Facts Are Your Friends...Not Feelings

Summary

The Ramsey Show – "Facts Are Your Friends...Not Feelings"

Date: August 11, 2026
Hosts: Dave Ramsey & Jade Warshaw (with Ashley, Rachel Cruze: select segments)
Theme:
This episode offers practical, tough-love financial advice, focused on facing facts and using rational planning—not emotions—when making money decisions. Dave, Jade, and the team field listener questions ranging from getting out of debt and managing windfalls to handling job loss and major life pivots, all while reinforcing Ramsey's proven baby steps and the mantra: "Facts are your friends, not feelings."

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Main Topics & Key Insights

1. Facing Debt & Taking Action

Caller: Nick from Philadelphia ([00:46]–[09:02])

• Situation:
  • Sanitation worker ($75K), wife ($20–25K), $41K in personal/car/credit debt
  • Living paycheck to paycheck, overwhelmed by debt accumulation
• Key Advice:
  • Examine both income and outgo—increase income with integrity; cut spending to the bone ("beans and rice, rice and beans", no eating out unless at work).
  • Start budgeting: “You both sit down, you fill in the numbers, you make sure you're both in agreement on how we're going to spend our money.” – Jade [05:41]
  • Use wedding gift money ($5K) to wipe out credit card debt immediately.
  • Proactive mindset: “Now you're about to happen to it. That's what's going to...it's called proactive.” – Dave [07:11]
• Quote: “Most people in America, Nick, are right where you are right now. Broke, chaotic, disorganized. ...Today it changes. Nick’s a dad, Nick’s a husband. And we’re going to get on it. We’re going to get grown-up land.” – Dave [07:49]

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2. Smart Home Buying Near Retirement

Caller: Candy from Philadelphia ([10:27]–[15:37])

• Situation:
  • Age 53, $250K saved for a house, $205K household income, considering a $200K mortgage in pricey N. Virginia; worried about retirement readiness vs new mortgage.
• Key Advice:
  • You have ample time for growth; projections show millionaire status by retirement even without further investment.
  • 15% of income goes towards retirement; mortgage should be on a 15-year (or 10-year) plan, with house paid off in 4-5 years.
  • “You’re not setting yourself back in net worth...What you are setting yourself back in is cash flow...But that’s not setting yourself back. It’s going to actually cause you to accelerate.” – Dave [14:11]
• Notable Moment: Dave humorously mandates grandkids as a reward for moving closer to family [14:45].

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3. Handling Financial Gifts & Debt During a Wedding

Caller: Elijah from Indiana ([15:59]–[20:00])

• Situation: Received $5K for wedding from fiancée’s parents; considering using it for debt instead.
• Key Advice:
  • Using such a gift for its intended purpose is generally expected unless otherwise specified; but if it exceeds or refunds previously spent funds, using it for debt is acceptable.
  • Communication with fiancée is crucial. Get alignment before diverting the gift.
  • “Let’s pretend this call never happened.” – Jade [19:27], joking after the caller admits not having discussed with his fiancée yet.

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4. Financial Values in Relationships

Caller: Brianne from Indianapolis ([21:36]–[26:36])

• Situation: Age 20, fiscally responsible, wants to find a partner with similar money philosophy; asks if this is being "too picky".
• Key Advice:
  • Don’t demand perfection (emergency fund, budgeting) on date one; prioritize shared philosophy, maturity, and growth mindset.
  • “Give me what I want...It would be like dating that person. Right. And so give me what I want. I want it, I want it. And I'm going to go into debt and I'll get whatever I want and I don't need to...” – Dave [25:05]
  • Heartbreak and growth are part of the process; be patient.

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5. Financial Recovery After Divorce in Later Life

Caller: Tommy from Dallas ([26:42]–[31:22])

• Situation: Age 84, recently divorced, $20K debt, $270K income, $100K in savings.
• Key Advice:
  • Immediate payoff of all debt for peace of mind, then focus on stacking cash for flexibility and potential exit from business.
  • Major at this life stage is “solving for peace,” not necessarily long-term wealth [28:02].

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6. Young Entrepreneur: Structure for Business and Debt Payoff

Caller: Skyler from Richmond, VA ([33:31]–[41:48])

• Situation: Age 19, own pressure-washing business ($10–11K/mo), $58K in debt (cars, cards, personal loan), disorganized finances.
• Key Advice:
  • Set up separate checking for business; only business income/expenses through it.
  • Pay yourself, set aside taxes (about 25% of net profit), and use a personal budget for everything else.
  • Attack debt with intensity; live far below means.
  • “You just spending like you’re in Congress, man.” – Dave [40:40]
  • Rapid debt payoff possible ($6–8K/mo after taxes), within 6–8 months if disciplined.

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7. "When Are We Ready to Have Kids?"

Caller: Alice from Raleigh, NC ([44:07]–[51:24])

• Situation: Some debt, would like to start a family, feels unready financially.
• Key Advice:
  • It's less about debt and more about clarity of the life you want (e.g., stay-at-home parent vs. dual income).
  • Run an honest future budget based on real numbers (“faux budget”).
  • "Facts are your friends"—get real child-care, daycare, and cost numbers.
  • Memorable: “Their car seat takes up more room than they do.” – Dave [48:32]

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8. Financial Disagreements: To Pay Off the Car or Keep More Cash?

Caller: Alex from Rochester, NY ([54:07]–[62:30])

• Situation: Couple disagrees—pay off $60K car with $150K in savings, or keep cash buffer?
• Key Advice:
  • Ideal emergency fund: $30–40K, rest should be invested if no debt.
  • Must address underlying fear (mythology) behind spouse’s reluctance.
  • “Facts are your friends, and we need to say, okay with these facts. Explain to me what the fear is.” – Dave [58:46]
  • Opportunity cost: Sitting on too much idle cash is expensive over time.

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9. Handling Layoff Notice and Retirement Account Management

Caller: Jeanette from Pittsburgh ([118:57]–[127:42])

• Situation: Husband losing job soon after 26 years; $200K in 401k, little savings, $13K credit card debt, mortgage; uncertain about stopping 401k contributions and rolling over retirement funds.
• Key Advice:
  • Immediately stop investing and focus all resources on debt payoff and emergency savings.
  • Roll over 401k via direct transfer to IRA with a SmartVest Pro; avoid 20% federal withholding.
  • Treat severance not as buffer time, but as bonus—work to seamlessly begin the new job as soon as the old one ends.
  • Quote: “Get a job now between now and December that starts at the end of December. But you start looking now, you know how fast Christmas is going to be here? You blink and it'll be here.” – Dave [122:22]

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10. Moral of the Episode: Hard Facts Beat Myth and Fear

• Across all calls, Dave and team returned to the principle that emotions, fear, and stories we tell ourselves (“mythology”) must yield to reality and proactive planning.
• “Facts are your friends…Just because your body is reacting doesn’t mean those are facts.” – Dave [60:35 & elsewhere]

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Additional Notable Calls & Moments

• Should I pay off a mortgage at 3.875% at age 70 with a $1.8M net worth?
  Answer: Yes; don’t carry debt for marginal gain. Reverse-engineer the logic—wouldn’t borrow $81K for cash if already mortgage-free. [87:35–90:47]

• Housing family: Should I let my mom move into our upstairs duplex?
  Answer: Only temporarily (if at all); push her to buy for her stability, and say "no" if there's strong hesitancy or history of enabling/poor boundaries. Jade and Dave give permission to use them as scapegoats in tough family convos. [98:01–104:27]

• Debt-Free Scream:
  Kevin and Ashley from South Bend, IN paid off $30K in 12 months on $30–65K income, living in a basement, eating 15-bean soup, fully on the Ramsey plan. [108:13–114:47]

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Notable Quotes

• “Most people in America, Nick, are right where you are right now. Broke, chaotic, disorganized.” – Dave [07:40]
• “Facts are your friends, not feelings.” – Dave, summary message, repeated throughout
• “You just spending like you’re in Congress, man.” – Dave [40:40]
• “Give me what I want...it would be like dating that person...And I’m going to go into debt and I’ll get whatever I want.” – Dave [25:05]
• “You can get a budget and an emergency fund in about 20 minutes.” – Dave [25:39]

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Timestamps for Key Segments

• [00:46] – Nick: Struggling with debt, starting a turnaround
• [10:27] – Candy: Downsizing, moving, mortgage and retirement
• [15:59] – Elijah: Using wedding gift for debt
• [21:36] – Brianne: Dating with financial standards
• [26:42] – Tommy: Post-divorce, debt vs. retirement at age 84
• [33:31] – Skyler: Teen entrepreneur with business and debt
• [44:07] – Alice: "Ready" for kids?
• [54:07] – Alex: To pay off car or not?
• [87:35] – Greg: Should I pay off my mortgage?
• [98:01] – Sarah: Mom moving in – help!
• [108:13] – Kevin & Ashley: Debt Free Scream
• [118:57] – Jeanette: Husband’s layoff & 401k rollover

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Conclusion / Key Takeaways

• Budgeting and facing the facts with clarity is the key to all real financial progress.
• Stop letting feelings dictate your money decisions—swap "mythology" for math, emotion for action.
• Proactivity, honest budgeting, and open communication with partners/family are critical.
• No matter your life stage or situation, financial clarity and grown-up decisions pay off.

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Transcript

[Dave Ramsey]

Brought to you by the Everydollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit union Studio, this is the Ramsey Show. I'm Dave Ramsey, your host Jade Wash all Ramsey personality number one best selling author is my co host today. The phone number is, call is-982-55-5225. The call is free and some say the advice is worth exactly what you pay for it. Nick is with us in Philadelphia. Hi Nick. What's up?

[Caller]

Hey, Dave. I'm just. I have a couple questions concerning how to get out of debt.

[Dave Ramsey]

Okay.

[Caller]

So I am a sanitation worker. I make roughly 75,000 a year. I just got married about two months ago.

[Dave Ramsey]

Congratulations.

[Caller]

Thank you. Our combined is she makes anywhere from 20 to 25. So close to around 95,000. Okay. I am currently in $41,000 in debt across personal loans, credit cards and a car loan.

Okay.

[Dave Ramsey]

How much of it? How much of it's car.

[Caller]

Car. I'm halfway pay off my car. It's about 15. 15 and a half almost.

[Dave Ramsey]

Okay. And what's the rest of it again?

[Caller]

21 of it is personal loans and 5 of it is credit card.

[Dave Ramsey]

Okay. What kind of personal loans? Just at the bank.

[Caller]

So when we got. When she got pregnant a couple years ago, it was a really quick thing. We had to move out quickly and I had cover the maternity leave and all that stuff. So I took out a quick little six grand loan so I could be secure after we moved into our apartment and just have the money to help her. And then I just. What I started doing is I just started racking up personal loans because I was stupid with my money.

[Dave Ramsey]

Okay.

[Caller]

And would get in credit card debt. Need to take out another one. Another one and then the last. Then I took out one to get her engagement.

[Dave Ramsey]

So what happened the other day that stopped you for. And you said I got to call Dave and Jade and we got to change what happened?

[Caller]

I just went in paycheck to paycheck and something ain't working.

[Dave Ramsey]

Yeah.

[Caller]

And it doesn't make sense to me. This should not be happening.

[Dave Ramsey]

You're a good man. You're a good man. Thank you for calling. You are why we're here, brother. Okay. So how old is the baby now too?

[Caller]

She'll be tuned on Friday.

[Dave Ramsey]

What does your wife do and why does she not work full time?

[Caller]

She works four days a week. She. She is a.

[Dave Ramsey]

Makes a dollar an hour.

[Jade Warshaw]

Wow. Yeah. That's a lot of time working and not a whole lot of money being made. What's, what's the type of work?

[Caller]

She's a dog trainer. She makes, it's based on commission. She can make anywhere between 20 to 25.

[Dave Ramsey]

She's not working as much as you said.

[Jade Warshaw]

I almost wonder if she could dog train on her own and make and set her own clients and set her own pay because she'd probably. Here's the thing, she'd probably do more. She'd probably do more money in less time doing that freelance and she could probably make that a side hustle and get another job.

[Caller]

Yeah, I mean I'm, I'm also looking to get back into. I also tax services. I am a delivery driver so I work on get cash under the books. Although I haven't been doing that for the past two months because I had like issues in the summertime slowed up so they let me go for a couple of months.

[Jade Warshaw]

Why are they paying you off the books? Why can't you have a job where you're paid above board?

[Caller]

I don't, I don't know any pizza shop have ever delivered that. They've always paid under the books.

[Dave Ramsey]

Okay, all right, all right. So here, one part of the equation, the reason we're poking at that is the income part. The other part is the outgo part. Okay? So we're going to get up above this problem because what happens is when you get down in the weeds, you get lost and it becomes overwhelming and really, really scary and chaotic. And that's kind of the way you were feeling right before you called us. So what I want to do is I want to get in the drone and I want to get up above the weeds. I want to get up above this situation and say, okay, there's two parts income. You and your wife sit down tonight and start talking seriously about what we can do to add to your good $75,000 job. That is reasonable. With a two year old in the house, what can she do to double, triple, quadruple her income? What kind of side hustle can you have that has integrity to it and that doesn't get you in some kind of a bind later? And that is steady. Sounds like these guys come and go. And then on the outgo side, we're just going to sit down and say, all right gang, we're two grown ups with a baby. Game on. Because that's why you called game on. And we're going to say beans and rice, rice and beans. No eating out unless you're you can't see the inside of a restaurant unless you work there.

[Jade Warshaw]

Do you have a budget, Nick?

[Caller]

No, not really.

[Jade Warshaw]

Okay, though. There we go.

[Dave Ramsey]

That's a start. Let's start with that.

[Jade Warshaw]

We need that.

[Dave Ramsey]

That's every dollar budget, Jade.

