America, and It's incredible. So, Connor, 19 years old. Guy. Man. Kid. I was gonna call you kid. You're not a kid.

[Amy]

A man.

[Rachel Cruz]

A man. Yeah. But you're doing really great, Connor. So I appreciate the call.

[Unknown]

Good.

[Rachel Cruz]

This is the Ramsey Show.

[Unknown]

This show is sponsored by Better Help. This month is all about gratitude, and most of us have people in our lives who we're grateful for. One of those people, for me, is the great Jean Noel Thompson. He taught me how to be a dad, a husband, a professional, and how to balance caring for a bunch of people all at the same time. We all know of somebody else we can be grateful for, but there's one person that we often don't take time to thank. Ourselves. We don't always acknowledge that we're surviving, that we're moving forward, and that we're working towards a better life and better relationships. And in a world where everything's gone bonkers, it's not always easy. So here's my reminder to thank the people that you love, thank the people in your life, and thank you. Sometimes we need some professional help to talk to somebody trained to help us discover true gratitude for ourselves and others, especially in the holiday season. That's why I recommend BetterHelp. BetterHelp is a hundred percent online therapy, and you can talk with your therapist at any time so it's convenient for your schedule. Just fill out a short online survey to get matched with a licensed therapist. Plus, you can switch therapists at any time for no extra cost. Let the gratitude flow with BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H E L p.com DeLoney hey, guys.

[Amy]

George Camel here. And it's that time of year again. The store shelves are packed with Little Debbie's Christmas trees, matching pajamas for you and your dog, you know who you are, and giant inflatable Santas for the yard. I'm not mad about that. And speaking of inflation, Americans are about to spend close to a trillion dollars this Christmas. And get this, one third of that spending will be swiped on credit cards. Yikes. Now I get it. You want the holidays to feel magical and you want to have a good time. But trust me, there is nothing magical about staring down a mountain of credit card debt come January. So here's the deal. If you don't want Januaryu to hate December, you, I've got a money hack for you. Download the EveryDollar app. It's free to get started, and you could find an extra $400 of margin in your first month of using it. See, with EveryDollar, you'll keep your holiday spending under control. You'll track your expenses, you'll make a plan, you'll stay accountable and maybe even set yourself up with some sweet New Year goals. So skip the post Christmas regret and download EveryDollar for free in the App Store today. Your future self will thank you.

[Rachel Cruz]

Welcome back to the Ramsey Show. I am Rachel Cruz hosting this hour with Jade Warshaw. We're taking your calls at 888-825-5225. Up next, we have Sharon in Springfield. Hi, Sharon. Welcome to the show.

[Jade Warshaw]

Hi. Thanks so much for having me today.

[Rachel Cruz]

Absolutely. How can we help?

[Jade Warshaw]

Well, my husband's been handling our finances for the last. We've been married almost 20 years, and to the point that I really don't know what's going on in our finances largely, I say in a lot of ways, he controls a lot of what we spend and how we spend it. And, you know, we'll have financial discussions and we'll talk about it, but I don't really have a full understanding of our financial picture when we make decisions.

[Rachel Cruz]

Okay.

[Jade Warshaw]

And I can't get him to sit down and make a budget. Now, we've been through the Ramsey programs. I think we've been through them twice. We've even been out of consumer debt in the past. But keeping a consistent budget is a is a problem. I am the breadwinner in the family, and I'm wondering if it's worth just pulling my money out of our joint account and keeping my money separate so that I can at least budget part of what our income is.

[Amy]

Why won't he budget? Like when you say, hey, I want to sit down and do this, what's his reason? Is it he doesn't have time? He doesn't think. It's like, what's his problem?

[Jade Warshaw]

I think a lot of it is Just understanding, like how to plan for little things that come up with the kids, like costumes that the kids need for programs or, you know, posters that they need to, you know, for school presentations, you know, making sure we've got money for those little things. And of course, there's more than just what the kids.

[Amy]

And he doesn't want to do that or you want to do that. And he doesn't think that's necessary to plan for those details.

[Jade Warshaw]

He's hesitant about the zero. Like the. Like getting all of the money and giving it a name. Like, I hear that a lot. Take all the money, give all the money a name, and, you know, like that zero budget.

[Amy]

But it doesn't mean $0 in the account. Maybe that's what's making him nervous.

[Jade Warshaw]

I'm sorry, say that again.

[Amy]

So zero based budget doesn't mean zero dollars in the account. And that might be really clear, like really important to make clear to him. Zero based budget simply means.

