If You Want to Build Wealth, Stop Acting Like Everyone Else

Summary

Podcast Summary: The Ramsey Show – "If You Want to Build Wealth, Stop Acting Like Everyone Else"

Release Date: January 24, 2025

Introduction

In this episode of The Ramsey Show, hosted by Ken Coleman alongside Rachel Cruz, listeners delve into the nuanced strategies of building wealth by diverging from common financial behaviors. The hosts address a variety of callers, each presenting unique financial challenges, and offer tailored advice grounded in Dave Ramsey's proven principles. The episode emphasizes the importance of discipline, strategic planning, and proactive financial management to overcome obstacles and achieve long-term wealth.

Caller Stories and Advice

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1. Estate Planning with Wealthy In-Laws (00:57 – 06:07)

Caller: Megan from Des Moines, Iowa

Issue: Megan seeks guidance on initiating estate planning conversations with her millionaire in-laws. Despite her husband and his brother being assured of financial security upon their parents' passing, Megan is concerned about understanding the distribution of assets, which include multiple properties and a business.

Advice:

• Ken Coleman (01:24): "Sounds like you've tried and they're not interested... let us know when we're gone."
• Rachel Cruz (04:53): "Focus on what you can control. Strengthen the relationship with your husband’s brother to prevent future conflicts over assets."
• Ken Coleman (05:15): Emphasizes respecting boundaries set by the in-laws to avoid familial tension.

Notable Quote: Rachel Cruz (04:53): "You can only control what you can control... make sure that that relationship is in a healthy place."

2. Managing Significant Debt and Increasing Income (10:38 – 19:35)

Caller: River from Columbus, Ohio

Issue: River and his fiancé are burdened with $151,000 in debt, including student loans and an auto loan. Both earn $18/hour, with River recently getting a promotion to $21/hour. They struggle to manage their finances effectively and seek advice on debt repayment and income enhancement.

Advice:

• Ken Coleman (03:49): Encourages conducting a thorough analysis of their property portfolio to prepare for asset management in the event of passing or selling.
• Rachel Cruz (14:19): Suggests increasing income through side hustles or industry-adjacent work to expedite debt repayment.
• Ken Coleman (18:38): Recommends refinancing high-interest student loans to reduce financial strain.
• Rachel Cruz (16:36): Advises selling the high-interest truck to alleviate monthly payments.

Notable Quote: Rachel Cruz (14:19): "If you can find something making 25 to 40% more... it's the income problem you need to solve."

3. Deciding Whether to Pay Off Mortgage While Unemployed (24:57 – 31:27)

Caller: Madison from Phoenix, Arizona

Issue: Madison is contemplating whether to pay off her mortgage amidst a year-long unemployment period. She has $72,000 remaining on her mortgage and $4,000 allocated for housing expenses, alongside a $2,000 emergency fund.

Advice:

• Ken Coleman (25:03): Advises pausing non-essential financial activities and focusing on securing employment.
• Rachel Cruz (29:51): Recommends maintaining the emergency fund and not using additional savings to pay off the mortgage prematurely.
• Additional Guidance (26:03 – 30:18): Suggests prioritizing debt repayment while preserving cash reserves for emergencies, emphasizing the importance of stable income before making significant financial decisions.

Notable Quote: Ken Coleman (25:03): "You need to make sure you can eat and everything... I would not invest it because you guys are going to use it for a down payment."

4. Integrating Finances with a Partner from a Different Culture (32:50 – 41:39)

Caller: Bobby from Atlanta, Georgia

Issue: Bobby is marrying a woman from Scotland and seeks advice on merging finances and educating his partner about the Dave Ramsey Baby Steps. Cultural differences in financial understanding pose a challenge in aligning their financial goals.

Advice:

• Rachel Cruz (35:21): Recommends starting with shared value systems around money, such as savings, debt management, and retirement planning.
• Ken Coleman (37:00 – 39:41): Encourages collaborative financial goal-setting and leveraging existing financial stability to build a joint financial plan.
• Rachel Cruz (39:07 – 41:38): Advises using Financial Peace University lessons to educate and align both partners on American financial practices.

Notable Quote: Rachel Cruz (35:21): "Start high level with agreeing on value systems... how debt is playing into your relationship."

5. Single Mother with Disabilities Seeking Additional Income (63:54 – 73:05)

Caller: Brandi from Pendleton, Oregon

Issue: Brandi, a single mother with disabilities, aims to increase her income from $2,800 to $5,300 monthly to cover living expenses and manage debts totaling $64,000. She struggles with balancing work, childcare, and financial obligations.

Advice:

• Ken Coleman (66:45): Encourages Brandi to leverage her programming skills for freelance work to maximize income without excessive time commitments.
• Rachel Cruz (67:16 – 72:52): Recommends focusing on higher-paying freelance opportunities, eliminating unnecessary debts, and prioritizing financial stability over less profitable side hustles.

Notable Quote: Ken Coleman (81:15): "You're not being selfish. You’re being proactive in securing your family's financial future."

6. High Debt Management with Family Obligations (52:02 – 57:05)

Caller: Tyler from Madison, Wisconsin

Issue: Tyler and his wife hold $42,000 in debt and plan to sell their house to pay off liabilities while saving for a future home purchase. They seek advice on handling the proceeds from the house sale and managing future financial goals.

Advice:

• Rachel Cruz (53:22 – 57:08): Advises applying the majority of the house sale proceeds towards debt repayment and placing remaining funds in a high-yield savings account for future down payments.
• Ken Coleman (56:11 – 57:05): Supports Rachel's approach, emphasizing the importance of debt elimination before committing to new financial ventures.

Notable Quote: Rachel Cruz (54:30): "If it's not more than five years, invest. If it's more, save it."

7. Withdrawing Retirement Funds for Home Construction (57:32 – 61:43)

Caller: Kevin from Riverside, California

Issue: Kevin and his wife plan to demolish their current home and build a new one, seeking guidance on withdrawing $750,000 from retirement accounts without severely impacting their retirement plans.

Advice:

• Rachel Cruz (59:42 – 61:43): Recommends consulting with a SmartVestor pro to strategically withdraw funds, focusing on tax implications and investment impact.
• Ken Coleman (60:13 – 61:43): Emphasizes ensuring that withdrawing funds does not jeopardize long-term retirement goals and recommends careful financial planning.

Notable Quote: Rachel Cruz (59:42): "Talk to your financial planner to make sure you're doing that from a tax perspective the wisest way."

8. Overwhelming Debt with Family Struggles (73:37 – End)

Caller: Jake from Richmond, Virginia

Issue: Jake is struggling with $655,000 in debt, including a $477,000 mortgage, $62,000 in auto loans, and $25,000 in credit cards. With a combined income of $130,000, he feels overwhelmed, especially after the birth of their daughter.

Advice:

• Ken Coleman (80:33 – End): Encourages aggressive debt repayment by potentially selling assets, cutting unnecessary expenses, and increasing work hours to manage financial obligations.
• Rachel Cruz (75:18 – End): Emphasizes the importance of prioritizing debt elimination over maintaining high-cost assets and suggests leveraging financial education resources like Financial Peace University.

Notable Quote: Rachel Cruz (79:58 – 80:35): "You have to stop and I would be selling everything in sight including those cars and get your head above water."

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Key Insights

1. Prioritize Debt Repayment: Across multiple caller stories, the emphasis is on eliminating high-interest debts first, which enables greater financial stability and accelerates wealth building.

2. Increase Income Strategically: Whether through side hustles, freelance work, or leveraging existing skills, increasing income is a recurring solution to managing and repaying debt more efficiently.

3. Respect Financial Boundaries: When dealing with estate planning or integrating finances with partners from different cultural backgrounds, it's crucial to respect set boundaries and focus on what one can control.

4. Utilize Financial Education: Programs like Financial Peace University and consultations with financial advisors are recommended to equip individuals with the knowledge and strategies needed for effective financial management.

5. Emergency Funds are Essential: Maintaining and prioritizing emergency funds provides a safety net that prevents financial derailment during unforeseen circumstances.

Conclusions

This episode of The Ramsey Show reinforces the fundamental principle that building wealth requires intentional, disciplined financial behavior that often deviates from societal norms. By addressing diverse financial challenges—from managing significant debt and increasing income to navigating cultural differences in financial planning—the hosts demonstrate that tailored, strategic approaches are essential for achieving long-term financial peace and prosperity. Listeners are encouraged to take proactive steps in debt elimination, income enhancement, and financial education to secure their financial future and build meaningful wealth.