[Jade Warshaw]

Yeah, we'll give it to you. We'll make sure the phone screener picks up and gives you that. But here's the thing. You've got to do it tonight with your wife. You both sit down, you fill in the numbers, you make sure you're both in agreement on how we're going to spend our money. And that's it. That's how you do this going forward. And the biggest number to look for when you plug in all your numbers, Nick, because the goal is to go through and think of all the things you might spend money on. And at the top, it's either going to be in the red or it's going to be in the green. Whatever is in the green is your extra margin. That's what goes to your smallest debt. Okay. After you make minimum payments on everything, whatever is green, that number goes towards the smallest debt. We're going to do them smallest to largest. And that's how you guys are going to work this out.

[Dave Ramsey]

Yeah. List the debts.

[Caller]

Yeah, I actually just. I've actually just wiped away a good like 5, 600 of credit card debt.

[Jade Warshaw]

Okay, good. Do you have any money saved?

[Caller]

Wedding gifts?

[Jade Warshaw]

Do you have any money saved?

[Caller]

We have the remaining of our wedding.

[Jade Warshaw]

Okay. Wedding gifts, which is how much?

[Caller]

I want to say around 5,000.

[Jade Warshaw]

Okay, good to know. So here's what I would do.

[Dave Ramsey]

Get rid of all your credit cards tonight, pay them all off and chop them up. That's your wedding gift.

[Jade Warshaw]

Oh, I like that.

[Dave Ramsey]

I became credit card debt free. And if I gave you a wedding gift and you were a sharp young couple and you had a new baby, and you told me that that's what you did with your wedding money, I would be very proud of you. That's what I would want to do with it. Hang on.

[Jade Warshaw]

I think he just blew his mind.

[Dave Ramsey]

See, we're going to put you to action, man. What you've been doing, sitting on the sidelines and letting all this crap happen to you. And now you're about to happen to it. That's what's going to. It's called proactive, and it's one of the seven habits of highly effective people, according to Mr. Covey. Dr. Stephen Covey. And so check it out. You happen to things instead of things happening to you. Most people in America, Nick, are right where you are right now. Broke, chaotic, disorganized. Because all these banks and car companies are more than willing to happen to you. Their job is to screw you. And they are better at your job, at their job of screwing you than you are at keeping that from happening. So. Not today. Today it changes. Nick's a dad, Nick's a husband. And we're going to get on it. We're going to get grown up land, no eating out, no vacations, no buying nothing until we get this debt cleaned up. Because if you didn't have any payments and you had two good solid jobs, y' all be making some serious money.

[Caller]

Oh, yeah.

[Dave Ramsey]

And that's where you're headed. You're going to be in a position. Think about what it'd be like, Nick, if you had no payments. Holy. That's what's going to happen if you do what we teach you to do. And we're going to show you how it's possible. Hang on. We'll pick up and get you signed up for every dollar. It's our gift to you. Oh, there's another wedding g gift.

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[Dave Ramsey]

Candy is with us in Philadelphia. Hi, Candy, how are you?

[Caller]

Hi. Good. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller]

My husband and I are 53. We have no debt. We have a fully funded six month emergency fund. Our investments we're contributing the 15%. Most is in a traditional and some is in the 401k through his work,

which is a traditional way to go.

We have a house. Yeah, we have a house fund. It's almost 250,000. A year ago, we sold our home that we raised the kids in. We're basically empty nesters. We decided to rent for the past year just to see where our youngest ended up. But we're looking to move to Northern Virginia, which is a pricey area at this point. I'm just concerned about being my age and I'm going to have to take a somewhat of a mortgage, obviously, 15 year. How do you feel about. Like. I'm hoping it would only be about 200 or so.

[Dave Ramsey]

What's your household?

[Caller]

We're a little. 205.

[Jade Warshaw]

How much of the 250? Didn't you say you had 250,000 saved?

[Caller]

Yeah, yeah.

[Dave Ramsey]

She's going to Northern Virginia and you're thinking you're going to spend 450?

[Caller]

Yeah, I know.

[Dave Ramsey]

Is that what you said?

[Caller]

I know. It's probably nearly.

[Dave Ramsey]

No, I mean, 450 in Northern Virginia is not much. Yeah, it's not.

[Jade Warshaw]

So you would put halfway on the outskirts?

[Caller]

Yeah, yeah. We're looking to put half down.

Okay.

[Dave Ramsey]

250 down. Take out a 200 mortgage. Is that the plan?

[Caller]

That's what I want to ask you about.

[Dave Ramsey]

And your household income?

[Caller]

205.

[Jade Warshaw]

Okay.

[Dave Ramsey]

And you're how old?

[Caller]

We are 53. So I'm worried about being behind in retirement investments. That's my concern right now.

[Dave Ramsey]

How much is in the 401ks?

[Caller]

The Traditional has 585,000 and the 401k has about 24, but they're both traditional. So should I open a Roth with the extra that I put in?

[Dave Ramsey]

If your company offers a Roth 401k, I would switch my contributions to that. Did you say five three or six? Three years old

[Caller]

with the traditional.

[Dave Ramsey]

How old are you? 53 or 63?

[Caller]

Oh, we're 53. Five. Sorry. Five three.

[Dave Ramsey]

My hearing. I'm sorry. All right, so 53. So you got plenty of time. Okay, so you've got 600,000 bucks, plus it'll be a million two when you're 60, it'll be 2.4 when you're 70. If you're invested in good mutual funds, and that's if you don't add anything to it. So you're fine on retirement. You're doing fine. You keep adding to it, you're gonna have millions of dollars at retirement and you're gonna have the house paid off. You're gonna pay it off how quickly? If you take out 200, making 200. You guys have done a great job of diligence and excellence so far. So I'm gonna guess years you got this thing paid off. Does that sound right?

[Caller]

Yeah. I could easily put a lot towards it. Yeah.

[Jade Warshaw]

Easily be able to double the payment every month if you wanted to.

[Caller]

Or more. Yeah, totally.

[Dave Ramsey]

Yeah.

[Caller]

Yeah.

Okay.

[Dave Ramsey]

You're not setting yourself back in net worth. You're increasing your net worth because the house is going to go up in value and the debt's going to go down. So if you took out a $200,000 loan on a car and the debt went down slightly than the car went down in half, then you'd be setting yourself back. But a house is going up in value, so you're not setting yourself back. What you are setting yourself back in is cash flow because you're going to have to dump some on this mortgage to get rid of it. But that's not setting yourself back. It's going to actually cause you to accelerate faster, especially when you get it paid off.

[Caller]

Oh, okay.

[Dave Ramsey]

Yeah. I would do this. I would do this plan. I'd put it on a 15 year fixed rate or a 10 year fixed rate, one of the two, and I'd pay it off in four or five total.

[Jade Warshaw]

Totally reasonable.

[Caller]

Yeah, absolutely. I could do that.

[Dave Ramsey]

Yeah. You're gonna be fine, Candy. The good news is with people like you, that if you just are smart enough to ask the question, you're already on the way.

[Jade Warshaw]

Right.

[Dave Ramsey]

And you're already dialed in. You've got everything else dialed in perfectly the way we teach.

[Caller]

Okay, great.

[Dave Ramsey]

15% going into income, 15% going into retirement today. 250 sitting in an investment account from the last house that sold. You've got an emergency fund. In addition to that, you've got no consumer debt, no debt at all today. And you're going to make this move to be with family. This is why you work, to be near family. Good for you. Well done. Well done. And then the mandate is that that little turkey has grandkids. If you move to Northern Virginia for that little turkey, that little turkey needs to have grandkids. That's your job, little turkey. The number of my friends and my age group that are following kids. Oh, wait a minute. They're following grandkids?

[Caller]

Yeah.

[Dave Ramsey]

Around the country, moving from places they've lived for 40 years is amazing to me.

[Jade Warshaw]

You'd probably do the same thing if you had to.

[Dave Ramsey]

Yeah, Sharon would. And then I'd have to Go with her. That's how it works. Yeah, Dave just doesn't want.

[Jade Warshaw]

Dave loves Tennessee. That's all right.

[Dave Ramsey]

Dave loves Tennessee. Bless America. Elijah's in Indiana. Hey, Elijah, what's up?

[Caller]

Hey, Dave. How are you doing?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller]

Yeah, so my boss put me on the Ramsey plan just a few weeks ago. So I've been reading the books, using the app, all that good stuff. But just the other day, I went back and used my credit card, so I can. I'll explain why I did that.

[Dave Ramsey]

Forgive me, Father, for I've sinned.

[Caller]

Indeed. Yeah, there was some. There was some paint on my sink, and I didn't want to gouge the surface with a metal scraper, so I found my credit card actually works really well.

[Jade Warshaw]

That's funny. Okay, well played.

[Ashley]

Well played.

[Dave Ramsey]

You got us, okay? You reeled us in. We're hooked. There was some frost on the windshield.

[Caller]

All right, well, so I do have a question, and it's about money gifts. So in a situation where a friend or a family member gifts you money for, like, a specific purpose, should you just use the money for that specific purpose, or is it kind of disrespectful or dishonorable to instead just throw that money at debt and try and get out of baby step two?

[Jade Warshaw]

I don't think it's dishonorable or disrespectful. It would be one thing if they said, here's some money for you to we do a family vacation, and here's the money for you to go on the vacation with us. Right. That feels a little different than just happy birthday, Here's a couple of hundred or however much money, cash.

[Dave Ramsey]

How much was the gift, and what was it for, and who was it?

[Caller]

So my fiance's parents gifted us $5,000 to help cover wedding costs.

[Dave Ramsey]

Oh, okay. So they're paying for the wedding?

[Caller]

In part, yeah.

[Jade Warshaw]

They wanted to just show.

[Dave Ramsey]

How much were you planning on spending on the wedding?

[Caller]

We had a 10, $15,000 sort of window that we wanted to stay in,

[Dave Ramsey]

and that's more than 5,000. So where's the problem?

[Caller]

The problem is I. You know, I've sort of paid for a lot of things myself, and, like, we could use that money to make the wedding, like, a little nicer.

[Dave Ramsey]

Oh, wait a minute.

[Ashley]

Wait a minute, Wait a minute.

[Dave Ramsey]

And so the wedding budget, you had already covered some of it, and they refunded you.

[Jade Warshaw]

Oh, that's a good way to look at it.

[Caller]

Yeah, I guess. I guess that's one way to look at it. Yeah.

[Dave Ramsey]

If we had a $15,000 wedding budget and they put in five and I've already paid 12, I'm pulling my two out.

[Jade Warshaw]

It's a refund.

[Dave Ramsey]

Yeah, I mean, that's fine.

[Caller]

Okay.

[Dave Ramsey]

Nothing wrong with that.

[Jade Warshaw]

Now, did they say. Did they give it, saying, you have

[Dave Ramsey]

to spend this on top of what you've already done? Was that specific?

[Caller]

Sorry.

[Jade Warshaw]

Did they say 10 to 15 is not enough? We think you need a nicer wedding. Here's 5,000 more dollars.

[Caller]

Well, they just, like, love helping and being involved with the wedding, and they felt like they weren't doing enough, so they're just like, here, like, have some more money.

[Dave Ramsey]

Oh, wait a minute, wait a minute. That sounds like code for your fiance was whining that she wanted something she didn't have yet in the wedding, so mommy gave her some money.

[Caller]

We were cutting corners. Yeah.

[Jade Warshaw]

So what does your fiance think about

[Dave Ramsey]

cutting corners in every wedding? Otherwise they're 400 grand.

[Jade Warshaw]

Yeah. When you said to your fiance, hey, I'd like to use this money to pay off some debt, what was her response to that?

[Caller]

I haven't asked her yet, but she.

Oh, no.

[Jade Warshaw]

Okay, let's pretend this call never happened.

[Dave Ramsey]

All right, let's stop. Let's go through a couple of possible scenarios and then you go work it out in the real world.

[Jade Warshaw]

Okay?

[Dave Ramsey]

Scenario number one is that you guys are in agreement. We're going to spend 15,000 and you've already prepaid some of it and you're going to refund yourself for the 5,000. That's perfectly fine. I don't think that's what happened. Scenario number two is your fiance was whining to her mother because she wanted a better XYZ for the wedding. So her mother said, oh, I'll give you some money to do that. Well, now you got to deal with your fiance, not your mother in law. You better get some clarity on communication here, brother.

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[Dave Ramsey]

Brian Brianna. Brianne. I don't know how you say this. Brianne. Brianne?

[Ashley]

Yep.

[Dave Ramsey]

Is it Brianne?

[Caller]

Yes.

[Dave Ramsey]

Hi, how are you? I'm Dave, good to meet you. Welcome. From Indianapolis. What's up Brianne?

[Caller]

Yeah, so I just had a quick question a little bit of a background to my question is I am a 20 year old college student that currently has no debt. I have almost a fifteen hundred dollar emergency fund and I am someone adults trying to get better at budgeting. My question is what advice do you have for somebody that is looking for somebody who is on the same track for a life partner? Is it too much to ask of a guy to have an emergency fund, to have no unnecessary debt to be able to budget and then how do I explain that to people who think I'm just being picky when all I want to do is be able to be smart financially?

[Jade Warshaw]

I love this question. I love that you're thinking about this. Is there somebody that you're seeing now or. There's nobody. There's nobody in the picture right now.

[Caller]

Well, about three months ago I just ended a relationship that was a bad idea emotionally, mentally and financially.

[Dave Ramsey]

Okay, so three strikes you're up.

[Jade Warshaw]

What I'd be looking for more so than dollar amounts. I'd be looking for someone who has the same financial philosophy as me and is working towards the same goals as me. And we might be at different points along that path and that's okay. But if we see eye to eye on money and just the basic philosophy of money and debt and spending and wealth, that's a really, really good sign. That being said, I'm not interviewing every guy I go on a date with. I'm not interviewing them on the first date. Right. Because there's also opportunity for people to evolve. And so I'm looking for the things that show this person is interested in personal growth, this person is interested in growing. In growing and getting better. Not necessarily changing towards me, but getting better.

[Caller]

Yeah. Because the relationship I just Got out of. There was no, no sense of knowing how to do a budget. Unnecessary purchases for a vehicle and just multiple, I don't know what we call red flags.