[Jade Warshaw]

We've talked about that.

[Amy]

Okay, so he knows that.

[Rachel Cruz]

So at the beginning of this call, Sharon, you mentioned that he is. Is. He's more the one that's controlling all the finances. What does that mean? Does that mean do you have a debit card to your account that you share with him and you go and buy the costumes for the kids? Or how is the money flow happening right now?

[Jade Warshaw]

I do have a debit card. I spend very little of the money out of the account without at least clearing it with him first because I'm so blind to what's there.

[Rachel Cruz]

Why. Why do you feel the need to ask his permission?

[Jade Warshaw]

Because I don't. Because we don't have a budget. So I don't know what money is there and how to use it.

[Amy]

Okay, let's get down to it, because our screen says my husband has been withholding money, has been withholding finances from me for our entire marriage. And that sounds different than what you're saying. So help us understand.

[Jade Warshaw]

Well, yeah, he does withhold all of the information about the. About the account. Yes.

[Amy]

So you're. You don't want to. You ask permission to spend because you have no idea what money's in there. So it's just you're. You don't want to blindly spend with the debit card. Can you not log into the.

[Rachel Cruz]

Do you have login information? Sharon?

[Jade Warshaw]

I don't currently have the login.

[Rachel Cruz]

Have you. Have you asked it for him and he. What does he say?

[Jade Warshaw]

I have asked him for it and I have tried to look at it. Not here recently, but I have tried to look at it and I'm so overwhelmed, like, I don't even know where to start.

[Amy]

So he gave it to you or he didn't give it to you?

[Jade Warshaw]

I, I, he didn't. He logged in himself.

[Amy]

He logged in himself and let you look over his shoulder.

[Rachel Cruz]

Sharon, that makes me nervous. Yeah. I think at this point I would be okay with you having your own account. But hear me say, Sharon, that this, it's going to fix one part of it that you're going to have money to be able to spend, but it's not going to fix your marriage. This is a temporary solution to really dive into the deeper parts. Because, Sharon, what makes me nervous is, and we've, we've seen situations like this that if you don't know where you're, where the money's going, I would, I, I would be, I would be very highly concerned that there's stuff going on that and other parts of your marriage that you have no clue about.

[Amy]

Yeah. You don't know what he's hiding.

[Rachel Cruz]

Do you have, do you, do you feel that?

[Jade Warshaw]

I. Yes. In some ways, yes.

[Amy]

Okay.

[Jade Warshaw]

Yes.

[Rachel Cruz]

Okay. Yeah, I would, I would start laying down an ultimatum with him. And again, this is, and for anyone listening right now, this is regardless of Sharon is the breadwinner or not. Okay? So her making the money, great. But even if Sharon was a stay at home mom, my viewpoint would be the exact same because as a married couple, as, as you guys, you are a team working together and he has control issues and sometimes Sharon, and I'm going to just say this, and you can correct me in, in here, but sometimes it puts you in a dangerous situation with a lot of abusive husbands, they use a level of power and control that you can't even go to the grocery store. Has there been abuse in your, in your marriage in the past 20 years.

[Jade Warshaw]

Physical views? No.

[Amy]

Okay.

[Jade Warshaw]

Never.

[Rachel Cruz]

Do you feel like, do you feel in danger? Like, do you, do you feel like there's danger in your home?

[Jade Warshaw]

No, I feel like my husband is very insecure and so he's trying to keep hold of the money so that I, I can't leave. I know that sounds terrible.

[Rachel Cruz]

No, it doesn't. No, that's the truth.

[Amy]

That's very real.

[Rachel Cruz]

What's going on? Yeah. Do you guys have kids?

[Jade Warshaw]

We do. We've got two kids.

[Rachel Cruz]

How old are they?

[Jade Warshaw]

Almost nine and 13. They're both about to have birthdays.

[Rachel Cruz]

Okay. Yeah. I would, I would have an ultimatum conversation. And it is. You're going to give me all this login information. Yeah, And I. I want to see everything that's been going on. Any bills. Do you know how many credit cards he has?

[Jade Warshaw]

I believe we've just got one active credit card.

[Rachel Cruz]

I would ask him to pull his.

[Amy]

Credit report and pull yours.

[Rachel Cruz]

I want to see both of your credit reports. I want the login information to all of our accounts, including retirement, including checking, including savings, any of those accounts. I want the login information and I want them tonight. I want them tonight. Because if not, tomorrow morning I'm going to be at the bank at 9am and I'm opening up my own account. Because, Sharon, he has put you in. He has done this. You're not the crazy one. He has put you in this situation. So you're not being the bad guy here. You're protecting yourself.