Final Notable Quote: Ken Coleman (80:52): "You need to be working like crazy... to get your head above water."

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For more insights and personalized financial advice, visit www.ramseysolutions.com.

Transcript

[Ken Coleman]

Foreign. This is the Ramsey Show. Welcome, America. We're here to help you win with your money, win in your profession and win with your relationships. Alongside the graceful, the fabulous Rachel Cruz, fresh off of her first inaugural ball, I might add. We might hear about, about that, we might not. She joins me. I'm Ken Coleman and we're here for you. The phone number is 888-255-225, triple 882-55-2225. And, and these are serious topics, but we like to have some fun. We do our best to smile, we enjoy it and coach you up because we want you to win. So it's going to be fun today. You ready to go, partner?

[Rachel Cruz]

Let's do it.

[Ken Coleman]

She's ready. Megan joins us in Des Moines, Iowa. Megan, how can we help today?

[Caller]

Hi. So excited to talk to you today. I listen every day. So this is kind of surreal. I'm looking for some advice on bringing up estate planning with my multi millionaire in laws who are unwilling to have a conversation with my husband and I but state that he and his brother will both be taken care of when they pass. How do we inquire so we know where the assets are in the event of long term care or their passing?

[Rachel Cruz]

Wow, man.

[Ken Coleman]

Sounds like you've tried and they're not interested. So I'm not sure that there's some unique strategy we're sitting on top of because it sounds like they're like, look, you're fine. We'll let you know when we're gone.

[Caller]

Sounds like yeah, essentially, yeah. They said 50. 50, you know, it's just my husband and his brother and he said, you know, you're taken care of.

[Ken Coleman]

Let me ask you this, what is it that you all want to know? Let's just assume that they were like, sure. What is it that you're looking to discover?

[Caller]

Well, mostly there are multiple properties involved as well as a business that my father in law owns. And we have no idea because we're not in that specific field what we would need to do in the event of, you know, potentially selling that or his passing. So, yeah, that's our major concern.

[Ken Coleman]

All right. So that reveals the answer to my next question, Rachel, is going to be why? Like why do you want to know what it is that you want to know? And it seems like you guys are trying to be thoughtful, strategic.

[Advertisement]

Yeah.

[Rachel Cruz]

And how have the conversations gone so far? Because you obviously know that they're not interested in talking about it. So who has brought them, who has brought up the idea of having these conversations to Them.

[Caller]

So my husband has brought them up. He is the oldest, and we have a young family, so he's kind of more thinking about the future for those reasons. And they've also made it very clear that they do not want me involved in that conversations.

[Rachel Cruz]

Why?

[Caller]

So that throws another added bonus. Well, I'm not sure.

[Rachel Cruz]

Do you have a good relationship with them now?

[Caller]

Barely. I mean, we're not best friends, but it's not, you know, adversarial.

[Rachel Cruz]

And what about his brother? Is he married?

[Caller]

He is not.

[Ken Coleman]

Okay, I think you got to take a sign here. And I want to go back to my line of questioning.

[Rachel Cruz]

Yeah.

[Ken Coleman]

So to the best of your ability, you guys need to just run a scenario. Feels like to me where you go, all right, let's say they give us this property and that property. What would we need to know to be able to be prepared to make the most of that? Go ahead and run that exercise out. You don't need to know which ones. If you know the whole portfolio and you know, that you could get. And I'm. I mean, let me. Let me just walk you through this. How many properties are we talking about total?

[Caller]

3 properties. 2 are rentals, 1 is a, you know, a main home in which they live in, and the total is about 2.5 million.

[Ken Coleman]

Okay, great.

[Caller]

And they are owned assets.

[Ken Coleman]

Go do your homework on those three properties. What is it that you feel like you would need to know if you were to come into ownership today? Whatever you told us your concerns were, go ahead and figure that out.

[Rachel Cruz]

Yeah, and I think, too, Meghan, you know, you can only control what you can control. They're not. They're. I mean, you guys have kind of asked them, and they're not going to give it. So. Yeah, like Ken said earlier in the call, we don't have some secret, like, line to give you that suddenly they decide to tell you everything. So what I would do, what I can control. If I was in your scenario and this was my parents is my sibling, because that's where the. That's where the. The butting heads could start to happen. The fractured relationships, it's not the parents, because if they're gone, they're on. Who's left is him and his brother. So if I were him, I mean, I would get in a room with his brother and be like, hey, let's just play. Like, to your point, let's play out some scenarios just so we're. We can. So we can plan out as much as we can with the information we have. And then. And Then that's all we can do. I mean, so I would just make sure that that relationship is. Is in a healthy place. Because the calls that we do get a lot on here are when a family member dies and it's handed off to siblings and their adult siblings with other kids, it starts to get messy and all this. So if you can shore up that relationship, that's. That's what you can do. But, yeah, you. I mean, we can't. You can't force them to tell you guys.

[Ken Coleman]

And. And we're on Team Megan. Okay, Megan. So take this the right way. I'm on your team, okay? They've made it clear for some reason, and I'm not a therapist and nor am I a mind reader, but it's pretty clear to me that they've made it clear that they don't want you involved. So they're feeling something whether you did something or not. That's not the point. The point is they've laid out a boundary, I feel like. And it doesn't matter why. We don't know. And you may not know, but you need to respect the boundary because it's only going to create, what Rachel is saying, some tension. So you need to go, you know what? A, they're not my parents. B, they've made it clear to my hubs that they don't want me involved. So you know what? I'm not involved. And that would be my advice from a relationship standpoint. Let this go. Because I can tell you that we can feel it on you right now. There's some angst that you have. You can hear it on you, because this is irritating to you, and that's okay. But you got to deal with that because you don't have any control. Rachel nailed that. So sorry we can't give you a hack. I mean, other than, you know, hiring some former CIA operatives.

[Rachel Cruz]

And I think, you know the family money dynamic, you wanna. You wanna wade in carefully, especially as an in law. And like, my in laws are so wonderful. They. They are very open with us. And every other year we get together as a family. And his dad has even said to the in laws, like, I want your thoughts and opinions. I mean, he's. I mean, they're. They're very kind in that way, but I still am very aware I'm not their kid. Like, like, like there's. You know what I mean? Like, there's still a. And even, like, I think even within the Ramses, like, they know everything. And. And again, mom and dad would love and appreciate and respect the opinions of the in laws for sure. But there's still just that small level of just social awareness of like, okay, these are not my parents or you know, I'm the in law that I think is appropriate too. I don't know, maybe people disagree with that. But I think there's a level of like when you are their kid in blood, there's, there's a, a level of holding that they have that an in law never will.

[Ken Coleman]

Yeah. I mean, did what, what went off in your head when you heard her say, they've made it clear that they don't want me involved. I'm just curious. Your female intuition and also your professional intuition, what did you think?

[Rachel Cruz]

That it's obviously not a great relationship.

[Ken Coleman]

That's what I thought. Because then you asked her and she said fairly.

[Rachel Cruz]

It's okay.

[Ken Coleman]

Yeah. When someone asked me, if you asked me, do you have a good relationship with somebody and if I drop fairly.

[Rachel Cruz]

On you, you know, it's probably not going well.

[Ken Coleman]

I don't think it's great. It's certainly not great. And I think there's so many.

[Rachel Cruz]

And I will say though too fairly. I will say too.

[Ken Coleman]

It depends on the day.

[Rachel Cruz]

The, that generation, the parents generation too is a more private generation. Right. You think about late boomers even into the generation you know before them, like so, so, so in her defense, they could just be very private people.

[Ken Coleman]

I agree.

[Rachel Cruz]

That don't feel comfortable regardless of whether they have relationship or not.

[Ken Coleman]

And her reasons were to say. But I think, I think they can get their. The reasons why. I think they can plan for it either way. You know, it's fun. People call us like this. They want to know what we think. But you know what? We want to know what our audience thinks. We have a new audience coming in all the time, growing audience. And it's really important if we're going to serve you that we hear from you. So our listener survey, it's an annual thing we do. We need to hear from you. We really do serve you well. We want to hear from you. So tell us what you like, what you don't like. The whole nine yards. Be nice to Rachel. You can be mean to me. It's okay. Text the word survey to 33789. Text the word survey to three three. Or go to ramseysolutions.com survey and you can click on the link in the show notes on your podcast app or YouTube. And here's the deal. If you sign up today to tell us what you think you're entered to win a $500 gift card. So there's a little bonus of motivation. All right, we want to hear from you, America. Quick break and then you hear more of us. This is the Ramsey Show.