[Dave Ramsey]

Sure, yeah, yeah.

[Jade Warshaw]

And that's fine.

[Caller]

Is it too much like, is it unrealistic to have some financial expectations for.

[Dave Ramsey]

I don't know if financial expectations are the question. It is. It's not what we would recommend that you say, okay, you have to have a $10,000 in emergency fund and be doing a monthly budget. Let me see your budget. Or you're not available. No, that's not that you're not eligible. No, that's not what I would say. I would not tell my own kids to do that. And I did not. And I'm freaking Dave Ramsey. Okay? So my kids were taught to look for someone like Jade said, that's into personal. They have character, they have some maturity. Because a lot of times financial irresponsibility, just complete irresponsibility is just tied to immaturity. It's like a four year old in the cereal aisle. I'm keeping my four year old grandson, taking him to the fair, and he has a complete meltdown if I don't give him what he wants. That did not happen, by the way. But it would be like dating that person. Right. And so give me what I want. I want it, I want it. And I'm going to go into debt and I'll get whatever I want and I don't need to. And you just hear this kind of pattern in their emotional or lack. In their emotional maturity or lack of it. And so maybe they don't have an emergency fund. Maybe they didn't come from the exact same background you came from, but they're going somewhere and you can see that and you believe that that's what I'm looking for more than let me see your budget and let me see the balance on your emergency fund account.

[Jade Warshaw]

I agree.

[Caller]

That's very good.

[Dave Ramsey]

You know, and, and because you can get a budget and an emergency fund in about 20 minutes.

[Jade Warshaw]

That's right. And, and I, I also want to say this because this is just part of, I think dating people and, and meeting that person is you, you have to go on dates to, to get to know that person. You're not gonna be able to avoid getting to know someone and liking someone. And then maybe they don't meet the standards. And so there's a little bit of heartbreak sometimes you can't avoid that. And that's just part of finding that person. So this is not something that you can figure out the prerequisite and save yourself from it on the first date, if that makes sense. You have to go through the process a little bit. And that's just.

[Dave Ramsey]

It's been so long ago, I forgot.

[Jade Warshaw]

So you got Dave. I'm not gonna. I'm not gonna.

[Dave Ramsey]

No, really. I mean, I've been married 45 years. All I remember is I chased her till she caught me. That's all I remember, so. Oh, my gosh. Tommy's in Dallas. What's up, Tommy? How are you?

[Caller]

Very good, very good, thank you.

[Dave Ramsey]

How can we help?

[Caller]

I have a question. I'm an 84 year old man. I'm still working. I have an office that I have other people run for me, so I don't have to do a lot of work. But I have recently gone through a divorce and I'm looking at trying to recover. And I have. I have a good income and I have some debt and I. My question is, which comes first? Should I pay off the debt and then stack some money away for retirement or.

[Dave Ramsey]

How much debt do you have?

[Caller]

I have 20. $20,000. $20,760 in debt.

[Dave Ramsey]

And what is your income?

[Caller]

278. 290. I'm sorry. 278. Okay. 944.

[Dave Ramsey]

It seems like that you could pay off that 20,000 fairly quickly, couldn't you?

[Caller]

I could.

[Dave Ramsey]

I probably have the money in the account right now to pay it off.

[Caller]

I do. Okay.

[Dave Ramsey]

So if you paid, if you paid, if it's me and I paid it off, it would give me peace. I'm solving for peace.

[Caller]

Yes.

[Dave Ramsey]

I mean, I don't think we're working with a 30 year time horizon here that you're going to go build wealth. You're 85, I'm 65. I don't think I'm working with a 30 year time horizon. So I'm making decisions today on what give me peace or what influences and helps my family tree that I want to change. So long term with the kids, grandkids, that kind of stuff. So how long were you married?

[Caller]

20 years.

Wow.

[Jade Warshaw]

Oh, man.

[Dave Ramsey]

So you got married at 65 to that lady and at 85 y' all get divorced. That's wild, man.

[Caller]

It is.

[Jade Warshaw]

What's in your nest egg?

[Caller]

Not much. I have about a hundred thousand.

[Jade Warshaw]

That's it.

[Dave Ramsey]

How much do you have in savings?

[Caller]

50.

[Dave Ramsey]

Okay.

[Ashley]

All right.

[Dave Ramsey]

Well, what was the 20,000 in debt?

[Caller]

That was a credit card for 3,600, a car for 13,000 and a personal loan for 4,100.

[Ashley]

Wow.

[Jade Warshaw]

So when you, when you are not going into this office at all, will you continue to rent it? Is it something that you still own, that you'll continue to make income off of after you retire?

[Caller]

I continue, I continue to make income as long as I'm in the picture, as when I step away, walk away, the income ends. So I'm hanging on as long as I can.

[Dave Ramsey]

Yeah. Well, what I would do then is hang on as long as I can. I'd write a check today and pay off the 20,000 and I would not borrow another dime the rest of my life. And then I would start setting some money aside, adding to that hundred, which gives me the ability to step away. The bigger that number, that 100 number becomes, the easier it is to step away when you want to.

[Jade Warshaw]

Yeah. That office rental, is that a building that you can sell?

[Dave Ramsey]

He's going into the business.

[Jade Warshaw]

Okay.

[Caller]

It's a business. I own a business.

[Dave Ramsey]

Yeah. When he goes to the office, it's going to the business.

[Jade Warshaw]

Going to the business.

[Dave Ramsey]

Yeah.

[Ashley]

All right.

[Dave Ramsey]

And so, yeah, that's what I would do. I would build the emergency fund. And then, you know, and she makes a point. When you step away, is there not some way to sell your ownership rights at that point also to someone? They ought to be worth something if you're making 270,000 out of it. So I don't know how you're structured or what you've got there, but that's a good question to go with it. First thing I do is pay off the debt. Second thing I do, start stacking cash in good, in a good investment and adding to that hundred while you're making 270. That's pretty easy to do. And third thing I do is assess if there's anything in that business, us, that. And we don't know that because we weren't talking to you long enough that you can sell and make money on.

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[Dave Ramsey]

If you're sick and tired of being sick and tired and you're ready to get, get off the rat wheel. Don't be a rat in the wheel. That's normal. There's only one way to do it when it comes to money and that's actually tell your money what to do instead of wondering where it went. That's called a budget. And the best way to do that is with every dollar. Now this is not simply a budget though. The budget's just part of it. Gets you started on working the entire Ramsey plan. And then as you work the Ramsey plan, the Everydollar app's going to teach you how to walk those baby steps. The shortest distance between where you are and being a millionaire. A debt free millionaire, by the way. In just 15 minutes you're gonna find thousands in hidden margin. You're gonna feel like you got a raise. Don't be normal. Normal sucks. Start your every dollar app for free in the App Store or Google Play. Skyler is in Richmond, Virginia. Hey Skyler, what's up?

[Caller]

Hey Dave, how's it going man?

[Dave Ramsey]

Better than I deserve. How can I help?

[Caller]

Yes, Sir. I am 19 years old. I have an 8 month old daughter and a fiance. I'm making about 10 to 11,000amonth consistently for the last 8 months.

[Dave Ramsey]

Doing what?

[Caller]

A question for you today is pressure washing and exterior window cleaning.

[Jade Warshaw]

Wow.

[Dave Ramsey]

By yourself?

[Caller]

Yes, sir, fully by myself. I thought about hiring technicians. I'm trying to go as long as I can without hiring people. But my question for you is how do I get out of debt at 19 with the money I'm making? My problem is I don't feel like we're seeing the money that I'm bringing in. I have about $58,000 in debt. That is from two cars, $1600 in credit cards and a $3500 personal loan.

[Jade Warshaw]

Okay. Is part of the reason you're not Seeing the money you're bringing in because you're not subtracting expenses out of

[Caller]

what

[Jade Warshaw]

people are paying you or, I mean, do you have it separated in the right ways?

[Caller]

Yes, ma'. Am. I think the problem is not a budget. I watch you guys a lot and I've been talking a lot to the fiance. We are on a complete scattered budget, okay? We know what the bills are. And then it's constantly, you know, going to Walmart, buying this, buying that, eating out seven times a week.

[Jade Warshaw]

Her or both of you?

[Caller]

Both of us.

[Jade Warshaw]

Okay.

[Dave Ramsey]

All right, well, let's stop for a second and let's make sure we've got some basic structures in place that statistically tell us you have a higher probability of winning. You have A Baby, you're 19, and you have a fiance. When is the wedding scheduled?

[Caller]

The wedding is scheduled at the end of this year. And we're not looking to spend a lot of money on a wedding. Honestly, I think what she wants to do is just go to the courthouse, get married like that, and then maybe have like a little get together because.

[Dave Ramsey]

How about next week? Yeah, if it's a courthouse, how about next week? Next week.

[Caller]

That sounds good. That sounds wonderful.

[Dave Ramsey]

Statistically, she and you have a higher probability of your marriage working, your relationship working, and your wealth building working, and your careers taking off as a married couple than you do as two shacking up, thinking there's a courthouse five months in the future. Okay? So I'm just giving you the data points. And so if you were my little brother, that's what I would tell you to do first. This weekend we're having a wedding and a get together. Okay? Now then, let's move on with your business. You are kicking butt because you are not afraid of hard work and you're showing up on time and you're pricing yourself reasonably. I know all of this because you're making freaking 120, $130,000 a year as a pressure washer by your freaking self. You're incredible.

[Jade Warshaw]

Way to go.

[Dave Ramsey]

Very proud of.

[Caller]

So it's not easy. I wake up about eight o', clock,

[Dave Ramsey]

you just get it. Somebody taught you how to work, young man. And I'm proud of whoever that was. You are a good young man. This kid has a good dad. You're going to have a good future. All right? Now, here's how we run a business. First thing is, if you. Do you have a separate checking account for the business?

[Caller]

No, sir. My dad told me that I need to start doing that asap.

[Dave Ramsey]

You need to do that today. Go down to the bank. You don't have to have anything except your Social Security number. It's called a DBA account, A Doing Business as account. It's Skylar so and so DBA Doing business as Skylar's Pressure Washing or whatever the name of your company is. That's all it's got to be. Okay, then here's how the math works. And it's going to help you get organized 100%. Not a dime less of the money that you get from a customer for doing a job goes into only the business account. Got it?

[Caller]

Got it. Now, what about.

[Dave Ramsey]

Just a minute. Just let me finish, I'll walk you through it and then you can ask. Okay, then the second thing is, nothing comes out of the business account except you and the business expenses. You don't buy groceries or lights or car payments out of the business account. I'm going to get there in a minute. Okay, so what expenses do you have at the Pressure Washington Company? You have gasoline you have to buy for your pressure washer and your truck that pulls it, right?

[Caller]

Yes, sir.

[Dave Ramsey]

What other expenses do you have?

[Caller]

Chemicals, you know, like mop squeegees.

[Dave Ramsey]

Right?

[Caller]

Right. Those things go out.

[Dave Ramsey]

You write a check for those or use the business debit card for those. You don't buy anything else out of the account. So in business, your revenue minus your expenses equals profit. Follow me?

[Caller]

Yes, sir. Profit this month was $9,500.

[Dave Ramsey]

Good. Perfect. Now when you take. If you want to leave a little bit in there for next month's expenses, that's fine. So when we take 8,500 out of that account or $8,000 out of that account, we leave 1,000 bucks or something in there. We don't want too much in that account, but we have enough in there to run the business. And we take $8,000 home, we write a check to Skylar that he's going to deposit in his personal account. Oh, wait. Taxes have to come out. And taxes on a self employed business your size are about a fourth of your net profit. So on $8,000, that's going to be $2,000. So you write a $6,000 check you put in your personal account and a $2,000 check you set in a savings account for your quarterly estimates. Remember this and go back and watch it on YouTube. Your quarterly estimates have to be filed on this. And you have to file and pay your income taxes quarterly. And they're gonna be about 25% of your profit. So now you're not gonna get behind with the stinking IRS and mess up this whole thing. Now I got $6,000 in my account to now start working on $58,000 worth of debt. Now we sit down and say, all right, I got a budget this month of $6,000. And we put that in every dollar.

[Jade Warshaw]

Yeah, I think that was your problem, having one account you and your fiance were seeing. Oh, my go, $12,000 in here.

[Dave Ramsey]

We can eat out if we want.

[Jade Warshaw]

Yeah. And we can do whatever we want.

[Dave Ramsey]

You can't eat out unless you sell both cars.

[Jade Warshaw]

And now that Dave has separated that for you, I think you guys are going to have a more realistic approach. That combined with every dollar. Now, I just want to know, you said you have two cars. We might be able to clear some of this out really fast. What are the cars worth?

[Caller]

Yes, I have a truck. That's what I use for the business. Not being smart. I was 18 when I bought it. Not being smart. I saw it at the lot, sign the papers, paid 32 for it. And the Kelly V book is 16 5. And it has a salvage title. Yes.

[Jade Warshaw]

Okay, what about the other one?

[Caller]

The other is her car. It's a little Volkswagen. It's repaid 24. It's worth 20.

Okay.

[Jade Warshaw]

That's a lot of cars. I mean, for what you're earning, you're right on the line. But it sounds like you're interested in being debt free. So I'd work on either knocking these out or selling off at least one of them.

[Dave Ramsey]

Yeah, I'd get them. So I'd get them paid off very, very quickly. Here's the good news. You guys aren't used to making this kind of money, so quit spending it. You know, you just spending like you're in Congress, man. So your dad's right. Get your every dollar budget out, write it down, put everything down. And, dude, you're way too smart to be acting this way, all right? And you're way too good at the other parts of this. So we give every dollar a name. $6,000 at the top. Every dollar has an assignment. And don't go out to eat again. She gets to cook.

[Caller]

My last question is, should I tackle every extra dollar on payments or just bite the bullet and get rid of the truck?