[Amy]

So important. And if you ask him, hey, because of the state of our marriage, we're going to go to counseling. What. What would he say to that? If you said, enough is enough, we need to talk with someone, would he go or would he fight that he.

[Jade Warshaw]

Would tell me we couldn't afford it.

[Amy]

Okay.

[Rachel Cruz]

So how much do you make a year, Sharon? How much are you bringing in?

[Jade Warshaw]

I know what my salary is. I make 105.

[Amy]

Okay.

[Jade Warshaw]

I don't know what my actual take home would be. He's handled our taxes.

[Amy]

What does he bring home?

[Jade Warshaw]

I don't know exactly. I think it's around 60.

[Amy]

Okay. Yeah. Those are the two ultimatums. Counseling and you're. And he's. He's changing by morning. Or. Or like Rachel said, you're going out and opening an account. And I just want you to know, like, you're doing well. Like for yourself, you're doing well. And you don't have to stay in a situation where someone is abusing you financially. And I'm just going to put it at that.

[Jade Warshaw]

Hard to hear. It's hard to hear.

[Amy]

Yeah, I know.

[Rachel Cruz]

Yeah. Sharon, we want what. What we see so much is money issues are the symptom of a lot of things going on. And so the issue of you not knowing numbers and not having the accessibility to see what's going on financially in your home is a symptom of having a controlling husband. And there's only so much you can do. You can't change him. But what you can do is protect yourself. And if you stay on the line, Christian's going to pick up and I want to get you with one of our certified counselors. Guess just spending seven minutes with you on a radio call, I feel like is it doesn't do it justice. I want someone walking with you, Sharon, in this because this is really important. This is really important. And I pray your marriage is healed in this process. It's going to be a really hard patch, but I pray redemption of that. I really do. I pray that you both come to the other side and are redeemed in this. But if not, I want you to protect yourself. This is the Ramsey Show.

[Unknown]

Hey guys, Dave Ramsey here and I got a big announcement. I'm coming to a city near you live on the Money and relationships tour with Dr. John DeLoney. This is the most interactive event we've ever done. You get to decide what we talk about. You do not want to miss this. We'll be coming to Louisville, Durham, Atlanta, Phoenix, Fort Worth and Kansas City in April and May of 2025. Get your tickets and more [e-mail] tour.

[Rachel Cruz]

So one of the expenses that is hard to face as adults, but it's true, there's a couple of them, but one of them is insurance. And in recent years or recent months, I mean, I guess close to 18 months now, they just seem to keep going up, up, up. Home, auto, I mean, it's just, it continues to rise. And according to Quadrant Information Services, home insurance rates are about 23% higher than they were last year. Car Insurance is up 39% compared to December of 2019.

[Amy]

Yeah, it's, it's a lot and, and the factors that are playing into it, it's interesting. So even if you look at like car insurance, I mean, you do have to think about where you live in the United States is climate issue or do you live in a place where there's tornadoes and so there's hailstorms and it damages your vehicle? You know, it could be something like, I mean, wow, I just had a completely blank my brain out there.

[Rachel Cruz]

No, but I mean, but yeah, you think about whether it's got tornadoes, rain, hurricane, anything that can be damaged in your vehicle.

[Amy]

Climate's a thing. And then you think about models, right? We're doing a lot more electric vehicles. There's more technology inside of them. And so there's that part of it. And so by and large, we're seeing an increased amount of car accidents, which is interesting.

[Rachel Cruz]

Okay, so there's.

[Amy]

That's playing into it. Some people would still say supply chain, although part of me is like, I feel like that's, it's pretty much caught up.

[Rachel Cruz]

I feel like. Do you remember though, in that, in that height of COVID you would drive by a car lot and there would be, like, no cars. It was so eerie. And now. Now they're pretty full. I would say the car lots are. Or there might be some cars still on back order, But I think for the most part, you can. Yeah, you can get. If you need it.

[Amy]

And so, you know, a lot of people are probably like, well, what can we do about it? And this right in here, Rachel, is where what we teach really does play in. Because if you do buy a car in cash, you run the. If you buy it in cash, it's used, then you are qualifying yourself for a lower rate. And so that right there is a good motivation. Motivation. Obviously, the car model that you choose still plays a part in it. How old you are still plays a part in, like. So all of that plays a part. So there are some ways to get around this. This. But even when you do all those things correctly, there is still the idea it is getting higher. And that just. I mean, the truth is that that just sucks.