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[Ken Coleman]

Welcome back to the Ramsey Show. I'm Ken Coleman and Rachel Cruz is joining me. We're here for you, America. You got a question about your money, Got a question about your income. That's what you got today. You got two people love to weigh in on that and we work together to help you. So triple 882-55-5225. That's the number. Let's go to River. Now, see, that's a great name. If my name was River Coleman, I'd be far more credible.

[Rachel Cruz]

You know, see the success, so much more.

[Ken Coleman]

I have a lot more Instagram followers as well. But alas, my name is Ken, but I'm already jealous. River in Columbus, Ohio River. I'm jealous, but happy to talk to you. How can we help?

[Caller]

Hey, what's going on, guys? So, yeah, I kind of have a mess. I'm 20. My fiance is 23. Together we have roughly $151,000 in debt. That's between student loans and an $18,000 truck auto loan.

[Ken Coleman]

That's it? Just the student loans and the truck?

[Caller]

Yes.

[Ken Coleman]

Okay.

[Caller]

Okay, that's it. I. My student loans, I have, I think it's like 33,000 and the rest is her. I think she has like a hundred and twenty some thousand. But yeah, it's confusing. It's all through Sallie Mae.

[Rachel Cruz]

Yeah. What is. What was her degree in?

[Caller]

So she's a multimedia journalist. She's a news reporter at a news station in West Virginia.

[Rachel Cruz]

What did she get her degree in? Mass media, Multimedia. Did she go. Yeah. Did she go out of state to a private college? What'd she do? Where did she go?

[Caller]

She did. Yeah, yeah, yeah, she did.

[Rachel Cruz]

And how much is she making now?

[Caller]

So she's making 18 an hour. I'm making 18 an hour and I'm. But her commute is like an hour and 20 minutes.

[Rachel Cruz]

Okay, so how much are you guys bringing in a month after taxes? Like what's hitting your paycheck right now or like what's hitting your bank account? You guys together?

[Caller]

So together. So we aren't joint accounts yet. So right now, my situation, I'm bringing in roughly $2,400 a month. She's around the same.

[Rachel Cruz]

Okay, what are you doing for work?

[Caller]

So I work at a credit union and. Yeah.

[Ken Coleman]

Okay, what do you want to do? What are you aiming for?

[Caller]

You know, I'm not really sure. I'm still in school. I'm a junior in college right now getting my bachelor in business administration. I'm paying this semester out of pocket, trying to cut good. The loans out.

[Ken Coleman]

And the reason I asked the question where I'm not trying to solve that problem right now, but I am trying to figure out what do we. What can we do to get more income?

[Rachel Cruz]

Because that's a part of this equation she's not making.

[Ken Coleman]

I mean, neither one of them.

[Rachel Cruz]

Yeah, I mean, I mean.

[Ken Coleman]

Yeah, yeah, you're very limited right now, and that's a part of this equation.

[Caller]

Yeah, and I did just get. I did just get a promotion too, so I'll be making 21 an hour starting in the middle of February.

[Ken Coleman]

Okay, so help Rachel out. She'll walk you through this. But I know you guys are. What is your debt? What is yours. Is yours 155? Or is that both of you?

[Caller]

That's, that's together.

[Ken Coleman]

You guys aren't together. And so just to help Rachel separate what your debt is versus the fiance's.

[Rachel Cruz]

Debt, well, yours is 33, 000 student loans.

[Ken Coleman]

Right.

[Rachel Cruz]

Or hers is 120.

[Caller]

Mine's 30. Yeah, mine's 33. Student loan 18 truck.

[Ken Coleman]

Okay, I got that part. I misunderstood. Okay, got it. Nevermind. All right, so we got, we got the breakdown.

[Rachel Cruz]

Yeah, but is she making close to what, 30,000? That's where. That's what I'm trying to understand. Like.

[Caller]

Yeah, yeah, she's making roughly, like $31,000.

[Rachel Cruz]

Okay. So I mean, here's the fast track of it all, which you're probably not gonna like. But if number. If getting out of debt is your number one idea, she ha. You guys both have to make more money. And if this is her dream and what she wants to do, she. Is she only on air for a certain amount of time? Like what are her hours? Is she an early morning anchor or a reporter?

[Caller]

You said she's midday.

[Rachel Cruz]

Midday.

[Caller]

Midday. She's nine to six.

[Rachel Cruz]

Okay.

[Ken Coleman]

No money in that industry at this point.

[Rachel Cruz]

Well, that sounds, I mean, like, I don't know, for a short term there's a shift and you go find something making 45. Right. I mean like you're just like even $15,000 more with a side hustle, which I know crushes her dreams. And this is, this is not to pick on your wife, river, or you, but America, this is, this is what we're talking about. We talk about student loans. She took out a hundred and twenty thousand dollars in student loans to make thirty thousand dollars a year.

[Ken Coleman]

Yeah. With very limited opportunity.

[Rachel Cruz]

I mean, I mean honestly. And so there is a, there, there is a, a lesson to be learned always. But for you guys, I mean, you're in it now, so obviously you can't go backwards. So I mean, if I were her, I'm like, you know what? I'm, I'm gonna do anything for two to, two to three years. It's actually cleaned up.

[Ken Coleman]

So river, is she, is she one? And by the way, do I understand this and support this? Yes. Is she one that goes. I want to take my shot and I want to go to New York, Louisiana. I want to be in a top 10 market one day. Is that her thing? Is she really ambitious for that? Is that a clear goal?

[Caller]

She really is.

[Ken Coleman]

Okay then. So that means. So here's my point. So if she were, if she were, if I were coaching her one on one, I'd say, all right, so you do have to stay in the game. However, you are going to have to work other jobs, do some freelance publicity, do something when you're not on set. To increase her income. She's got at least look for a 25 to 40% bump through some type of industry adjacent work in this season. Yeah, I don't, I wouldn't recommend she drop out. If her goal.

[Rachel Cruz]

Yeah.

[Ken Coleman]

Is to do that, is to move up in market. Which by the way, that's how you make more money, is you go from Columbus to San Diego.

[Rachel Cruz]

Well, you go from reporter to anchor. I mean like there's like. Right.

[Ken Coleman]

There's the ladder.

[Rachel Cruz]

Yeah, for sure.

[Ken Coleman]

But that takes time and they're limited positions. That is a. Hang on and be really, really good at your job.

[Rachel Cruz]

And I would go. I mean, I could be wrong too, but I feel like that's a hard industry to have any level of freelance. You may better waiting tables from. That's from seven.

[Ken Coleman]

Yeah, I'm just throwing ten a night.

[Rachel Cruz]

You know what I mean? Like. Yeah, yeah, yeah. So. So it's just. It's the income problem, river, for you guys. I mean, you just have to up your income.

[Caller]

It absolutely is. So. And here's a question. So the loans, her loans are broken down to like four or five different loans, and they. $22,000, $20,000. They're attached with a12.12% interest rate. I was thinking, you know, it's probably best to, you know, refinance these loans, get it consolidated and, you know, kind of go that route.

[Rachel Cruz]

Yeah, you can for sure. I mean, I would say that's the only type of debt. I would recommend consolidating our student loans because you usually don't go back into that debt. A lot of people play this game because I think math is their problem and interest rates are their problem, but their problem really is. It's. It's the behavior. Right. The. The secret of getting out of debt is not the smaller interest rate, even though can help you to a degree. The real secret of getting out of debt is this intensity, this gazelle intensity we talk about where it's like, no lifestyle, nothing. You're working insane amount of hours and you just get it paid off. Right? And so I think that I. So I wouldn't put a lot of hope, but again, I would. Yes. If you guys can get a better interest rate, again, it's the one type of debt I would be okay with you guys consolidating, but don't have your hope that because you consolidate, it's gonna be. It's gonna be okay. Do you know what I mean? Like, that there still needs to be that level of grit with you guys in this because.

[Caller]

Oh, absolutely.