[Dave Ramsey]

Of the car, if you might. Get rid of the car. But let's buy. Let's just attack the debt for a month or two and see how it feels after fighting it and fighting it and not going out to eat and not going on vacation and not doing anything except paying off debt because you've made a mess that you can clean up fast if you lean into it. But if you screw around with it, you're going to be looking like this when you're 35 and you don't want to do that.

[Jade Warshaw]

The good news is for your truck, since it is your business truck, you could use your business money to pay it off.

[Dave Ramsey]

Nah, no, I would just. I would just pay it off out of it. It's a personally signed for it. Personally. He's just started his business. It's not a. Yeah, yeah, I just knock it out. Let's just knock it out out. It's not a. You can't. There's not anything you can write off on it anyway at this stage, except maybe depreciate it. And that might be a nightmare. So no, I. Let's just lean into this thing and take $6,000, $7,000, $8,000 a month after taxes and let's attack the 58,000. How fast can that be gone? Crap, man. Six or eight months, you're done. But you live on nothing, dude. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business. We wasted too much time chasing information instead of making decisions. That's why we got NetSuite. NetSuite brings your financials, inventory, CRM and more together in one place. More than 44,000 businesses run on NetSuite, including Ramsey. And now they're taking the next step with NetSuite Next, making it easier to put AI to work across your entire business. NetSuite Next helps you make the most of your time automating routine work like forecasting demand and following up on overdue accounts. With NetSuite Next, AI is built into everything you do, so you can ask it questions, just like when you're talking to a member of your team. And right now you can try Netsuite Next for free. If your revenue is at least seven figures, go to NetSuite. AI Ramsey. That's NetSuite AI Ramsey. Welcome back to the Ramsey show in the Fair Wind Credit Union studio. Jade Washall Ramsey personality, best selling author. Number one best selling author is my co host. Today. Alice is with us in Raleigh, North Carolina. Hi Alice, how are you?

[Caller]

I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

First of all, I can't believe that I'm talking to you guys right now. And I am so anxious. So if I sound completely dumb, please forgive me.

[Dave Ramsey]

You'll be fine. We've never lost A patient.

[Caller]

Okay. Okay. So my question is, how do you get over the fear of not being ready financially ready to start a family?

[Jade Warshaw]

Okay, tell me what that means. You're not financially ready to start a family.

[Caller]

Okay. So my husband and I are in a little bit of debt. We've. We've paid off a lot of our debt, and I'm very proud of us so far, but we still have some to work on. We have a $20,000 student loan that's mine. And then we have a $45,000 student loan that's my husband's, but he's about six months away from the public student loan forgiveness program. So right now we're kind of just paying the minimum monthly payment on that and hoping that forgiveness comes, since we're so close to the end. And then the only other debt that we have is our house and our mortgage.

[Dave Ramsey]

How much have you paid off so far?

[Caller]

Our student loans.

[Dave Ramsey]

No, you said you paid off a bunch. And you're proud of that. What did you pay off and how much?

[Caller]

We paid off our credit cards. That was about 6,000. And then we paid off both of our cars. I lost my mom last year, and I got some inheritance money, and we were able to pay, like, $50,000 worth of car payments off. And, yeah, that felt really good to have.

[Dave Ramsey]

What's your household income?

[Caller]

It's about 110,000.

[Dave Ramsey]

So if you make $110,000 and you have a 20 and a $45,000 student loan, why can you not have kids?

[Caller]

Kids? Because I just feel like there are so many things that I would want to do if I became a mom and, like. Like standing towards the five. Well, I would love to stay at home, but I just know that that option is not possible.

[Jade Warshaw]

I think that's where we. I think that's the first step in this, is clarifying what that means to you and having a really clear picture of. Of if I want to have kids, this is the way I want it to look and solving for that.

[Dave Ramsey]

So it's not the. She's exactly right, because you're not.

[Jade Warshaw]

It's not the debt. The debt's not the problem.

[Dave Ramsey]

It's not the debt, and it's not the kid. It's what you want to do because there's a kid.

[Jade Warshaw]

Yeah. And what's the income breakdown? The. I think I heard you say you make 110. What do you make and what does he make?

[Caller]

We both make around 55,000. So it's pretty split down the middle.

[Jade Warshaw]

So you already have A mortgage. Right. I think I heard that.

[Caller]

That, yes. So our mortgage with like taxes, insurance, and everything is like $2,200 a month.

[Jade Warshaw]

All right. So, yeah, that's, that's the game you've got to play is if. If I want to have a child, I want to stay at home. Now I've got to run out the budget on $55,000.

[Dave Ramsey]

Or if I don't want to stay at home and I want to do other things associated with the kid. Maybe it's the other things that are pro the problem and not the kid.

[Caller]

Right. My, my biggest concern is, like, I want to contribute to a 529 plan and I don't want to get out of debt.

[Dave Ramsey]

Finish getting out of debt and do it.

[Caller]

Yeah, we're trying to.

[Dave Ramsey]

Well, I mean, you'd have 20 years to work on that. The kid's just born. The kid's not even born yet, so.

[Caller]

Right, right. It's just. I know, like daycare and things like that. Like, it's such a common, like, here's

[Jade Warshaw]

what you got to do.

[Caller]

So expensive for people. And so I'm just like, ah, it's a lot.

[Jade Warshaw]

You've got to run a foe, but you've got to run a faux budget. The running a budget and seeing the actual numbers is going to give you real answers to your question. Right now they're just a bunch of things floating around in your head and you're thinking, I think it's this, it might be this, it could be that. Just give real numbers to it. And you can do that. You can run the budget as it is. Looking at your margin and saying, okay, looking at the margin we have now working extra, this is how quickly we're going to pay off the $60,000 in debt. Once we've paid off the debt, this is how quickly we can have the three to six months of expenses saved. Once we do that, after we start investing 15%, this is how much money we can put in the 529. These are all numbers you can know this evening.

[Dave Ramsey]

Your child is going to be fine. You make enough money. If you pay attention to the money and you continue on the track that you're on, you guys are going to be fine. You make enough money to have a child. What you may not have enough money to do is spend 462,000 on a nursery.

[Caller]

Right, right.

[Dave Ramsey]

I mean, like, go nuts. Okay. Or 46,000 on a nursery. Either one. Neither one is going to work. This is a very small human. They don't even know what's in the nurs? It's only the mother that does. The father doesn't even know what's in the nursery. And people go bananas. So if the things like that and you feel like, you know, well, we'd have to get a bigger car. No, you don't. It's a very small human. They'll fit in that car. They don't take up that much room. Their car seat takes up more room than they do.

[Jade Warshaw]

But if you do and you have to decide, what do you think? Are you thinking that you're going to stay home? Because that is the biggest part of this conversation. Because if you do, that does reflect on your comfort of living with a 2200 mortgage. So you guys have to look at. Okay, if you make that choice, what's your husband going to do? Are you going to work part time? There's got to be something that you do so that mortgage doesn't become half of your take home.

[Ashley]

Yeah.

[Dave Ramsey]

So the answer to your overall question is facts are your friends when you don't. Jade is exactly right. Lay out a budget for the way you see this going and the budget will look at you and say, no, you can't spend that on a nursery. And here's your daycare budget. Go out and shop some daycares. Talk to 5 or 6 or 10 daycares. Get actual numbers. Not what your friends said, not what you heard on the Internet, because both are liars. And so let's go find out what's really going on and what the real cost is. And honestly, diapers and formula, they're not that much.

[Jade Warshaw]

Diapers wasn't the thing. I feel like there's too much emphasis on diapers.

[Dave Ramsey]

Everybody goes crazy talking about it. I mean, it's like, I feel like

[Jade Warshaw]

the other things, everything is.

[Dave Ramsey]

I think our kids got like two years worth at all the baby showers. Yeah, I think they were. We had a warehouse for diapers. But.

[Jade Warshaw]

But all that being said is, I think it's what she's trying to do is plan for this. And I plan.

[Dave Ramsey]

If you plan for it, your anxiety will go down.

[Jade Warshaw]

Yes. Planning for when you're going to have a family is so important. And that's exactly what you're doing. That's what this is called. That's what it looks like. This is what it looks like to plan for children is what you're doing.

[Dave Ramsey]

If you use some common sense and your choices. Yes, that is mathematically sound. You should have no trouble and you're eligible based on the numbers you gave Us today to be a responsible person and have a baby.

[Jade Warshaw]

Okay, let's play this out because I have to say this. Cause we get this call. What there is the potential for is I have this baby now. I wanna stay home. Now I'm down to a $55,000 income with a mortgage that's 22,000.

[Dave Ramsey]

Do it.

[Jade Warshaw]

And I never paid off the 60,000.

[Dave Ramsey]

Can't do it.

[Jade Warshaw]

Now that is the call that we get and that's the person calling in stressed out.

[Dave Ramsey]

The answer is sorry.

[Jade Warshaw]

Exactly. And that's the part that I just want to call out is there are things you can do to make this a better, easier process for you. And if you have the ability to do that and you would like to do that, it's a good thing to do.

[Dave Ramsey]

Yeah. Like get the debt paid off.

[Jade Warshaw]

Yes.

[Dave Ramsey]

As an example, build your emergency fund.

[Jade Warshaw]

Yes.

[Dave Ramsey]

The further along the baby steps you are, the easier this, all of this

[Jade Warshaw]

is going to be. Right?

[Dave Ramsey]

Yeah. But you can't just go, oh, I'm really sad, I'm really sorry. And you get to go to work, you make, you know, play grown up games, get grown up prizes.

[Jade Warshaw]

I know that's right.

[Dave Ramsey]

So that's how it works. That's the deal. So. But the actual child thing of I can't afford to have children. I mean, if you got, you know, too many kids and you just keep spitting them out, you're going to have trouble.

[Jade Warshaw]

Trouble.

[Dave Ramsey]

Okay, that's not the issue. But you need to think about, you know, what is a reasonable process here with the income that you have and you know, the, the a typical family size and you will be fine.

[Caller]

Foreign.

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[Dave Ramsey]

Alex is in Rochester, New York. Hi, Alex, how are you?

[Caller]

I'm doing well. Thanks for having me on. Longtime listener. Appreciate you finding time to get me on today.

[Dave Ramsey]

Our honor, sir. How can we help?

[Caller]

So I have a question for you. I think my wife and I are in a phenomenal position based on how old we are and everything that we've been able to accomplish so far. But I have one point of contention with her. I think you'll agree with me, but I want to make sure I'm not violating another rule while I try to accomplish this. So my wife and I are disagreeing about paying off the one vehicle that we, that we have a note on right now. So we paid off her vehicle. We have my car. It's about a $60,000 balance on it. I'd like to pay it off of what we have in savings, but I want to make sure I'm not violating any other rules based on income, so on and so forth.

[Dave Ramsey]

What's your household income?

[Caller]

It's 150k a year.

Okay.

[Dave Ramsey]

And did you say you had your mortgage paid off that I hear that.

[Caller]

Yeah. We were able to sell a payoff our mortgage when we sold the business and also did well on selling our first home.

[Jade Warshaw]

So it's just this one car.

[Dave Ramsey]

Did you buy the car after that?

[Caller]

No, I bought the car before.

[Dave Ramsey]

Why did you not pay off the car too while you were at at it?

[Caller]

Well, that I would. I wanted to. That. That's what I'm saying.

[Dave Ramsey]

She wants to keep a car payment.

[Jade Warshaw]

What's the difference between the car and all the other debt?

[Caller]

She wants to keep the cash. She wants to have more in our savings. And I think we have way more than we need in savings.

[Jade Warshaw]

How much is in savings?

[Caller]

150,000.

[Jade Warshaw]

Okay. So she, it makes her feel uncomfortable to take 60 of the 150k to pay off this vehicle and be completely debt free.

[Caller]

Correct. As with anything, I mean, there's more to the story. So we had it. We had a second child and at the time we were concerned about medical bills. We've gone through infertility, so we didn't pay off, you know, we didn't want to pay off the car at that time. But now I think we're in a position. Baby's healthy you know, and I think we're in a position where we could pay off the car and be completely debt free. And I think at that point there's really nothing else for us to do. Thank you. Into the 15%, make sure we're funding the 529.

[Jade Warshaw]

And you make 150 a year.

[Caller]

Correct? Yep. Just, it's. We're just. Just on my salary. She stopped working back in October, which is another, you know, thing that happened that changed.

[Jade Warshaw]

So if you run out the numbers, pretend that you pay. Let's just pretend you pay off the car Today, you have 90,000 in savings. How quickly. If 150 is the magic number, how quickly could you get back to that?

[Caller]

Yeah, well, again, I don't want to get back. That's like part of the contention as well, because I'd like to shift anything additional. You know, obviously. I agree with you.

[Jade Warshaw]

I agree with you.

[Dave Ramsey]

Okay, let's back up.

[Caller]

I can show to her.

[Dave Ramsey]

Let's back up a second. Where you guys should be is your emergency fund. Should be about $30,000, maybe 40.

[Caller]

Yeah.

[Dave Ramsey]

You should have 50 in investments and no car payment. That's where you should be agreeing.

[Caller]

Agreed.

[Dave Ramsey]

Okay. And so now what we've got to figure out is why we're not there in her mind. So if we have no car payment and we have 50,000 in investments that we can get to on a one day's notice, if it's in a good mutual fund with a Smartvestor Pro, you can send them an email and you'll have the money in 24 hours. Okay, maybe 48, but somewhere in there. Okay, so it's not like it's not liquid, inaccessible, and it's going to be making a good deal more than that stupid savings account. And I've got 30,000 or 40,000 sitting there in 40,000 in this case for an emergency fund. And we've got no debt. Now what's the problem? That's what I want to ask her. And I would, because it sounds like it's mythology in her head.

[Jade Warshaw]

I would play this out with her because there's something that's causing her to freak out. And you should probably ask her the question. Question. What is the worst in your mind that you see taking place and what would it cost?

[Dave Ramsey]

And how could we. And why could we not handle that with this arrangement?

[Jade Warshaw]

The roof blows off the house randomly. Right. You know what? What truly in her mind is the worst thing, and that's how you run this back and help help her.