[Rachel Cruz]

Yeah. And it's one of those expenses, too, that you're like, I can't do anything about it. Right. Like, when your property tax goes. I mean, whatever it is, you're just like, oh, my gosh. I just feel. You feel stuck. You feel trapped because you have to have it.

[Amy]

Yeah.

[Rachel Cruz]

But yet it's one of those things that just continues to rise.

[Amy]

I mean, you could raise your deductible. That's something that you could do. You know, there's another thing about. If you buy your car in cash and you have enough money saved up that if something were to happen to that car, you could replace it in cash, then you could drop off, like, comprehensive insurance because you're like, hey, if something happens national, like natural disaster, something. That's crazy. I have the cash that I could.

[Rachel Cruz]

Actually repair it if I need to.

[Amy]

Yeah.

[Rachel Cruz]

Yeah.

[Amy]

So there's things that you could do to save on it, but there's just a big part of this that it is.

[Rachel Cruz]

You know, it's frustrating. Yeah, for sure. Yeah. So there's other things that you can do, whether it's look for discounts. You can even bundle policies. Sometimes you'll get a better deal.

[Amy]

Yeah.

[Rachel Cruz]

That way. But I would again, shop rates because sometimes the bundles, it really is helpful. And sometimes if you're shopping from just, like, one carrier and you're not comparing prices.

[Amy]

Yeah.

[Rachel Cruz]

You may not be getting the best price. So make sure to do your research there.

[Amy]

And I mean, the same thing's happening also with home insurance. We're Seeing certain states are not willing to cover things that they once did. And again, some of this is linked to climate, some of it's linked to natural disasters, that sort of thing. And I mean, we had a call the other day where a lady called in, she said, I'm being dropped from my insurance because my state has decided that they don't cover you if you have a flat roof. And it's like, okay, great, you know, and so all of this, at the very least, it really ties in what we teach and trying to put yourself in a position where you can have as much peace as possible. So if these things do crop up, it's not a disaster. It's like, okay, this is very inconvenient because I've set myself up, I can deal with it. It. And so that's how this works. If you want to work with an independent insurance agent, you could contact a Ramsey trusted insurance pro. The good thing about our Ramsey trusted insurance pros is they are going to advise you and help you do things the way we teach. And so that's what you're looking for. They're not tied to any one carrier and they'll put pull quotes from all companies to help you pick the best deal. So you can go to Ramsey Solutions.com bundle to get connected and to start saving money on your insurance because it.

[Rachel Cruz]

Is a part of the budget. It's just part of the life.

[Amy]

Part of the life, yes.

[Rachel Cruz]

All right, up next we have is it Shay in Chicago. Hey, welcome to the show.

[Jade Warshaw]

Hi. Thank you so much for having me.

[Rachel Cruz]

Absolutely.

[Jade Warshaw]

I want to make this quick. I'm thinking of doing a voluntary repossession of my car and I'm just wondering if that's a good idea. Well, I'm going to call it. Well, let me rephrase that. I call it a voluntary repossession. But I'm really trying to get rid of some debt. I'm tired of paying a car note. I thought that was the right idea.

[Amy]

Yes. But can sell. Can we sell it?

[Jade Warshaw]

That's my goal. I'm hoping to try to sell it to the dealership and I'm assuming, of.

[Amy]

Course, can we sell it private sale?

[Jade Warshaw]

Because I currently pay on it, so I'm not sure if I guess.

[Amy]

Okay, so here's what I would do. I would not give it back to the dealer. I would not do a voluntary repossession. Even though that's not what you meant, I would never do that because that's going to destroy your credit and just be heartache. And I wouldn't sell it back to the dealer because they're not going to give you the best price for the vehicle. If I were you. What kind of vehicle is it?

[Jade Warshaw]

It is a Buick Encore GX.

[Amy]

Okay. What year?

[Jade Warshaw]

2021.

[Amy]

Okay. I'd get on Kelly Blue Book today after you get off this call, and I'd see how much can I get for this private sale. What do you owe on it?

[Jade Warshaw]

22,000.

[Amy]

Okay. And just your best guess, if you're like, hey, I have done a little bit of research. What do you think you could get for it?

[Jade Warshaw]

I'm hoping to get at least 20,000.

[Amy]

Okay. So if you thought that giving it back to the dealership would give you 20, then I bet blue booking it, you might be able to break even on this. Just based off of what you've said.