[Rachel Cruz]

Yeah. Yeah. But yeah, if you. If you get a better interest rate, for sure. River, I think that that's a. That's a fine move. But again, math is usually not the problem. And I always want to reiterate that when we're getting out of debt, it's not that it really is this. This hope and who you guys are as a couple and teaming up and saying, okay, this is what our life's gonna look like for the next three Years.

[Ken Coleman]

Yeah, I appreciate the call, River. And again, you guys can do this. It is not easy.

[Rachel Cruz]

Yeah, but it is simple for sure. And I mean to, to just loosen the burden a little bit. That $18,000 truck, it's right on the border of selling or not. But if you can. If you can get that down, even if you're. Even if you're underwater. 2 to 3,000 and go get a beater. I mean that's just. That's taking a chunk off too. So be careful.

[Ken Coleman]

We didn't ask, but if you look at the data, Rachel, I believe the number is the average car payment in America right now is like north of 750.

[Rachel Cruz]

A new one is. Yeah, 781.

[Ken Coleman]

So let's just play off of that. So seven. Let's just imagine that his car payment is somewhere between 5 and 700. I don't think that's a stretch.

[Rachel Cruz]

No, no.

[Ken Coleman]

That's a massive raise for a young man like this who's about to get married.

[Rachel Cruz]

That's right. That's right.

[Ken Coleman]

If you split the difference and go 600, I don't have to take my boots off to add this one. That's 7, 200 a year. 600 times 12. Yeah. You know, I don't have to use my digits. I can do that quick multiplication. I paid attention. I paid attention to that level.

[Rachel Cruz]

Old man Ken jokes.

[Ken Coleman]

Yeah, I know you like them. Once you get them.

[Rachel Cruz]

I know we get.

[Ken Coleman]

Once you get them.

[Rachel Cruz]

Good.

[Ken Coleman]

She likes them. Sometimes we need it during the commercial.

[Rachel Cruz]

River, we're cheering for you all.

[Ken Coleman]

Come on, River.

[Rachel Cruz]

You can do it.

[Ken Coleman]

Keep on flowing. This is the Randy Show.

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[Ken Coleman]

Welcome back to the Ramsey show alongside Rachel Cruz. I'm Ken Coleman. We're thrilled to have you with us. The phone number to jump in is 888-255-2225. Today's question of the day is brought to you by. Why Refi? Why refi Refinances defaulted private student loans. Defaulted means when the borrower cannot make the required payments. So if that's you and your student loan, contact Y refi, they can offer a low fixed rate loan built for you. Go to yrefi.comramsey right now. That's the letter y r e f y.com ramsey it may not be available in all states.

[Rachel Cruz]

Today's question comes from Chase in Missouri. I'm new to investing and was playing around with the investment calculator on your website. I found that if you invested $1,000 for my B for my baby at 10% and never put any more in, she could retire at the age of seventy with over a hundred one million dollars. Not one hundred million, one million. Is that right? And if so, why isn't this common practice? I don't have my investment calculator pulled up, but over 70 years. Are you gonna pull it up, Kim?

[Ken Coleman]

I'll do my best.

[Caller]

Yeah.

[Rachel Cruz]

Do yeah. RAMSEY investment CALCULATOR Yeah, I mean, I mean compound interest is powerful. In over 70 years, I probably wouldn't be surprised if you put no more in at 10% of a rate of return. And so why isn't this common practice, you ask? Well, I mean, there's maybe a couple of reasons. One, I think parents have don't have a thousand dollars to put in. I think there's a level of margin that people are trying to find. I mean, also, you know, when you are investing for a child, you know, the recommendation of you having to be really over it because a minor can't open up their own account. So it'd be your name in it. And you know, being able to transfer it to them long term is an option too. So in investing, I would say too 960.

[Ken Coleman]

So here's what we got. I put in current age of one. He may be thinking zero. But you know, I just did quick numbers. Retire at 70, you only put $1,000 in and you never contribute monthly. And you're on this number, you are getting an annual return of 10%. So I could drop that to 8% for the cynics and let's see what that does so it's a lot different. 245,000. So there you go. But, yeah, the question holds, why don't more people do it? Because they don't understand compound interest. How many years they have we taught that simple lesson of compound interest, you know, and it just. Most people don't even think about it.

[Rachel Cruz]

Yeah. And I think in investing overall, it can be an intimidating factor of money. And if you don't feel like you fully understand it, you're less apt to probably go into that world, I would say. But there. Yeah, there's power in that. And then always, you know, I think about 40% of Americans can't cover a 400 emergency in cash. So to have a thousand dollars that's not for you and your emergency fund, you know, there's a lot of people that don't have it. But I agree with you. I mean, chase that. Yeah.

[Ken Coleman]

By the way, I adjusted the number to zero. I didn't know if the thing would let me do it. So a newborn baby, it would get to $1,065,261 at the age of 70 at a 10% annual return. So there you go.

[Rachel Cruz]

There you go. It was correct.

[Ken Coleman]

You know, I usually let the money personalities do that, James, but I feel pretty good there after a test run right there under pressure. I'm so proud of you.

[Rachel Cruz]

I'm glad you did it.

[Ken Coleman]

I'm having fun with this, folks, because if I can do it while hosting a show with my squirrel running around in my brain, you need to be going to ramseysolutions.com and start plugging it in. Use the investment calculator. Imagine how much fun you can have with it when you're not hosting a show while doing it. So it's great. I think that was a wonderful exhibition there. Madison is up in Phoenix, Arizona. Madison, how can we help today?

[Caller]

Yeah, My question is, first of all, thank you for taking my call.

[Ken Coleman]

Of course.

[Caller]

My question is, should I pay off my house while continuing to look for work?

[Ken Coleman]

Tell us about the look for work first. And what is your. What is your bridge right now as far as income yet savings you're living off of. Give us a quick.

[Caller]

There is no income.

[Ken Coleman]

Zero income.

[Caller]

No income.

[Ken Coleman]

Okay.

[Caller]

Correct. I had been out of work almost a year, so I had set money aside. I've been following the Ramsey program. I set money aside enough to get me through whatever I needed to get to. And that year is coming up. So I have.

[Ken Coleman]

Have you been paying off your house through that emergency fund that you had set aside?

[Caller]

Meaning that was just how. That was just money for housing and bills. I have a separate emergency fund as well.

[Ken Coleman]

Oh, okay. So what I'm asking you, though, is. I'm just curious. That money you had set aside, had you been paying your house payment? Paying. Paying it off or working on that up until this point through that fund?

[Caller]

Yes. Ah, yes.

[Ken Coleman]

Well, no, I wouldn't be doing. I would. I mean, we would tell you to slow down, pause everything. You got to get some employment here. I love that you had a. An extra rainy day fund.

[Rachel Cruz]

Yeah. How much do you have saved, Madison, Total?

[Caller]

I have. Let's see, what were the numbers here? I have about almost $4,000.

[Ken Coleman]

That's your emergency fund.

[Caller]

Well, so there's 1,900 left for what I had just for the housing expenses.

[Ken Coleman]

Right.

[Caller]

And then I have $2,000 in an emergency fund. I just broke it down individually.

[Rachel Cruz]

Okay. And you asked if you should pay off your house. How much is left on your mortgage?

[Caller]

72,000.

[Rachel Cruz]

What would you pay it off with? Are you saying it putting extra towards your house above the mortgage?

[Caller]

No. Paying it off?

[Ken Coleman]

No. That's the right question, Madison, you don't have any income.

[Rachel Cruz]

Well, I don't. Well, where would you get the 72,000 to pay it off?

[Caller]

So that. What that's in. I have enough to pay it off as well.

[Ken Coleman]

Okay, you buried the lead. So you have $72,000 somewhere else?

[Caller]

Yes.

[Rachel Cruz]

Okay, how much money do you have total? Like, what's your net worth? Cash? Sorry. Not net worth, just cash.

[Caller]

Okay, So I don't have a calculator from me. So I have seven. 2000, 1900 and 2000.

[Rachel Cruz]

Okay. Where is the 72,000 currently? Is it investments or just a savings account?

[Caller]

It's in savings.

[Rachel Cruz]

Okay. What were you going to use that for? What was that fund for in general?

[Caller]

I had designated it for. I had it designated in separate accounts. So say, for example, I needed a card. I could pay off a car.

[Rachel Cruz]

Okay, so you had that. Do you have any retirement?

[Caller]

I do.

[Rachel Cruz]

How much do you have in that?