[Dave Ramsey]

See, I mean, Even medical bills with a child with, you know, issues when they're born? You've got freaking insurance. Your maximum out of pocket's probably 20 grand, and you're sitting on 150. Worried about it.

[Caller]

Yeah. Yeah, no, I totally agree.

[Dave Ramsey]

Well, what we got to deal with is facts are your friends, and we need to say, okay with these facts. Explain to me what the fear is. Jade's right. And then let's get into it rather than just fighting about, no, I don't want to pay off the car. Okay, Bull crap. Now, why? If we have 50,000 in investments and 40,000 and no debt in the world and we make 100, Jade's right. What is the scenario that you're worried about that you've dreamed up this, catastrophized in your head, and let's talk that through, and then you go, oh, okay. And so an example of that is, my wife and I were considering a large generosity gift. Okay, for us. What's a large gift? And she's like, I'm kind of nervous about this. And I went, oh, okay. Well, let's just pretend that we took that much money and we put it in the middle of the floor and we burned it. Are we okay? Oh, yeah, yeah. We got this and this and this and this and this. We're okay. So what is it you're nervous about? I guess I'm playing tapes from the old days. Oh, okay. That's fair. Because our tapes in our. The old days, the best of in the Ramsey House, it was bad. You don't want to play those tapes. Right. And that's fair to say. Oh, some of that bankruptcy stuff, when we were 28 and the lights got cut off. Coming up in my throat when we start talking about giving a gift with that many zeroes on it, that's totally fair. That's a great conversation to have. But all that is, is admitting that where we are is different than where we were. And just as Deloney says, just because your body is reacting doesn't mean that those are facts.

[Sponsor/Ad Voice]

No.

[Jade Warshaw]

And it's a time to remind yourself.

[Sponsor/Ad Voice]

It's a feeling.

[Jade Warshaw]

Facts.

[Dave Ramsey]

Facts are your friends. And the facts are that your family is in great shape. Your family has done a wonderful job. Such a good job that you covered all the infertility issues. You covered her quitting work. You covered any issues that came up with. A child that was born with issues you've covered and your debt, Free house and everything. But one stupid car. I mean, you guys have done gradually. Y' all are Amazing. You're in the top 1% of Americans. So. Yeah. So that's a fact. Now what are the fears and what is the thing we're believing? That's the boogeyman. Well, let's turn on the lights and see if there's really a boogeyman. Come look under the bed. Ain't no boogeyman under the bed. Okay, let's look in the closet. No boogeyman in the closet. Can you tell I've been keeping grandkids? Yeah. And so, you know, I mean, it's like. But this is. What are we afraid facts are, you know, and it's not to speak down to her in a condescending way. That's not what I'm doing.

[Jade Warshaw]

No, it's to get to understand to the root of it.

[Dave Ramsey]

You need to, as a grown up woman who's staying at home with your children as a result of our financial decisions, you need to have a grown up adult reason for this. Not just. I don't want to bull crap. Let's have an adult discussion here. Because here's the thing. That 50,000 bucks in investments would be 100,000 if you'd have put it in an investment back then. Cause it would have doubled when y' all did this since then. So you've lost $50,000 for screwing around with a stupid savings account. That's expensive. That ain't okay. You know? And so we're gonna have this discussion that's called opportunity cost, folks. When you miss out on an opportunity. Yeah, yeah, yeah.

[Jade Warshaw]

That's. That's scarier than letting go of the 60,000. Missing out on all that money.

[Dave Ramsey]

Yeah. And opportunity. But I'll tell you what happens. And it happens at my house too. Y' all probably don't do this, but sometimes you get to arguing about something like that and you finally go, it ain't worth it. Oh, yeah, I'll just leave the stupid 150 over there. It's not the right thing to do. It's wrong, but it ain't worth it. I did that with life insurance a few years ago. Swi. Sharon wants it. There's no reason I should have had life insurance. I had millions and millions and millions of dollars. And if I die, she had millions and millions and millions of dollars. She was fine and. But she said, I want life. I want a million dollars on you. I'm like, why?

[Jade Warshaw]

Just makes sense.

[Dave Ramsey]

So you got another million. I mean, why am I buying this stupid life insurance? And it wasn't that expensive. It was like, I don't know, thousand bucks or something. I'm like, whatever, it ain't worth it. I'll just buy it. Swi. And then one day, finally she went, I don't think I need that. And I went, oh, you didn't need it four years ago. But there we go.

[Caller]

Okay, Sam.

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[Dave Ramsey]

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[Jade Warshaw]

All right, today's question comes from Cooper in Maine. He says our household income is 22,000, 22 $25,000 thousand dollars and our only debts are $9,000 in student loans and our $300,000 mortgage. We pay $150 a month on the student loan and her employer matches our payment. Should we include this loan in our snowball and make larger monthly payments when we get to that point, or should we keep taking advantage of the employer benefit and let this thing ride for another two years?

[Dave Ramsey]

Well, first years.

[Jade Warshaw]

Yeah, two plus years. Well, first of all, you said your only Debt is the $9,000 in student loans and the mortgage, so you're not debt snowballing the mortgage with the student loans. You're just paying off the student loans. And Yes, I would 100%. Go ahead and knock this out. You make freaking $225,000 a year. This should be done in one month. It should be gone out of your life forever. Not squeezing out two or three plus years of $150. I mean, gosh, what is that?

[Dave Ramsey]

Yeah, are you couping. Are you clipping coupons too? I mean, my God, necessary? No, it's amazing. How are like in the name of math, we do some of the dumbest, smallest little dinky butt things and act like we're financially sophisticated.

[Jade Warshaw]

Well, yeah, because it's pain. It's your body getting a free.

[Dave Ramsey]

I'm getting a free airline money. Which you will never use, you fool. 78% of them are not redeemed. That's the actual number. 8 out of 10 never get used. And yet you went into credit card debt in the name of airline miles. And see, this is the kind of stuff people deal with. Or the guy who's like, I get 1% back on my Discover. That means for every $100,000 you overspend, they give you 1,000 back. Under what, on what planet does that make you a millionaire?

[Jade Warshaw]

Yeah, that's interesting.

[Dave Ramsey]

100 out for one back. Hella. Are you in Congress? What in the world? Who thinks that works?

[Jade Warshaw]

That's a very good point. All of a sudden you're interested in $150, but 225,000. When it was time to take the debt, you didn't care about the money.

[Dave Ramsey]

Exactly. Oh my. Yeah, pay it off yesterday, you probably have the money in savings right now. Quit screwing around with. Don't major in minors. Madeline is in Los Angeles. Hi, Madeline. How are you? You.

[Caller]

Hi. I'm good. Thanks guys for taking my question. Sure. I guess this question is coming more out of fear than anything because for the last 10 years I've been in real estate, but prior to that I used to work in dental practices. And being that the current state of the real estate market is what it is right now, I feeling like I'm back in, you know, the dental field where I capped at, you know, whatever, $20 an hour back then. And I guess that's where my question is coming from. I need to know if I'm doing the right thing, if I have.

[Dave Ramsey]

What is your question?

[Caller]

My money. And I have way too many accounts. And I feel all over the place. How many accounts do you have doing the right thing? I have two CDs, one Aira, two business accounts, another Just savings account sitting there doing nothing and. Yeah. And cash that. I don't know if I should put them the cash in into more.

[Dave Ramsey]

How much, how much money in cash do you have?

[Caller]

Huh.

I think it's like 80.

[Jade Warshaw]

80. What's your, what are you trying to accomplish by having all these separate accounts? Is that your way of diversifying? What are you telling yourself by having all those.

[Caller]

Yeah. And I, I really didn't know that I could have a step ira. And then I just thought, okay, well I'll just put them in CDs and.

[Jade Warshaw]

Okay.

[Caller]

I did well my last 10 years. Yeah. In real estate and I have two rentals and basically that's where my income is coming from right now. And that's why I feel like I'm back in the dental office, you know, because now I have to pay a mortgage where I live. My condo is paid off and the rents are what's keeping me afloat. I pay the mortgage and then I'm back to okay my income.

[Jade Warshaw]

I'm not sure what this has to do with the dental, but let's go through the numbers and see if we can simplify this. So you've got a paid off condo. That's great. The two rentals, do you carry mortgages on those?

[Caller]

One mortgage, yes. I just paid off a HELOC that helped me build the ADU that I rent, you know, from that.

[Jade Warshaw]

So how much debt do you carry on the rental store? Total rental?

[Caller]

A3.360.

[Jade Warshaw]

Okay, and then the 80,000 in cash, what's in the savings account

[Caller]

combined and some of three.

[Jade Warshaw]

No, no, no, just the savings account. What's in the savings account?

[Caller]

Oh, the savings that's in. That's like 30.

[Jade Warshaw]

Okay, and then what's in the two CDs?

[Caller]

That's. There's three cities. Okay, that's almost three. Almost 300.

[Jade Warshaw]

300,000. Okay. And when, when do those mature? When are you. When do they reach their target date?

[Caller]

They have different dates. Someone are on five months or six months.

[Dave Ramsey]

How old are you?

[Caller]

I'm so nervous. I'm so nervous.

[Jade Warshaw]

That's okay, don't be nervous.

[Dave Ramsey]

How old are you?

[Caller]

I'm 50. I've been a single mom.

[Dave Ramsey]

What's your best year in the real estate business? Business?

[Caller]

My best year was 20. 20. 2021 through 24, 25. I sold in nothing like 0 and 26.

Why did you sell 0 in 25?

I was exhausted. I was burned out. I was building my ADU in 24. I got the Occupancy Certificate of Occupancy in 25. I was burnt out. I was so tired. I'm a single mom, I. Everything is on me. My daughter is amazing. She just graduated from csun.

And why were you burned out?

[Dave Ramsey]

You made more money than you ever made in your life. You were tired.

[Caller]

That's why you're tired.

[Dave Ramsey]

Why were you burned out?

[Caller]

I hustled like big time.

[Dave Ramsey]

That doesn't kill you?

[Caller]

Every day from 7am to 11pm so

[Dave Ramsey]

why not cut your hours back to a normal hours? Instead of going to zero houses sold, just cut the number of houses you're selling back.

[Caller]

Why didn't you die on purpose? I think I was. I was working.

[Dave Ramsey]

You said you quit because you were burnt out. That is on purpose.

[Jade Warshaw]

And you said you're mostly living off of the rents. Yeah, the rentals.

[Dave Ramsey]

Okay, so. Yeah, go ahead.

[Jade Warshaw]

Here's what I would do.

[Caller]

I am. Because I don't touch any.

[Jade Warshaw]

There's two parts to this question. There's two parts to this, Madeline. Number one is if you feel like you need to cut back on working, working, you can do that. But you still need to be working in some way. I don't think there's any reason that you shouldn't be selling any houses. I think that there's just something there, that you've got a mental block there. As far as this money, I think there's ways that we can clean it up. I would take the 300000 and I would invest them. You can do a SEP if you want. You can do an individual 401k, maybe get with a smart vester and decide what the best option is for you for retirement. I think the safe savings for you, I would keep six months of savings and a high yield Savings account. If six months for you is around 30, 30 to 40K, that, that feels fair. And then the rest of that cash, I'd put it with the 300000 and I'd invest that. And then if you want to simplify even further, I'm not sure, but you might get to the point where you sell off one of these rentals to pay for the other. And that way you have one paid for in cash rental that's generating cash and then your own condo is paid, paid off. How does that sound? I know it sounds.

[Dave Ramsey]

It doesn't cost much to exist at that level. And you need to be working. You don't have to work 7 to 11.

[Jade Warshaw]

No, but you can work.

[Dave Ramsey]

But you could work from nine to four. I mean, and do a lot of house sales because you're good at it. You just talked yourself into the corner of saying, oh, oh, I'm dying. You're not dying.

[Jade Warshaw]

Yeah, go back.

[Dave Ramsey]

You just need to slow down. You don't need to quit, though, because you have the potential to earn a bunch of income. And so, yeah, what I would do is go to Ramsey Solutions and hit SmartVestor Pro. Sit down with them. They'll help you put some of this cash together and do some real investing. But that only works if you can. You're not sitting on your butt trying to live off the rentals at 52. Go to work, girl.

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[Dave Ramsey]

One of the biggest mistakes people make is thinking they can skip doing a will because they don't need one. I'm too young. I'm too healthy. I don't own anything. Not is the case. Not is the case. Not is the case. You can die at any health or age, and anything you have will be dictated by the government. Lord help you if you don't have a will, including where your kids go. Yeah, so it helps protect your family. It gives clear instructions and can keep your loved ones from having to guess what you wanted during a difficult time or from going at each other's throats. If you're ready to create A will go tomama bear legal dot com. If you're not sure where to start, text quiz to 33, 7, 8, 9 and we'll help you figure out which option best fits your particular situation. Amanda is in Minneapolis. Hi, Amanda. How are you?

[Caller]

You. Hi. I'm doing well. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So thank you for taking my call. So my husband and I are on baby step number five. And before we kind of go into saving for our children's future, we were kind of met with mandatory kitchen renovation that came up. It was a kitchen back from the 80s and you know, we had rotting cabinets and appliances were falling apart. And it was time. And so we felt with our finances where they were, we were able to save up. We did about a 25k budget for that with about 5k in fluctuation in case something came up. But the problem with that is that we experienced a huge mold problem that we had no idea. And so my question in this goes into we have about 30 saved up for the renovation and then we have another 30 in what we call our emergency fund. And my question is, should we be going into our emergency fund? And just to give a little bit more detail, we were told last Friday I work for a big corporation, that layoffs are coming. And then our manager followed up shortly after and stated that our group was not safe. And so my question is, should I be right now? I make about 105.

[Dave Ramsey]

What do you do?

[Caller]

I work for Med Device.

[Dave Ramsey]

What do you do?

[Caller]

Sourcing for the big med device company.

Company.

[Jade Warshaw]

What's your husband make?

[Caller]

He makes about 135.

[Ashley]

Okay.