[Rachel Cruz]

Yes. Shay, what's causing you to. To get rid of it? Is it just because the payment is so high?

[Jade Warshaw]

Yes. And honestly, I'm. I'm just trying to get out of debt. I want to be able to pay off my mom and I just bought a. A family dupe. So I want to put my money into paying this off. Not a car note.

[Rachel Cruz]

Not a car. Yeah. Do you have any other debt?

[Jade Warshaw]

Yes, I do have credit card debt. $9,000.

[Rachel Cruz]

Okay.

[Amy]

Anything else? Else?

[Rachel Cruz]

No. How much do you make a year?

[Jade Warshaw]

I make $73,000 a year.

[Rachel Cruz]

That's good for you. That's so great. Okay. What's caused you to just up and say, I got how I want to get out of debt. I don't want to do this anymore.

[Jade Warshaw]

I'm just tired of living the life that I've been living. I don't feel like I'm living like a 25 year old. You know, I'm making okay money and I'm not seeing the benefits from it.

[Amy]

Yeah, for sure.

[Rachel Cruz]

Well done. I mean, that's a. That's a good. Why we usually find, Shay, people that start saying, saying, gosh, something's got to change. A lot of it comes like that to say, I work hard and I don't feel like I have anything to show for it. It's just this feeling of, I mean, there's nothing and I'm. And Yeah, and you're 25 making 73,000. That's a lot. That's great.

[Amy]

Where'd the credit card debt come from? Because you've got a good income.

[Jade Warshaw]

Honestly, poor decisions. And then also before I got this car, I had a card that was giving me trouble. So I was putting some Money into it to put it on my credit card trying to get it fixed and it honestly still ended up going out on me.

[Rachel Cruz]

So.

[Amy]

See, I love this car. I love when people stop and realize that they have a choice. Like you don't have to keep going the way you've been going. You have a, you can opt out of that lifestyle and you can go. You know what? Yeah. I want to do better than this. I want to feel like I'm making an impact. I want to feel like my income matters. I don't want to keep living like this. So Bravo.

[Rachel Cruz]

I think so. Great. Shay, have you been, have you plugged into the Ramsey baby steps at all?

[Jade Warshaw]

No, I have not.

[Rachel Cruz]

Okay. So I would, I would encourage you to. Yeah. Dive into some of the stuff. We'll have Christian pick up and we'll, we'll give you Financial Peace University, which is our, our nine week course that we always say every high schooler should have taken. But at 25, if you can get this Shay, because there's a process, I, because your emotions there, the decision in Shay has been made that I don't want to live like this anymore. So now the best way to be a effective of this and to actually see a lot of impact and is to have a step by step process of what you do. So we have what's called the Ramsey baby steps, which the first thing you do is going to get a thousand dollar emergency fund. The second thing you're going to do is pay off all of your debt, smallest to largest. So it actually be you, you getting rid of this car, which is great, and then knocking out the credit card. So if you have multiple credit cards, write each of those out separately, smallest amount to largest amount regardless of the interest rate, rates, pay minimum payments on everything and pay off that smallest credit card first and work your way up. I would be getting a side hustle. I mean, I would do anything I could to knock this out. And again, you make some great money. So even limiting your lifestyle, living on a budget, doing a couple of those things is going to help you. And then your next goal, Shay, will be to get a fully funded emergency fund of three to six months of expenses saved in the bank.

[Jade Warshaw]

Okay.

[Rachel Cruz]

And what, I mean, could you. How would that feel right now if you had no debt and you had five months of expenses saved in the bank? How would that feel?

[Jade Warshaw]

Amazing.

[Rachel Cruz]

Amazing. So good. Okay, stay on the line. Christian will pick up and we'll give you some stuff to help you on your journey. I'm so glad that you that you called in.

[Amy]

I know.

[Rachel Cruz]

So great. Okay, those of you that are watching on YouTube or listening on podcast, make sure to download the Ramsey Network app. We'll have the third hour there. If you're listening on radio, keep listening. And we will be here in the next hour. Thanks to all the guys in the booth. Thank you, Jade, for a great hour, and thank you, America. This is the Ramsey Show.

[Amy]

Hey, you're still here.

[Rachel Cruz]

What are you doing?

[Amy]

You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you gotta do to finish the episode is search Ramsey Network in the app store, Google Play store, or just click the link in the show notes to download the app for free. Yep, you heard me right. For free. Then right there on the home screen screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.