[Caller]

About 250,000.

[Rachel Cruz]

Okay, good.

[Ken Coleman]

How old are you?

[Caller]

I'm in my mid-50s.

[Rachel Cruz]

Okay.

[Ken Coleman]

Okay. That. That's going to be okay. If you were to never touch that, that, you know, by the time you're in your 70s, that's going to be a really nice number. Here's what I'm confused about, Rachel. Madison, why aren't you working? I understand it's hard sometimes to get back into the market, but to go 12 months with zero income doing something and you're whittling down these other two accounts. I. I'm just not. I don't understand why. Why you're not working.

[Caller]

That's what I don't understand either.

[Ken Coleman]

No, no, no, no. Let me rephrase. What field were you in?

[Caller]

Medical. And I also have a degree in law enforcement.

[Ken Coleman]

What were you doing? What was the last job you had? 12 months ago?

[Caller]

I was working in the medical field.

[Ken Coleman]

Doing what?

[Caller]

As an administrative. I held an administrative role.

[Ken Coleman]

Making. How much?

[Caller]

Around 50,000 a year.

[Ken Coleman]

Okay, my point is, you don't sit around. And not that you're sitting. Let me. Let me rephrase that. You don't just keep applying and do all this, and if nothing's happening, you don't just keep pulling money out of the savings account. I'm proud of you and glad you had it, but you need to start to happen to life, and life is happening to you. I don't understand what that skill set. Why you aren't applying for multiple different types of jobs. I don't care if it's a shift manager at Home Depot or at Banana Republic or. Or I'm driving. I'm doing something. You have got to be bringing in income, because I guess you don't need a whole lot. Like, what is your. What do you need to actually survive each month to cover your bills? We only got about a minute, so give me a real quick answer.

[Caller]

I would say $1300.

[Ken Coleman]

You need $1300 to. To survive.

[Caller]

Correct.

[Ken Coleman]

Go make $1300 in February. Doing something now. I want to bring it back to Rachel to answer the bigger question. She's got 72,000 in the bank.

[Rachel Cruz]

No, I wouldn't. Until I have a stable income coming in.

[Ken Coleman]

I agree.

[Rachel Cruz]

Yeah.

[Caller]

Okay.

[Rachel Cruz]

Yeah. To make sure that you can eat and everything, but yeah, I would. You know, you've set yourself up really well, Madison, and I just don't want you to. To continue to be in this rut that you've been in to a degree, for. For a year. Because what's happening is it's just like everything's shrinking, shrinking, shrinking, shrinking, shrinking, shrinking. And I want to stop that momentum and let it go the other way. And to Ken's point, it's not like a crazy amount. 1300 bucks.

[Ken Coleman]

That's the great.

[Rachel Cruz]

You can do this, Madison.

[Ken Coleman]

And. And you know what? There's lots of things that you can do. Hold on the line, Madison. Can we give her a copy of my book, the Proximity Principle? Read this and do this and go get paid. This is the Ramsey show.

[Rachel Cruz]

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[Ken Coleman]

Welcome back to the Ramsey show alongside Rachel Cruz. I'm Ken Coleman and we're here for you, America. Thank you for being with us. Hey. We just had a wildly successful virtual event last night and that leads me to tell you we are coming back with part two of what was a successful event last year. It's a two night virtual event known as Investing Essentials. This is with Dave Ramsey and George Camel. This was a wildly successful event last year because people know that investing Rachel, is very confusing. It's intimidating. And so in this event, we're gonna cover everything through the maximizing your 401k and mutual funds. And then Dave is gonna give his personal playbook on how he invests in real estate. So this is not an Instagram reel with eight cuts and cool music designed to get you to click a link. This is a tried and true investing strategy that Dave has done for many decades. So that's also a popular part of this. It is happening March 4 and 5. So put that on your calendar or go ahead right now to ramseysolutions.com events ramseysolutions.com events and you can sign up. Tickets start at $199. March 4 and 5. So that will be fun. Love to see you there. All right. Bobby's up in Atlanta, Georgia. Bobby, how can we help today?

[Caller]

Hey, guys, how are you?

[Ken Coleman]

Good. How are you doing today?

[Caller]

Doing all right. So my fiance and I are getting married in April.

[Ken Coleman]

All right.

[Caller]

And she.

[Ken Coleman]

Thank you.

[Caller]

She was born and raised in Scotland and she still lives there. So we've been long distance for about almost eight years.

[Ken Coleman]

Where in Scotland?

[Caller]

She's on the west coast, so she's.

[Ken Coleman]

Basically right on the water about 40 minutes from Glasgow.

[Rachel Cruz]

Wow.

[Ken Coleman]

Love Scotland.

[Rachel Cruz]

Are Y'all gonna move there?

[Caller]

Yes. No, she's actually moving here to Georgia.

[Ken Coleman]

Well, she's really trading it downgrade for her. Bobby, you must be a very convincing or charming young man. Maybe very handsome, too. I do my best. Or at least I fooled her. Well, that's right. Hey, real quick question, and we'll get down to the important stuff, but America wants to know, is the wedding in Scotland, and are you going to wear a kilt?

[Caller]

I. So, yes, it is in Scotland, and it's basically.

[Ken Coleman]

It's right on one of the locks.

[Caller]

There, and I am not wearing a kit.

[Rachel Cruz]

How many kilts will be at the wedding, though?

[Ken Coleman]

I'm a little.

[Rachel Cruz]

No, I bet a lot of the attendees will wear kilts. True.

[Ken Coleman]

Actually, you would.

[Caller]

You would be surprised because half of her family is English, and of course, all of my family is American, and.

[Ken Coleman]

So there's only probably going to be 25% of the people, they are wearing kilts. Well, you know, I'll take it. And Bobby, I know I'm not getting an invite, but if I was to be invited, the Coleman line of the.

[Rachel Cruz]

Crest or your pat, your, like, the.

[Ken Coleman]

Plaid, I would wear one. I really would. With the high socks, I'd commit to.

[Rachel Cruz]

The whole bagpipe down the. Down the aisle.

[Ken Coleman]

That's great. All right, well, we are. We are having bagpipes down the aisle.

[Caller]

So there is that.

[Ken Coleman]

Bobby, listen, I could be talked into hosting the reception. Email my team. We'll talk about it. We'll see if we can make it work.

[Rachel Cruz]

All right.

[Ken Coleman]

Bobby, this is great. So you guys grew up different money, culture, the way you looked at.

[Rachel Cruz]

No.

[Ken Coleman]

Well, that's what he said.

[Rachel Cruz]

No, he said that she grew up in Scotland.

[Ken Coleman]

It's different.

[Rachel Cruz]

Okay, so what's your question, Bobby?

[Ken Coleman]

She's correcting me. I knew where he's going.

[Caller]

So, yes.

[Ken Coleman]

She. She doesn't know what a 401k is.

[Caller]

Doesn't know what a Roth IRA is.

[Ken Coleman]

Again, different culture.

[Caller]

She's sort of familiar with the baby steps, just from what I've talked to her about it, and she knows who Dave Ramsey is. But we're. I'm trying to figure out what's the.

[Ken Coleman]

Best way to kind of get her.

[Caller]

On board with the baby steps and kind of. She's a little bit nervous or hesitant.

[Ken Coleman]

About the intensity of the baby steps.

[Rachel Cruz]

Sure. Okay.

[Caller]

So there's that and then the culture.

[Rachel Cruz]

Yeah, for sure. Okay, So I would start high level with you guys and just being agreeing on value systems at which money will play in on the relationship. So A value system would be, you know, when we have money, or do we want to be giving some of this money? Is that part of our plan? Do we. How much, you know, is savings something that she gives her a level of security? Right. Is there. We want to.

[Ken Coleman]

Is that a tool or is it a disease?

[Rachel Cruz]

Yes, yes. How is debt playing it? So less like I would go less baby steps and more just a little bit of that value system, because that's a human thing, not an American thing. So you can look at money because they have money in Scotland. So it's just like, sure, let's together get off.

[Ken Coleman]

Do they have money over there?

[Rachel Cruz]

And then, then thank you for revealing how we implement it over here. How does that look? So if we both agree, yes, savings is important, she may be more of a spender, naturally. Right. And that's okay. Opposites attract. But yes, we want to be saving for the future. We want a good retirement. So what's the best way to do that in America? A 401K, a Roth IRA. Right. These, these vehicles at which you can do that. And if we have debt and we want to live without debt and not have payments because that gives us peace and because we can use our income to go on great vacations and use our income to save for the future and to give. Like, that's why we want to be out of debt. Right. So you kind of start high level and then from there the baby steps is just a plan to get you from point A to point B. Yeah.