[Dave Ramsey]

So did you start your job hunt last Friday?

[Caller]

My job hunt?

[Dave Ramsey]

No, you didn't. Hey, the guy told you he's getting ready to fire you. You need to listen, okay? You need, you need, you need a job by next Friday making 120.

[Jade Warshaw]

What's the molderant?

[Dave Ramsey]

And then give them the finger as you walk out the door. Corporate America is trying to piss on you. You better get right ready.

[Caller]

Okay.

[Dave Ramsey]

It's come. It's come. I mean they're not kidding when they say your group's not safe. That's code for pack your desk.

[Jade Warshaw]

Yeah.

[Caller]

Okay.

[Jade Warshaw]

What's the mold remediation cost?

[Caller]

Right now they have told us it's looking about an additional 12,000 based on the rotting that they continue to find as they move forward.

Forward.

[Dave Ramsey]

So you said I have mold remedy mediated many, many, many properties. The one thing I have found about it is it's a very Emotional subject for the property owner, typically. And the mold remediation companies have a spectrum of work that they can do from safe to crazy and dry. And so that industry does not have good credibility, because, in other words, I hear stuff anywhere from 30,000 to 4,000, and 4,000 absolutely will fix it in that case. And I personally experienced that taking bids and remediating mold. But it's like your children are going to die, and so that's where they start. Right. And it's a problem. And I've got, you know, we've got rental properties, and the renter calls us up and goes, my children are going, no, they're not. We're gonna remediate it. And remediate simply means get rid of mold. That's all it means. So I want you to get three more bids on this mold issue, because anytime someone says that mold has taken over the house, I always want to make sure that really happened. And is there something else we can do? And, you know, what's the process we do? Basically, we need to be rid of the mold and we need to seal so that it doesn't come back. And get rid of whatever water problem it was that caused the MO in the first place. Have you identified that part of it?

[Caller]

Yes, it was a renovation that we did about five years ago that caused it where a storm came in, and it just caused a major leak. And so we know where it came from. It's already been dealt with as we obviously finished.

[Dave Ramsey]

So we just got to tear out whatever rot there is and seal it and do the proper remediation. And that might not be 12,000. It might be. It might might be 12,000. Doesn't sound completely unreasonable. So. But I'm guessing you've already torn the. You got no kitchen right now, Right?

[Jade Warshaw]

There's nothing there.

[Caller]

We have no kitchen.

[Dave Ramsey]

No kitchen and no job. This is great. What a great week. And so, yeah, you got to put it back. You don't have a choice.

[Caller]

Yes.

[Dave Ramsey]

Okay, so I want you to get three more bids on the mold. The mold and the mold associated. Rot. Repair. Repair. Get some more bids. It's different than the kitchen guy. You may or may not use the kitchen guy after that. And then if it is 12, you've got 30. 12. You got 30 in your remodel budget, right?

[Caller]

Correct.

[Dave Ramsey]

And you've already given them some of that, right?

[Caller]

Yes, we've put down about 90% of our money already.

[Dave Ramsey]

Work that hasn't done majority of it up front on work that's not done. Done

[Caller]

well, it was to get everything kind of delivered.

[Dave Ramsey]

And yeah, it don't take 90% to get it delivered. Oh, that's scary.

[Jade Warshaw]

It is scary. I hope they. I hope they meet your standards.

[Dave Ramsey]

Yeah. So they have. So they have 27,000 of your 30.

[Caller]

Correct.

[Dave Ramsey]

Oh, boy.

[Jade Warshaw]

Okay.

[Dave Ramsey]

Can't breathe. Okay. And right now you've just got a hole in the wall. No cabinets, no nothing.

[Caller]

Nothing.

[Dave Ramsey]

Okay. Gulp. All right, so well, be careful how you talk to this contractor. Cause he owns your butt. So in terms of getting the other bids on the mold and stuff. But I would get some other bids just to say I need to make sure we're safe and make sure our numbers are right. Cause I think I'm losing my number job. Just tell the contractor that and then get some other bids. And then you have how much in your emergency fund again?

[Jade Warshaw]

30.

[Caller]

30.

[Dave Ramsey]

So it's 30 and 32. The two numbers are both 30. Okay. And you need 12 of that. In addition, the way it's bid out today to be able to finish the mold remediation and put the kitchen in.

[Caller]

Correct.

[Jade Warshaw]

And just a question.

[Dave Ramsey]

Which leaves you $18,000 and your husband makes how much?

[Jade Warshaw]

135.

[Dave Ramsey]

Can you live on your husband's income when you get laid off if you hadn't gotten your new job yet?

[Jade Warshaw]

Yeah, I hope so.

[Dave Ramsey]

Okay, good. All right.

[Jade Warshaw]

Have you plugged that into a budget just to see what it looks like? Temporarily, yes.

[Caller]

And it's scary. We have two kids in daycare, which is obviously not cheap. Our mortgage is about 2,500amonth.

[Dave Ramsey]

It won't be there if you're not working.

[Caller]

Mm. Yeah.

[Dave Ramsey]

I mean, if you're sitting at home or living on his income.

[Jade Warshaw]

Yeah. Take him out for a couple months. Yeah.

[Dave Ramsey]

So. All right, so here's thing one is get more bids and finish the kitchen. 12,000 or less. Okay. Leaving you 18,000 and his 135 to live on when you get laid off. Thing two is go get a job right now as fast as you possibly can, making 120 and then quit and go. Well, my group left. That's what my group did. Because we saw it coming. I mean. Yeah, your group is not safe. That's some scary butt words right there. Yeah. All right, so there's something about that process that makes people think it's not going to happen to me. Me.

[Jade Warshaw]

Maybe it'll be everybody else but me.

[Dave Ramsey]

Yeah.

[Jade Warshaw]

No, I'd be trying to get a job now while you have a job.

[Dave Ramsey]

Get out of there.

[Jade Warshaw]

And your mentality is good.

[Dave Ramsey]

As f and make more money somewhere else as fast as you can. Well, I mean, I got to get severance. I, I, my severance is. See you wouldn't want to be you. I'm done getting out of this.

[Jade Warshaw]

Hey, what's up guys? It's Jade. This back to school season, everybody's looking for ways to save money. But here's the thing. The best ways to find margin in your budget isn't on one time purchases like new shoes or backpacks. It's on the bills that show up month after month. That's why I recommend switching to Booster Mobile. Boost Mobile's unlimited plan is just $25 a month forever. No contracts, no hidden fees, no surprise price hikes. And if you already have a phone you love, you can keep it and your number when you make the switch to Boost Mobile. That's my kind of budget. When you're not asking your family to give up anything, you're just paying less for something you already have. So if you're looking for ways to stretch your budget as the kids are going back to school, don't let a high phone bill eat up your money that you need for something else. Go to boostmobile.com Ramsey and make the switch today. That's boostmobile.com Ramsey $25 forever requires customers to remain active on Boost Mobile Unlimited plan.

[Dave Ramsey]

Welcome back to the Ramsey Show. In the place First Fair Winds Credit Union Studio. Jade Washaw is my co host today. Greg is in Seattle. Hi, Greg. How are you?

[Caller]

I'm doing good. Actually better than I should be.

[Dave Ramsey]

Amen. How can we help?

[Caller]

Well, I'm 70 years old, retired. I have an $81,000 mortgage. Is there any reason I should not pay that off?

[Dave Ramsey]

Nope, you should pay it off and. Well, I guess there is. If you only have 81,000. Thousand. How much do you have in your nest egg?

[Caller]

About 150.

[Dave Ramsey]

Oh, that's. That's your total nest egg to live on.

[Caller]

Let's take that cash. 150. Okay.

[Dave Ramsey]

No, no, no, no, no. I said nest egg. What is your net worth?

[Caller]

Nest egg 1.8 million.

[Jade Warshaw]

Now look at this.

[Dave Ramsey]

That's what I thought. I kind of smelled that. Way to go, Greg. Congratulations. I don't guess you inherited that, did you?

[Caller]

No, I, I worked for it the old fashioned way.

[Jade Warshaw]

I earned it.

[Dave Ramsey]

Yeah, right. Check. Pay off your mortgage today, Greg? Okay, let me ask, let me ask it another way. Okay, let me reverse it on you. There's sometimes when I'm making a financial decision, I use this reverse engineering thing to Check my logic. I. Okay. You got 150 in cash on a $1.8 million net worth. I heard that right?

[Caller]

Correct.

[Dave Ramsey]

Okay. And an 81, $81,000 mortgage. Okay. So if instead you had called me and said, dave, I have a paid for home. By the way, what's your home worth?

[Caller]

About 600.

[Dave Ramsey]

Okay. I have a paid for $600,000 house with 1.8 million dollar net worth and I have $70,000 in cash. I'm thinking about going and borrowing 81,000 on my house. So I've got 151,000 in cash.

[Caller]

Okay.

[Dave Ramsey]

You wouldn't have made that call, would you?

[Caller]

No, I wouldn't. No, I wouldn't. I guess one reason I made the call is my interest rate is 3.875.

[Dave Ramsey]

Yeah, but you didn't get rich on borrowing on your home to invest. You got rich by avoiding debt and investing steadily.

[Caller]

Okay.

[Dave Ramsey]

Am I right?

[Caller]

You're correct.

[Dave Ramsey]

Because you're not a debt guy. The only reason this debt's around is because it was so cheap. You just made you think about it twice. The other debt you got rid of years ago.

[Caller]

Correct?

[Dave Ramsey]

Yeah. Yeah. That's how you got here. Because you're, you're what we call a baby steps millionaire. You follow the stuff where the principles that God and grandma talks about that you and me grew up with, only most people didn't do them even then. And you're one of the unusual ones that did. And so now you're what we call sitting pretty. Well done, sir. I'm so proud of you. Yes. Debt free. Greg's debt free.

[Jade Warshaw]

And he worked for it.

[Dave Ramsey]

How'd you get that money? I worked for it. So he's one of those guys like me when somebody says you're so lucky, you just want to smack them. Oh, yeah, no, I'm blessed, but I'm not lucky. Luck came dressed in work clothes.

[Jade Warshaw]

I know that's right.

[Dave Ramsey]

That's how it came. Luck knocked on the door and said, you got some calluses handy. Put your hand to this. And that's where that came from. It's not accidental and it's not random and it's not a lightning strike. Greg followed the age old principle of living on less than you make and investing it. I'm so proud of him.

[Jade Warshaw]

Way to go.

[Dave Ramsey]

Very cool. Very cool. Gabby's in San Antonio. Hey, Gabby, how are you?

[Caller]

Hi. I'm doing good.

[Dave Ramsey]

Good. What's up? What's up?

[Caller]

So I recently got laid off for my job. Two weeks ago. And previously before That I had last year actually I had the company closed that I was working for. They had been and I had been laid off for nine months. So I was just starting a new job and I was starting to get settled. I had moved to be closer to work and I really enjoyed that new city since I grew up in a rural area and, and I was budgeting and starting to get to the swing of things. I had even gotten a part time job for the weekend to make sure I had a buffer in my budget. And then I got laid off.

[Jade Warshaw]

What kind of work do you do that you've been laid off twice?

[Caller]

IT work. The first time it was because the company shut down again. We're based up in a rural area and it was a government job. They closed off and this time around they just decided not to move forward with me after the six month probation.

[Dave Ramsey]

Why?

[Caller]

It was due to a project that I didn't know how to do and I felt like. And I would ask the manager for help and I didn't get the help that I needed on that project and nor did I get all the information clearly for that project. So he based off my six month probation on that one project.

[Dave Ramsey]

Okay, what kind of IT work do you do?

[Jade Warshaw]

Hun?

[Caller]

That one was a network. So we're dealing with switches and things like that which when I first started I told them that I was willing to learn but I was not. That's not what I would do, help desk and other things like that. So they still hired me on even though, I mean they knew my background that I would do, you know, help desk with computers, things like that. But that was a higher level and they said okay, no, don't worry, you can learn it. Of course I wasn't. They expected me to do the project without training me.

[Dave Ramsey]

Okay, okay. The way you've approached this each time, I don't want you to ever tell anybody that again. Okay? Three times you blamed them and you took a job knowing that you didn't know how to do the job and then you did not force help and you're blaming them. Yes, they are also at fault. I don't really disagree with you, but if you're ever in an interview and you blame your former employer for not training you, you won't get the new job in the interview.

[Jade Warshaw]

You got to have some personal responsibility.

[Dave Ramsey]

Does that make sense? You follow my logic here?

[Caller]

Yes.

[Dave Ramsey]

So I want you to reframe that in your head and go, this was a bad choice. I should not have taken the job and I certainly shouldn't have settled in. Like I was gonna get to keep it forever knowing that I didn't know how to do the job and that I was, you know, there's a gap between your knowledge and your ability to perform. And that's okay. We all have that in something. But then. And this company was not set up to do that. And you're young and you're just starting your career, so you don't know yet. You're learning the hard way to be forceful on. Before I take a job doing something I don't know how, I have to be forceful about the processes that are in place to make sure I can learn fast enough so you don't fire me later. And that, that's, you know, that that's part of the interview process for you. So I think your position is simply this. You need to get another job.

[Caller]

Yep.

[Dave Ramsey]

And you learn from these last two things. Okay. I had a rule thing that folded up because it was government supported. Learn something there. Took a job I didn't know how to do, didn't work out. Learned something there. So now let's go do it again. I think you still have a good knowledge base in it and I think you land yourself a new one. Hang on. We're going to send you a copy of finding the work you're wired to do with an assessment in it. I want you to take that and, and see if this is really the stroke where you want to go with your life. And if not, if you want to go a different direction, that's okay too. But you're young and you're learning. And this is an experiment. We found two things that didn't work. Now let's find one that does.

[Caller]

Foreign.

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[Dave Ramsey]

Okay.

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[Dave Ramsey]

Well, we wish we could get to every single calling question on the show. We can't. Sorry. And there's just four lines and just three hours. I mean, all we do, we love you, we want to get to you, but we could do this 247 and still not get to everybody. But guess what? We can now because we have something that's 24 7. It's called Ask Ramsey. It's free. It's a free AI tool and it's built and trained only on Ramsey answers. AI can only spit out what you feed it. So we only feed it Ramsey and it only spits out Ramsey. How cool is that? You get an answer the same exact way we'd answer it right here on the show. Free Ask Ramsey. Ask your question [e-mail] Ask Ramsey is the tool. Or click the link in the description you're listening on the podcast or the YouTube and you'll find out exactly what we would say about that. Sarah's in Boston. Hi, Sarah, how are you?

[Caller]

I'm doing great. Thank you. Thanks for taking my call.

[Dave Ramsey]

Thank you. How come we help?

[Caller]

So I'm just wondering if I am missing anything here. My husband and I, we make about 90 a year. I do stay home with our three young kids and we have a two family house. And my mom is going to be moving in upstairs.

[Dave Ramsey]

And I think my mom was upstairs before. Who was upstairs before?

[Caller]

Before we had a renter before who was there for four years.

[Dave Ramsey]

Okay, so it is a duplex. It is a. It is actually two sets of utilities to two operating domiciles, correct?

[Caller]

Yes.

[Dave Ramsey]

Okay, cool. All right. And Mom? You're gonna let mom live up there? Is she supposed to pay your rent or what?

[Caller]

Yes. So the plan is that she would pay us 2,000amonth. My concern is that we debt is a part of our income. And long term, does that make sense? Because she is 64 and she's planning to retire next year. And I'm not sure that I'll be going back to work anytime soon. Our youngest is 1. Our oldest is 5.

[Dave Ramsey]

I don't think you working has anything to do with it.

[Jade Warshaw]

Are you saying she won't be able to. She won't have any income after she retires to pay the two the rent? Is that what you're concerned.

[Ashley]

Concerned about?

[Caller]

I think no, I think she will have the income. I'm just concerned about never being able to increase it.

[Jade Warshaw]

Okay.

[Caller]

I don't know if that's something.

[Dave Ramsey]

Okay, so 30 years from now she could be 95 and paying that. Yeah. Okay. So is she selling a home to move in there?

[Caller]

Yes.

[Dave Ramsey]

So she's going to have a big lump suit. Some. Why is she not just purchasing something for herself?

[Caller]

She wants to be close to the grandkids.

[Dave Ramsey]

Purchase something close to the grandkids.

[Jade Warshaw]

Either that or be treated like a normal renter where the rent goes up periodically.

[Dave Ramsey]

Yeah, but if she's 65, when she's 85, I wouldn't have wanted her to. If she just called, said, I want to rent for from 65 to 85, I would tell her not to do that. I would tell her to buy something for her own own good.

[Caller]

Right. So that was a thought. I had to it that she moved in temporarily as she looked for like

a condo or something.

[Dave Ramsey]

Yeah.

[Caller]

Another reason why she's moving in is to downsize because my two brothers were living with her and recently both of them moved out.

[Dave Ramsey]

Good, good. So how much is her home selling for

[Caller]

right now? It's off market. Starting off market, 765.

[Dave Ramsey]

Is it paid for?

[Caller]

No.

[Dave Ramsey]

What does she owe on it?

[Caller]

Maybe five something.

[Dave Ramsey]

Okay. All right. So she could put a 265 or $200,000, whatever down payment on something that is smaller. Maybe a 400,000, a nice condo that's near you so she can be near the grandkids and then her life is stable. She's not stable as she moves in with you unless you take the hit and don't increase the rents.

[Caller]

That's my concern.

[Dave Ramsey]

Yeah. So I think that, mom, here's what the plan is. The most you can stay here for your own good is two years. During that two years, I want you to purchase something that's good for you, for you to go forward and have a great retirement in. Because here's the thing, you tell her you talked to a financial coach and he told you that. Because I am. Okay. Because for her, if she just asked me, if you hadn't called me, if she called me and said, hey, I'm selling my house, I'm going to move in with my daughter, I would say do that only as a temporary measure and get out of there and get you a condo, three or 400,000, put down the 260, 250, whatever, get the condo paid off. So when you go into retirement, you're living in a paid for property and that stabilizes your most expensive part of living, which is housing.

[Jade Warshaw]

But I will say, I mean, I'm just. This is A caution to you. Even if you put the caveat out there that this is only for two years, the minute you welcome her in there, there's a risk associated with that. Because if she gets comfortable and you guys get comfortable and you get lack lackadaisical on your own deal, this gets messy real fast.

[Caller]

Yeah, I've already seen it in the past. And I think my other concern is she enables a lot of.

[Jade Warshaw]

Don't do it. Listen, don't do it. You've already said enough that you have misgivings about this. Don't do it.

[Caller]

Okay?

[Dave Ramsey]

Tell her to go rent a one bedroom somewhere while she looks for a house. You think this is going to go sideways. You keep saying it in different ways.

[Caller]

I'm just nervous.

[Dave Ramsey]

No, you think it's going to go sideways.

[Jade Warshaw]

You're nervous for good reason.

[Dave Ramsey]

You've observed your mother's enabling. You've observed her inadequate behaviors around money and you think it's going to end up in your lap. And you're right.

[Caller]

Yeah.

[Jade Warshaw]

Listen to your, your gut.

[Caller]

Okay?

[Dave Ramsey]

Yeah. It's not mean. Mom, I think you need to own a house. I don't think you need to be a renter. And to encourage you to do that, I want you to rent a one bedroom. I found a really cool one over here in the neighborhood. I'm going to rent mine out. You shouldn't be paying $2,000 a month for rent. I want you to rent something cheap while you look for your new house or new condo so you're not spending much on rent. I'm going to charge too much over here and it's not going to be good for you. And I'll help you and I'll coach you and we want you to be around the grandkids, we want you around. But I know it's not going to be good for you to be upstairs. And so for so many reasons. So I'm going to help you not do that. And just be kind and forceful and say no. Because you told us four different ways why you don't think this is going to work. We kept trying to say, oh, you could do this.

[Jade Warshaw]

You convinced us out of it.

[Dave Ramsey]

And then it's like, no, that's not going to. Because so you know what this is going to be. You just know what know and you want someone to say out loud. So, okay, you talk to a financial coach and they told you not to do it. I'll be the bad guy.

[Jade Warshaw]

There you go. I'll be a bad.

[Dave Ramsey]

It's Jade's fault. Tell Her, Jade, I'll take the blame.

[Jade Warshaw]

I'll take the hit.

[Dave Ramsey]

You could get the hate mail.

[Ashley]

Jade.

[Jade Warshaw]

That's okay, I'll take it. I can handle it.

[Dave Ramsey]

You know, the funniest one was the first two years I was doing talk radio show. A lady called in and she goes, we've been married three months and my mother in law's coming to visit for a week and we don't have a couch. And I said, well, you don't have any money, you can't buy a couch. And she said, yeah, but my mother in law's. I said, tell your mother in law sit on the floor. And she said, what do you mean? I said, you don't have any money for a couch. You need to be a grownup. No couch.

[Jade Warshaw]

Yeah.

[Dave Ramsey]

And she's laughing and she's like, she's not going to like that. And I said, she's going to love it. She's going to love it because she used to have to do that and she used to have to put up with a mother in law. And you be kind and you say, we got no couch because we're broke and we're getting out of debt and we're going to get a couch later. I'm sorry. We appreciate you coming to visit, but here's welcome to the camping chair, you know. And so I go out to dinner that night. Lady comes over to me and she goes, hey, I was your caller today, and this is my mother in law. And the mother in law's laughing, she goes, you were right.

[Jade Warshaw]

That's so funny.

[Dave Ramsey]

It's so awkward.

[Jade Warshaw]

Oh, yeah, that is awkward.

[Dave Ramsey]

This is my. I was your caller this afternoon. When you're doing local talk radio, that stuff happens, you know. Oh, man. How was your caller about the cow, the couch lady. And this is the mother in law.

[Ashley]

Oh, man.

[Jade Warshaw]

You told her to sit on the floor?

[Caller]

Yeah.

[Dave Ramsey]

That lady's gonna call up Jade and say, hey, I want to meet you. You wouldn't let my daughter rent to me. We'll meet you in a back alley.

[Jade Warshaw]

All right, I'm pretty strong, I can take it.

[Dave Ramsey]

You don't feel threatened, do you?

[Jade Warshaw]

No, no, she's probably. What, she's 60. I can take her.

[Dave Ramsey]

You can take her. Hey, hey, hey. Ageism, I love it.

[Caller]

Oh, that's.

[Jade Warshaw]

That's a new story. I've never heard that one, Dave. That's a good one.

[Dave Ramsey]

You knew talk radio long enough. You've done a lot of dumb things, I can just tell you. Well, that wasn't dumb. It was Just interesting, but yeah, too funny. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey, Ask your money question and get answers built on Ramsey print principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com. If you didn't know, you're more than welcome to visit us at our headquarters. Where we do the show from. We're on the glass in the lobby and generally speaking, there's 50 to 200 folks out here. Closer to 50 today watching the show. I think school's back in and we've got a big lobby, big bookstore. We've got free homemade chocolate chip cookies and coffee for those visitors. And you can sit and watch the show. We do it from 1 to 4 central time every day, Monday through Friday. Also in that lobby is Friday, our debt free stage. And guess who's on the stage? It's Kevin and Ashley. Hey guys, how are you?

[Ashley]

We're great. How are you?

[Dave Ramsey]

Better than we deserve. Welcome. Where do you guys live?

[Jade Warshaw]

We're from South Bend, Indiana.

[Dave Ramsey]

South Bend, very cool. And how much debt have you guys paid?

[Jade Warshaw]

We paid off 30,000. All right, cool.

[Dave Ramsey]

And how long did that take?

[Jade Warshaw]

12 months.

[Dave Ramsey]

Good for you. That's quick. And your range of income during that time?

[Jade Warshaw]

We started with 30,000 and at 65.

[Dave Ramsey]

Wow, way to go. What do y' all do for a living?

[Jade Warshaw]

I'm an administrative assistant for a women's

[Ashley]

ministry and I'm a full time seminary student and then I also work part time for the school.

[Dave Ramsey]

Ah, very cool.

[Jade Warshaw]

So how'd you pay off 30k? Making 30k?

[Caller]

Well, we lived in a family friend's

[Jade Warshaw]

basement, so that brought our rent down

[Caller]

and we just were on the same page and we just knew that we

[Dave Ramsey]

wanted to pay off our debt so

[Jade Warshaw]

we got a few extra part time jobs and just.

[Dave Ramsey]

But did you let

[Jade Warshaw]

lots of beans, whatever was in the basement?

[Ashley]

We had a lot of 15 bean soup.

[Dave Ramsey]

15 bean soup. Okay, well that's not as much as a 20 bean soup. There we go. Wow, look at you guys. So I mean you really, you're acting like broke college kids.

[Jade Warshaw]

Yeah.

[Dave Ramsey]

To knock out this debt. What kind of debt was it?

[Jade Warshaw]

23,000 of it was student loans. 7 was a car.

[Dave Ramsey]

Very, very Cool. Okay, so now you're free and you're continuing in seminary and you're continuing as an administrative assistant. And so the plan is to get out of seminary and go into Be a pastor or what?

[Ashley]

Yeah. So I'll graduate in about two and a half years and then would be a pastor. And then I've also talked to the school about staying on there, so. But I'm willing to serve wherever God calls me. So pastoral role would be great.

[Dave Ramsey]

Good to be available. Good to. Good for you. And educated. There we go. Both very good. Congratulations. So what put you on this track? What made you decide to go all Ramsey?

[Ashley]

Yeah. So finishing up college right after we got married. We had the debt and the car loan, and we were making payments and realized we were just making no progress. And we said, we're just never going to be done making these payments. And that was discouraging. And we had listened to her. The show a little bit, and we just said, we need to sit down and talk about this and figure out our money with a real plan. And so we got every dollar and we were like, we're just gonna go for it. And so we. We made our first budget because we said someday we want to have a house and we. We want to have thing. Some things that we want and that would be good for raising a family. And we want to go out on a date every once in a while. And so we made a budget and started. Started doing it.

[Jade Warshaw]

So what about the friend's basement? Did they approach you or you approached them?

[Ashley]

We approached them. I had known them for a while and known that they'd housed some other people who were especially looking to go into ministry. So I just said, hey, we need somewhere cheap to live. Are you guys available? And they said, yes. So that's where we started.

[Jade Warshaw]

Well, there you go.

[Dave Ramsey]

All right. Very cool. So is it. Is it cool to ask what they're charging. Charging you?

[Ashley]

Well, we're actually not there anymore, so that was. That was like the first step. We were there for a little less than a year.

[Dave Ramsey]

Okay. That knocked the dead out.

[Jade Warshaw]

So we're out of the basement now.

[Dave Ramsey]

We're out of the basement.

[Ashley]

Yeah.

[Dave Ramsey]

Okay, good.

[Ashley]

Yeah.

[Dave Ramsey]

Ashley's happy in a real apartment now.

[Ashley]

Yeah.

[Jade Warshaw]

No more basement. No more bean soup. I love that for you.

[Dave Ramsey]

Life is so much better. I like it. We're free. Okay. This does set you up, though. I mean, you guys are really. You sacrificed at a time when things were already pretty lean because you're in school, and then on top of that, you Sacrifice even more to go ahead and clear the debt so that when we can come out, we'll come out swinging. Right. And there's a lot of stuff you'll be able to do now because you don't have this weighing you down, but it was kind of an inopportune time to attack this. Agreed.

[Ashley]

Yeah.

[Dave Ramsey]

Yeah. But you both did it. Ashley, did he have to talk you into it, or did you talk him into it?

[Jade Warshaw]

At first, I was a little bit hesitant, but it didn't take very much. You're like, I'm committed to this.

[Dave Ramsey]

Yeah, let's get rid of this mess and get it behind us. How's it feel to be 100% free?