[Ken Coleman]

Do you guys have debt? Right? We.

[Caller]

We do not.

[Rachel Cruz]

We are debt free. That's great.

[Ken Coleman]

So that fast forwards everything for sure. So now it's emergency fund.

[Rachel Cruz]

Yeah.

[Caller]

Right.

[Ken Coleman]

Right out of the gate. When you guys get married?

[Rachel Cruz]

When you got. Yeah. Is she on this? Is she agreeing that you guys want to work together as a team? Like, does she see this as a topic of life to say, like, joint bank account? Yeah, absolutely.

[Ken Coleman]

We're gonna, we're gonna do pretty much everything together.

[Rachel Cruz]

Okay. Yeah.

[Caller]

And kind of right now she's kind of the breadwinner. I'm. I'm currently not employed because I'm. I'm finishing up my flight instructor rating.

[Rachel Cruz]

Nice.

[Caller]

And so I'll be a flight instructor pretty much immediately after we get married, but.

[Ken Coleman]

Right. Or. Yeah. Right. What will your, what will your starting salary be? Do you have any idea?

[Caller]

So it's going to be an hourly position, but ballpark, I'm hoping around 50 grand.

[Ken Coleman]

Good. 35 would be like the absolute, absolute low.

[Rachel Cruz]

Okay. How much she'll she be making?

[Ken Coleman]

We don't know yet.

[Caller]

Just because we don't know what she's going to be doing.

[Ken Coleman]

What's her profession?

[Caller]

Yeah, so she has, she has a degree in international event management. So that kind of means she can do weddings, she can do, you know, corporate events.

[Ken Coleman]

Let me tell you something. Atlanta, if you guys are anywhere near the Atlanta area, that's a big event town. So that's good news. It's good news for her.

[Caller]

Yes. And so she's, she's done everything under the sun, whether it's social media or.

[Ken Coleman]

Event planning or serving.

[Caller]

Like, we're totally not worried about her finding a job.

[Rachel Cruz]

Amazing. Okay, so how much are you guys.

[Ken Coleman]

Kick your coverage buddy?

[Rachel Cruz]

How much are you guys bringing in to the marriage? Just money wise, like, how much does she have? How much do you have?

[Caller]

So I on my side, we have about 38,000 in savings, and that comes from an inheritance.

[Rachel Cruz]

Okay.

[Caller]

And she's bringing probably over just shy of 10.

[Rachel Cruz]

Okay.

[Caller]

But both of us have very little expenses because we both live with our parents right now. And it just didn't make sense for us to move into apartments each and then have to move again.

[Ken Coleman]

I love that.

[Rachel Cruz]

That's great. And so when you guys get married, I guess you'll be renting probably for a year or two. Is that what you're thinking?

[Ken Coleman]

Yes.

[Rachel Cruz]

Yep. Okay.

[Caller]

That's the plan.

[Rachel Cruz]

Perfect. So, yeah, so I, I mean, I think you guys are probably more on the same page than you realize. So I would sit down together and just say, okay, yeah, let's, let's like figure out, you know, the next couple of years and what we want our goals to be. And we, we have a goal of making a hundred grand. Fifty and fifty or something. Right. Kind of have like an income, you know, goal. And then from there we want to put some away for retirement.

[Ken Coleman]

I think she'll love the emergency fund concept, you know, like just big picture. I thought your advice was really great.

[Rachel Cruz]

Well, thank you, Ken.

[Ken Coleman]

I mean that to like, they don't need. They're already advanced in the baby steps. In that.

[Rachel Cruz]

Yes.

[Ken Coleman]

Like, they're going to start at baby step three and we build that. I think any woman, any human wants that safety. So explaining that concept to her, you're already halfway there, it looks like. And so the investing part that Rachel's talking about, I mean, and then saving for kids, college and all that stuff, I would just ease her into it, man, and just focus on the positive vision stuff because you don't have a problem that you're trying to fix right. Right out of the gate. I thought it was great.

[Rachel Cruz]

Yeah. And I think, you know, making it a goal for a house. I mean, you guys are in a position that your emergency fund is pretty much done, I think. And then beyond that, like, okay, let's like run some numbers and dream. Winston, I just did this last week and it's always a fun thing to do where you're like, all right, let's do it. How much do we think we want for a down payment? And then you put it in Excel or a calculator or whatever it is, like, how much do we need to save every year? How much do we need to save every month? And you kind of start having these goals towards these dreams that you guys. A life that you're building together, which is beautiful. Hold on the line. Bobby Taylor's gonna pick up and we're gonna give you financial peace University for you guys to watch these lessons together because that was really helpful for her.

[Ken Coleman]

So fun.

[Rachel Cruz]

Yeah. Just to kind of get these concepts of American way of doing money.

[Ken Coleman]

By the way, nod to our Scottish friends. If you look, if you're watching, see this green sweater I have on? I. If you, you can't see below the desk, but imagine me in a blue and green kilt right now. That matches a sweater. I think it would look great. I'll be honest. This is the Ramsay show. This is the Ramsey Show. Thrilled to have you with us. We're here to help you win with your money, win in your profession, and win with your relationships. 888-255-2225 is the phone number alongside the lovely, talented and my friend Rachel Cruz. I am just Ken, but I am Canuff, they tell me. Ken Coleman, your host today. There's a little Barbie reference. Did you catch that one?

[Rachel Cruz]

I did. I appreciated it.

[Ken Coleman]

Gotta pay attention.

[Rachel Cruz]

Just the pop culture.

[Ken Coleman]

Yeah, I try. Try to embrace the pop culture as much as I can. It's good being middle aged. All right, let's get right to the phones. Richmond, Virginia. My old stomping grounds. Used to live there when I worked for the governor of Virginia, in case you were wondering. Jake is there. Jake, how can we help today?

[Caller]

Hey guys, thanks for taking my call today.

[Ken Coleman]

I appreciate it. You bet. What's up?

[Caller]

All right, so me and my wife, we have a question about paying off our debt. So currently my wife and I were in our upper 20s and we're facing quite amount of student loan debt. It's about $150,000 now. We don't have any Other debts, and we've paid off a good amount so far. We've paid off about 30,000 in total.

[Ken Coleman]

All right.

[Caller]

But we recently came across an amount of money in our savings. We have $30,000 saved up. And what we really would like some guidance on is how much of that to apply to our loan. You know, we're in the stage of life where we kind of want to think about a family, possibly a home, some car issues coming up. But we know that we have a good amount. We want to apply to this debt to get it taken care of. So let me get you guys guidance on. On what you think about, you know, putting that towards the debt.

[Rachel Cruz]

Sure. How much you guys make a year?

[Caller]

So gross, we make together around 200,000.

[Rachel Cruz]

Hey, nice.

[Ken Coleman]

Very nice.

[Rachel Cruz]

So what's your plan as of now for the 150 to be paid off? How fast do you think you guys can do it? 18 months?

[Caller]

Well, yeah, we were hoping within three years, 18 months would be ideal.

[Rachel Cruz]

Yeah, I mean, if you guys lived on 70, and then I'm thinking if you apply this 30,000, you could, you could knock it out pretty quick. So to answer. Yeah, to answer your question, you just swallowed really hard.

[Ken Coleman]

Did you hear that?

[Rachel Cruz]

He was like, what? What? Because, yeah, 200's gross. So you guys are probably coming in at what, 130 after taxes?

[Caller]

Probably right around there.

[Rachel Cruz]

Right around there. And if you lowered it to 120 and you guys, you know, lived off of 70, that would take you two years, maybe if you did some extra work. Incomes go up in general. Yeah. 18 to 18 to 24 months. So, yes, to answer your question, I would apply 29,000 of that 30,000, keep $1,000 for an emergency fund, and I would go all hands on deck. I would not be thinking about a house while you have this debt. If you guys decide to start a family, which we encourage people that, yeah, if getting married and starting a family don't not do those things because you have debt. Right. So if you guys decide in six months, like, we feel like, gosh, it's time to start a family, then if that's the case, I would pause everything, not pay extra on the student loans, Just keep them current and be piling up, you know, a big savings. And in nine months, you guys can put a lot in savings when you do that. And then when baby comes and everyone's good, just apply that nine months of savings to back to the debt. So that would be a time deposit. And then as car stuff starts coming up, and if you Know a good amount ahead of time, then you be thinking about that. But if you don't have to replace a car while you have debt, I wouldn't. I agree.

[Ken Coleman]

That's what I was gonna ask.

[Rachel Cruz]

Those things all the way through.

[Ken Coleman]

What do you mean by car issues? Can you be more specific?

[Caller]

Sure, yeah. My car currently has. My wife's car is good. My car currently has around 350,000 miles and it's kind of gone out on me a few times this year. So I feel like it's, you know, I'm really riding it to its last leg.

[Ken Coleman]

But you really feel like that might.

[Caller]

Come up soon, you think?

[Ken Coleman]

350,000 miles. What brand of car is it? Yeah, it's a Toyota. It's been pretty good to me. I will tell you.

[Rachel Cruz]

Those Toyotas.

[Ken Coleman]

Those Toyotas.

[Rachel Cruz]

We're a Toyota family. Toyota Lexus. Like in that. In that. In that family.

[Ken Coleman]

Yeah, I was.

[Rachel Cruz]

Cars. You'll ever.

[Ken Coleman]

Yeah. I'm not trying to endorse it, but you hear that a lot. You know, of course our friend George would say Toyota or no Toyota. He doesn't know how to say it.

[Rachel Cruz]

Toyota and Honda's. We'll give Honda's shout.

[Ken Coleman]

I would see. I see. Rachel, I'm glad we brought this up because I think he's. This car is literally a moment away from dying.

[Rachel Cruz]

How much can you. How much did you sell it for? What?

[Caller]

I've been. I've been told 2000. I've already tried 2000.

[Rachel Cruz]

I've been told 3000.

[Ken Coleman]

1000.

[Rachel Cruz]

1000.

[Ken Coleman]

How much?

[Caller]

Less than a thousand.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Okay.

[Ken Coleman]

You're out of your mind. $3,000.

[Rachel Cruz]

People may want a great Toyota that has lasted. Jake from Richmond, I'll bet you it.

[Ken Coleman]

Looks like it's got 350, 000 miles on it too. Am I right, Jake? Yeah.

[Rachel Cruz]

Okay. So, Jake, so what I would do for real though, if you. If you feel like it is on its last leg, which I get350,000 miles, it probably is.

[Ken Coleman]

Try to rip somebody off for 3,000 dol.

[Rachel Cruz]

Go get a $6,000 car I would not go spend 20,000 on. I would go get a beater again that maybe has 200,000 miles and for 18 months, two years, just drive that car. And then after you guys are out of debt, that's when you can think about stepping up with cash into something else. But I would. I would use as much of this money to put towards the principal of your student loans because that's going to help you guys so much. I mean, it really will from a mathematical standpoint, so I'd rather drive a crappy car.

[Ken Coleman]

Oh, no, no. This is my favorite thing to do.

[Rachel Cruz]

Ken is on his laptop. Jake. Just give you context.

[Ken Coleman]

I really enjoy this.

[Rachel Cruz]

He is on a car website.

[Ken Coleman]

I got used cars for sale he loves in Richmond, Virginia. You in the greater Richmond area.

[Rachel Cruz]

Look at that $4,000 car right around there.

[Ken Coleman]

Yeah.

[Rachel Cruz]

Now it's a Dodge. We got to get the guy a Toyota.

[Ken Coleman]

I'm not gonna give him a Dodge Avenger.

[Rachel Cruz]

Okay, but, but I.

[Ken Coleman]

But for crying out loud. Okay, I mean, listen, some of these cars, I want to make the point that it's not a complete beater. Here, let me just. This is worth. Okay, here we go. A 2014 Chevrolet Impala. All right.

[Rachel Cruz]

10 years old, 4,000 bucks.

[Ken Coleman]

4,000 bucks. 142,000 miles. It's a Chevrolet. Yeah. There you go. It's not the greatest brand in the world, but they're not expensive to fix either.

[Rachel Cruz]

That's true.

[Ken Coleman]

And have an Impala. It is. Famous song, famous line. I'll let the audience figure that one out. But I know you don't know it. I'll share during the break. It's too much to try to explain to you. It's an age thing. She just doesn't. She doesn't get it. But anyway, that's. That's the example there. And, and, and I. I really am having fun with this, but people don't realize what you can get for under $5,000.

[Rachel Cruz]

Yes.

[Ken Coleman]

And let's be honest. He's driving a turd.

[Rachel Cruz]

It's a Toyota.

[Ken Coleman]

It's done its job. Yeah, but it's gonna die soon. And so for four grand, you get the Chevy Impala. Is it good looking? I'm not gonna lie to you.

[Rachel Cruz]

It's not different colors. It's just a silver car. You would never know.

[Ken Coleman]

Yeah. I'm saying the impala, the 2014 impala is not a car that you buy for status.

[Rachel Cruz]

Sure.

[Ken Coleman]

But that's okay. And that's why you do.

[Rachel Cruz]

Why we do it.

[Ken Coleman]

We get it out of debt. A to B.

[Rachel Cruz]

A to B. That's all we're looking for. Yes. For this time period. So. So, yeah. So I would put as much as you can, Jake, that you guys feel comfortable with again with the car replacement and an emergency fund. Everything else needs to go to this. And then you guys are in a perfect position, too, Jake, to. To go and earn some extra money on a side hustle before kids.

[Ken Coleman]

Absolutely.

[Rachel Cruz]

It is the time to do it. It really is because, you know, and we talk to families all the time that get out of debt with kids. Right. I mean that's, that is a lot of our audience. But it's hard. Like when you have a full day of work, you pick up your kids and you have to go to another job and this, you know, and a spouse has to stay home and do bedtime. I mean, like it just gets really complicated and it gets more and more tiring and more difficult. And so you guys are in a perfect season for six, eight months. Like go work extra. Right? Get, bring some of that in. What do you got? What do you got for us? KEN James?

[Ken Coleman]

I got a snappy looking 2012 Mazda 3 Touring, only five grand, 130,000 miles. And it's got a nice little blue color to it. You kind of feel good about yourself zipping into wherever it is you got to go. So again, I make the point and quick commercial break. I'm going to teach Rachel about this famous song lyric that involved Impala. And we'll be back. This is the Ramsey show.

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[Ken Coleman]

Welcome back, America. You have joined the conversation here on the Ramsey show alongside Rachel Cruz. I'm Ken Coleman. Excited to have you with us today, taking your money calls, your income profession related calls, because that goes together. Let's get right back to the phones. Madison, Wisconsin is where Tyler joins us. Tyler, how can we help today?

[Caller]

Hey Ken and Rachel, thanks so much for taking my call.

[Ken Coleman]

You bet.

[Caller]

Yeah, so my wife and I are about $42,000 in debt. And after watching Rachel's message at Fresh Life, that really kind of motivated us to really go hard at the bet. And so, yeah, we're very thankful for that because that shifted our mindset a lot. And so one thing we're going to do and we were kind of going down this path anyway, but we're selling our house that we're in right now. And initially our plan was actually to sell our house, buy a new house in a different area. And now we decided we're actually going to sell a house, move into an apartment because we're going to net around 200,000 ish with the sale of our.

[Rachel Cruz]

Oh, wow. Okay.

[Caller]

And yeah, and so basically we're trying to figure out the best way to handle that because I think the obvious route is to take that, throw every like everything at the debt that we have, about 42,000. So take 42,000, throw it up to debt that would leave us with about 160,000 left. And ultimately we do want to buy another house and you know, one to three years. But I just don't know the best way to handle like how we handle that money as far as, do we put the rest, you know, aside for down payment? Do we put any.

[Rachel Cruz]

Tyler, can I ask why? Why are you guys selling to move to a different area?

[Caller]

Yeah, we, we moved. We got kind of lucky as far as like timing for this house and we bought it in 2020. And yeah, we just, we moved here for my wife's job and honestly we hate the area. My wife's job, she's not working at that job anymore. So it's. The location isn't relevant for us. I work from home, so really location doesn't matter. And so we're just kind of hoping to move to an area that we like a little bit better.

[Rachel Cruz]

Okay, how far, I'm just curious from where you guys currently are to where you want to be. Is it like a 30 minute difference or is it like a 10 minute.