[Ashley]

It feels really great, Dave. It feels freeing. And we are able to save for a home now. And when I finish seminary, we know that we're going to be ready to move wherever God calls us to serve. So it feels very freeing.

[Dave Ramsey]

You know, as a person of faith, as a fellow Christian, I've run into this a lot over the years of people who are serving one way or another. One of the places I run into is, like, young people that want to go on the mission field, But I've got $187,000 in student loan debt, you know, and. Well, you're not going on the mission field because you already made that decision accidentally when you decided to go so far in debt, you couldn't breathe. Because on the mission field, nobody's going to give to you to pay off your student loans. They'll give to you to eat and maintain a household while you do mission work. But nobody's excited about supporting $187,000 of student loan debt. And so you really do get to live out in that setting you mentioned twice. Wherever God calls me to serve. Wherever God calls me to serve. You're living out that scripture where Jesus said it's tough to serve two masters. You will love one and hate the other. And what that means, of course, you know, as a seminary student, is that you got to make a choice, and I got to pay the bank, or I got to go where I feel like God's calling me, and I can't go because I got to pay the bank. And so the borrower truly is slave to the lender. Then you can't listen to God's voice as clearly, and. Or at least you can't respond to it as clearly as you can now that you've set yourself up in this situation. It's very cool. I'm very proud of you.

[Ashley]

Thank you.

[Dave Ramsey]

Who was cheering you on?

[Ashley]

Parents and grandparents.

[Dave Ramsey]

Really?

[Ashley]

Yeah. They. They helped us out in any way they could and they're just always there for us. And we did laundry at their house, so.

[Jade Warshaw]

That's fabulous.

[Dave Ramsey]

Yeah, very cool. Good for y'.

[Ashley]

All.

[Dave Ramsey]

Well done. Well done. Well, we're proud of you. I know they're proud of you. Congratulations. And so how long before the seminary is finished?

[Ashley]

Two and a half years.

[Dave Ramsey]

Two and a half. I think you said that, but I want to make sure I heard it. Okay. Very good. And paid off $30,000 in 12 months.

[Ashley]

Making.

[Dave Ramsey]

All right, here we go. Kevin and Ashley. South Bend, Indiana. Making. Paid off 30,000 in 12 months. Making anywhere from 30 to 65,000. And lived in the basement. Whatever it takes to get debt free. Count it down. Let's hear a debt free scream.

[Jade Warshaw]

Three, two, one. We're debt free.

[Dave Ramsey]

I love it.

[Jade Warshaw]

Well, a major sacrifice.

[Dave Ramsey]

I can't tell you how many people I know that are people of faith. Christians. You do too. We've both experienced it and watched it. That God has blessed them financially. They've done really well financially. Financially. And they let somebody live in their basement or let somebody live in their condo. And I've got one friend, he has one condo that's just dedicated to missionaries. When they're home, they just leave it open and they have a place to stay when they come home. That way they don't pay a hotel. They don't have to live in a hotel which is not as fun as a condo when they come home for three months or something like that.

[Jade Warshaw]

Just a short time.

[Dave Ramsey]

And that's all he does. It's what he does with the whole thing. And sometimes he has weird stuff happen. But most of time, the. The time it's just a great joy to be able to be generous. So that other couple with doing the same thing, living like no one else. So later you can live and give like no one else. They're on the other side of that. Letting this little seminary student couple, brand new marriage, have a place to stay for almost nothing. Not fancy, but we're not trying to be fancy. We're trying to get out of debt.

[Jade Warshaw]

Yeah. Getting the job done.

[Dave Ramsey]

And that's, you know, that's truly beans and rice only they did 20. 12 bean.

[Jade Warshaw]

15 bean.

[Dave Ramsey]

15 bean. Have you had 15 beans yet?

[Jade Warshaw]

I didn't know there were 15 beans.

[Dave Ramsey]

Well, that's not a Southern thing to make soup out of 15 beans. That's not something I've run into. We'll have to learn about that when we talk to them about it.

[Jade Warshaw]

Yeah, we will. We will have to learn about that.

[Dave Ramsey]

It's a different. When I said beans and rice, I didn't know I meant 15.

[Jade Warshaw]

That's to a whole different level.

[Dave Ramsey]

Yeah, a lot of 15 bean soup. But in the South, I guess we'd have pinto beans. Or we'd have white beans and cornbread.

[Jade Warshaw]

Black ice cream peas.

[Dave Ramsey]

Yeah, we're getting close. Yeah, we keep counting up. We might get to 15.

[Jade Warshaw]

Tuna fish.

[Dave Ramsey]

Oh, go away. Get away from me. Gross.

[Jade Warshaw]

I knew that'd get you.

[Dave Ramsey]

Oh, I always just runs a little chill down my backbone.

[Jade Warshaw]

It's a scary sandwich.

[Dave Ramsey]

I love it.

[Jade Warshaw]

Cat food.

[Dave Ramsey]

Hey, I'm proud of them. Great, great young couple. How fun is that?

[Jade Warshaw]

Way to go, guys.

[Caller]

Sam.

[Jade Warshaw]

Hey, what's up, guys? It's Jade Warshaw. Listen, summer spending adds up so fast. Between vacations and road trips and camp fees and events and all the extra gas and grocery runs, money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the EveryDollar budget app. It helps you track your spending, free up cash to put toward debt and save savings. And it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download EveryDollar in the app Store or Google Play and start for free today.

[Dave Ramsey]

Our scripture of the day, Colossians 3. 17. And whatever you do, in word or deed, do all in the name of the Lord Jesus, giving thanks to God the Father through him. John F. Kennedy said, I would rather be accused of breaking precedents than breaking promises. There we go, shooting sacred cows instead of breaking my word. I like it. Jeanette is in Pittsburgh. Hi, Jeanette. How are you?

[Caller]

I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So my husband found out about two weeks ago that he's going to be losing his job at the end of December. And my question is, should we stop contributing to his 401k now, or should we wait until his time is done before we stop contributing? And then also, what should we do

after he's done with the company?

How should we refinance or, you know, roll over that money to make money for us?

[Dave Ramsey]

Good question. We teach to always take your 401k with you and roll it to an IRA. And so what I would tell you to do is go to ramseysolutions.com and find a smartvestor pro, which is someone in the investment business that we recommend. They'll have the heart of a teacher. And then you do what's called a. When he leaves, you do a direct transfer rollover. Now what that means is that you sit with a smartvestor pro and you say, I want to put the 401k in these four mutual funds and I want to roll it over into an IRA and those four mutual funds and you sign all the papers. The paperwork is then sent directly to your husband's HR or former HR department and they will send the money directly to the mutual fund. That's called a direct transfer. You have to do it that way or you're going to get messed up. Because if they send you the check, they are required by the federal government to withhold 20%. How much is in his 401?

[Caller]

He has about 200,000.

[Dave Ramsey]

Okay. And so they would withhold $40,000. You'd get 160. But you're required when you do a rollover from a 401k to a Roth to put all of it into the 401k or into the new IRA within 60 days or you will be penalized and you don't have all of it in the scenario I'm talking about about, because they sent 40 of it to the government on withholding and you won't get it until April.

[Caller]

Okay.

[Dave Ramsey]

So don't do that. Let the money be direct transferred and pick out the mutual funds we suggest. And I personally do. Jade does Sam. Jade and Sam, Dave and Sharon put ours across four types of mutual funds. Growth, growth in income, aggressive growth and international. And I put a fourth in each, so about 50,000 in each. Now what does he make a year?

[Caller]

He is making about 48,000.

[Dave Ramsey]

Okay, what's he do?

[Caller]

He's, he's a warehouse employee, so he works for a communications company.

But he, he does, you know, doing,

taking all the stuff in and taking it back.

[Dave Ramsey]

Why are they laying over by off?

[Caller]

I think they're just looking to close down that warehouse. There's kind of a merger going on.

[Dave Ramsey]

And how long has he been there?

[Caller]

26 years.

Wow.

So they're offering him a severance. I mean he is going to get a severance.

[Dave Ramsey]

How much?

[Caller]

39 weeks severance at his current rate.

[Dave Ramsey]

Okay.

[Caller]

So at least we have that.

And then I, I, as soon as,

you know, December comes, we're going to start looking for a job for him.

[Dave Ramsey]

No, I'm hoping that we can, we're going to get a job now between now and December that starts at the end of December. But you start looking now, you know how fast Christmas is going to be here? You blink and it'll be here. Yeah, don't blink and go. Well, we got 39 weeks. No, listen, here's the plan. The day he gets laid off and they put him sign him up for the severance, a week later he starts the new job. That means you just gained a signing bonus of 39 weeks.

[Jade Warshaw]

That's right.

[Caller]

Okay, now, should we stop contributing now to his 401k and work on paying off our debt? I mean, we do have a little bit of money.

[Dave Ramsey]

Oh, you should have already done that regardless of being laid off. I'm sorry.

[Jade Warshaw]

Yeah. How much debt do you have?

[Caller]

No, we're definitely trying. I mean, I've been trying.

Well, you're not trying.

[Dave Ramsey]

You hadn't stopped it. You hadn't stopped contributing to it.

[Caller]

Well, the problem was, is I got. I let.

I was let go last year unexpectedly. And that kind of.

[Dave Ramsey]

That doesn't keep you stopping to contribute.

[Caller]

No.

[Jade Warshaw]

What Dave is talking about is the best way to pay off debt quickly is to temporarily pause your investing so that you have all of your income to throw out your debt so that you can pay the debt off as fast as possible. So in your. In your situation, no matter how much debt it is, go ahead and temper. It's a temporary pause. Right. Pay off the debt. And then once you've stacked up three to six months of expenses, now we can press play on investing again. Do you guys have any savings?

[Caller]

No, not really. I've been really just trying to pay off the debt and then, like I said, I lost my job. So we kind of got set back a little bit.

[Dave Ramsey]

How long ago did you lose your job?

[Caller]

I lost it last November, but I got a new job in January. So I've been, you know, trying really hard. My son just got married, so we were helping them with the wedding as well. So there was just a little bit of a delay there. But we are definitely back on track. Like he's gotten a second job since. We're just trying to pay this stuff

[Dave Ramsey]

off so that we can. Jade, temporarily stop all investing and saving and focus every ounce of energy you've got on reducing debt. How much debt have you got?

[Caller]

It's 13,000 in credit cards and then we still owe on our house.

[Dave Ramsey]

Okay, so only 13,000 and you're done.

[Jade Warshaw]

The feeling you've got to have. The feeling you've got to have around this is a never again feeling because you experienced the job loss last November. He's experiencing the job loss in now. And that would feel completely different if you had no debt with six months saved, wouldn't it?

[Caller]

Right.

[Jade Warshaw]

So that's, that's what you've got to tell yourself is there's going to be another storm at some point in the future. And when that happens, I'm going to be ready. I wasn't ready last November. I wasn't ready this time, but the next time I'll be ready. And that preparedness starts today. Right?

[Caller]

Okay.

[Jade Warshaw]

Yeah.

[Ashley]

Yeah.

[Dave Ramsey]

Very good. So, Jeanette, I want to reiterate because I really think you drove by this on me. Get a job. Have him get a job now. Start working on it now. Do not wait, because it's going to sneak up on him. And December is not a good month to look for a job.

[Jade Warshaw]

No, it's not.

[Caller]

Right.

[Dave Ramsey]

So September for sure. I want him to have several good leads, if not already figured out, that says, okay, I'm going to have to start late. I can't start until January because I'm getting 39 weeks severance. Unless you want to pay me for the 39 weeks I can't start at. But I really want to come to work here, and I want to come in January and he starts shopping around and looking for that position. It's going to take a little while to land something. He's not used to doing it. It's been 26 years since he went on a job interview.

[Caller]

Right? Yeah.

[Dave Ramsey]

So don't wait. Just because there's severance doesn't mean he gets to sit on his butt.

[Caller]

No, no, no.

He definitely doesn't.

[Dave Ramsey]

I know, but he's going to be sitting on his butt if he doesn't have a job.

[Caller]

I'm trying.

[Dave Ramsey]

So we got to line him up a job. He's got to be ready to. To go January 1st. If they lay him off, you know, first week of January, they lay him off last week of December. Wow. But 39 weeks of severance. So six months, seven months, eight months, which is not much for 26.

[Jade Warshaw]

It's not much. Yeah. And if you're not careful, it can make you kind of lull you to

[Ashley]

sleep a little bit. Yeah.

[Dave Ramsey]

It acts like it's a lot of money. Oh, I got eight months. No, you don't. You get to put that eight months in your pocket. Extra money to build wealth with, and turns this job loss into a blessing.

[Jade Warshaw]

That's right. The goal is not to have touch that that's the goal.

[Dave Ramsey]

That's the thing. And turn it into a signing bonus by getting your timing lined up and your dominoes lined up. And then push that in, domino.

[Ashley]

And go.

[Dave Ramsey]

Go, baby, go. Here we go. Go, go. Get it, get it, get it. Let's go. And that makes all the difference in the world. But the human tendency is to act like December's a long way away. 39 weeks is a lot of exit round.

[Jade Warshaw]

Right, right, right.

[Dave Ramsey]

I'm okay. Everything's okay. And you're going to look up and it's going to be December the next year, and you're be going, well, that's when we went through the hard patch. Because I didn't get off my butt and go get a job.

[Jade Warshaw]

Now, consider it a blessing to know.

[Dave Ramsey]

Oh, and by the way, if someone offers him a job for 75,000 this week, forget the severance.

[Jade Warshaw]

Got to go get it.

[Dave Ramsey]

Take it. That's more than your severance is going to be. Take it.

[Jade Warshaw]

Yep.

[Dave Ramsey]

He might. He might figure out he's worth more than they've been paying him for the last five years. This could be, if you treat it right, the biggest blessing has happened in years because it pushes you out of the nest and makes you go fly.

[Jade Warshaw]

Oh, yeah. You gotta. You have to believe that that's a possibility.

[Dave Ramsey]

It's as big a possibility as a crash. Yeah, but you better get after it while you can. It's good. Good stuff. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.