[Caller]

It's about two hours.

[Rachel Cruz]

Oh. Like a totally different area. Okay. I'm sorry. I got you.

[Caller]

Yeah.

[Rachel Cruz]

Okay. That's great.

[Caller]

Yep.

[Rachel Cruz]

So. So yeah, Tyler, I would for sure. Yep. When you guys get that 200,000, I would. Yes. Apply it to the 42, go ahead and pay off your debt that day. I would set some money aside at this point for you guys. Do you have any kids?

[Caller]

Yeah. Yep, we do have a nine month old baby.

[Rachel Cruz]

Okay. Okay. And you guys, do you guys both have pretty stable jobs?

[Caller]

So my wife is a stay at home mom and I am self employed. So it's pretty, my income is pretty variable.

[Rachel Cruz]

Okay. So for, because of that, because of the kid element and it's on one income and it's a variable income, I would probably just put aside six months of an emergency fund. We always say three to six months, but three would be, you know, if it's. If you're single or if you don't have any kids and you both have pretty stable incomes, you could do more of the three. Yeah, but because it's a little bit. Just to give you guys some extra safety. So I would figure out your monthly expenses, multiply it by six and out of that 150, put that aside and I would just open up a high yield savings account. This is my, my husband and I did. And label it emergency fund and you don't touch it. And then I would leave the rest, which would be what. How much do you think an emergency. A six month emergency fund would be for you guys?

[Caller]

Yeah, so we actually. Good news is we actually already have that taken care of, but it's about 30,000. So yeah, we actually have that already, apart from the 200,000.

[Rachel Cruz]

Oh wow. Okay. That's fantastic. Okay, so. So yeah, so the 160 that's left, then I would just keep it in a high yield savings. Honestly, Tyler, I probably, I would not invest it because you guys are going to use it for a down payment in the next, you know, two to three years at the latest probably. So yeah, I would. If it's not more than five years, if it was more than five years, I would invest. But you guys are in a position and you may even pull the trigger faster, you know, if you see a great house. Because the sooner you get in the market, honestly, the better it's going to be. And you guys will have a. Yeah, a great down payment. So I would just put it in a high yield savings and just let it be there.

[Caller]

That's, that's really helpful. So this might Be a dumb question, but I was kind of doing research into that. Like what classifies something as a high yield savings? Like we have our savings account right now. I don't know if it's classified as.

[Rachel Cruz]

That or not, but it's, yeah, it'll be pretty apparent. It'll say high yield. So high yield savings, a money market account in that it will say it. And you know, just this is not a plug, it's just what we use. We use Ally Bank. Usually an online bank is going to be better for high yield savings. You're going to probably get a little bit of a better rate of return versus a brick and mortar standard bank. So we, we have our checking with a kind of a local bank that has brick and mortar and then we have an online high yield savings. We just have it through Ally. I know there's a couple of companies that are out there, but you can even just Google and Honest and, and I don't know there's a lot out there. Just make sure that there's no. Because some banks if they're online will charge you weird fees. So kind of look into the fine print and just get a great option. But something like Ally is totally fine.

[Ken Coleman]

Yeah. Appreciate the call and good job. Good job young man. I mean taking great care of your family. Love that you got all that cash and now you're going to be debt free pretty soon. So don't talk yourself out of that. Don't let anybody talk yourself out of that. Rachel set you up really well. So really, really happy for you as you kind of start a new chapter. Really fun. Let's go to Columbia, South Carolina and Kevin is joining us there. Kevin, how can we help today?

[Caller]

Yeah, hey, thank you guys for taking my call. My question is how do I pull a large sum of money out of my retirement investments to build a home? I'll give you a little backstory. My wife and I are both over 59 and a half. She's retired, draws a pension of about 42,000 a year. I make about 142,000 my salary and we have got about 1.85 million in investments. Some pre tax Roth and then some non retirement investment accounts. And in that 1.85, there's roughly 200,000 in cash. What I'm hoping to do is to try to pull some money out of my retirement investments to fund the house but not cripple myself in retirement.

[Ken Coleman]

How much money are you thinking about pulling out?

[Caller]

Need about 750 for the purchase for the construction of the home. So Part of that would be funded by the 200,000 in cash, still leaving us a fully funded emergency fund. And then the balance we would pull out of them, most of it as we could out of the Roth and then the balance would have to come out of the pre tax accounts.

[Ken Coleman]

What is your current situation as far as a home? Do you own your current home?

[Caller]

We own a current home. We have no debt. We want to tear the house down on the property that we're on because it's the values in the land, not in the dwelling and sort of build our dream home.

[Ken Coleman]

Oh, on your current, on your current home?

[Caller]

That's correct, yeah. So yeah, so we're going to just tear down what we, what we currently reside in, move out and then build a home.

[Ken Coleman]

What's the total cost of that going to be? You said 750 plus. Plus or is it 750?

[Caller]

Yeah, it'll be 750 is what the contract price will be and we'll figure probably 10% for contingency money. So you know, somewhere 8, 25 to.

[Rachel Cruz]

850 we're thinking okay, and have you guys run out numbers because that's going to leave you, you know, 1.2 left in retirement. And have you guys run numbers on that or how long you're going to be working. Just making sure that you guys are in a good spot long term.

[Caller]

Yeah, we feel pretty good about that. We figure we'll have somewhere between 850 to 900k left in retirement investments. And then you know, given the rate of return, banking at 10% hopefully for average, we feel like we'd be very comfortable. We hadn't anticipated pulling any kind of money towards pulling Social Security money until we get full retirement age or even 70 if it permits. So we feel pretty comfortable. We don't say we don't have any other debt. Makes me nervous tapping into retirement.

[Rachel Cruz]

Yeah, for sure. And you know what Kevin, I would sit down with a smartvestor pro because I would want to make sure that what you're pulling out principle wise, which avenue is better through like the roths or a 401k, you know, if that's a better play or just any standard mutual funds you guys have because some of these gains on, you know, the, the, the pre tax investments, you're going to pay capital gains on some of that too. And so there is a little bit of a strategic play that in the Next, you know, 30 seconds I'm not sure if I, I'm gonna be able to answer that. So, so Yeah, I mean, I think from a number standpoint you're not being irresponsible at all. But that next step is. Yeah, how, how and which investments to take out of. And I would talk to your financial planner to make sure you're doing that from a tax perspective the wisest way.

[Ken Coleman]

Yeah, agree. But because you still got earning potential, so got a really nice nest egg that will continue to grow and this is a part of your retirement strategy. So for using the funds that way for a paid off house, I don't think there's anything scary here, but make sure you do your homework. This is the Ramsey Show. This show is sponsored by Better Help. Hey everyone, listen. We all have stories. The family and cultural stories that we were born into. The stories of the things that have happened to us, both the good stuff and the challenging stuff. And we have those stories that we constantly tell ourselves. And none of us can go back and change any of our old stories. But the world is waiting to see what each of us is going to write next. As we enter 2025, I encourage you to examine your old stories and be intentional about the new stories that you're going to write. And I'm not talking about making goals that are going to be long gone by February. I'm talking about writing new stories that will change your life and the lives of those you love for the better forever. And if you're like me, therapy can be a great place to explore the old stories and heal from them and begin writing new ones. If you're thinking about starting therapy, I want you to consider my friends at Better Help. BetterHelp is 100% online therapy and you can talk with your therapist when it works for your schedule. You just fill out a short online survey to get matched with a licensed therapist and you can switch at any time for no extra cost. So start writing a new story this month with BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H-E-L-P.com DeLoney I still remember 10 years ago, 23 years old. I was frustrated, anxious and flat broke. I had followed all the ways that toxic money culture had led me down from well meaning parents and misguided guidance counselors and it left me with a pile of debt. But I'm telling you, it doesn't have to stay that way. Over a decade I went from broke to millionaire and I break it all down in my new book, Breaking Free from Broke. I'm going to show you just how toxic this money system is and how you can break free from credit scores and credit cards and student loans and auto loans and investing traps and finally live a life that you're not exhausted by. A life with more margin, more options, and more peace. If you want to check out the book, go to ramseysolutions.com store to get your copy of Breaking Free from broke. That's ramseysolutions.com store. Welcome back to the Ramsey Show. I'm Ken Coleman and Rachel Cruz is alongside. Thrilled to have you with us. Glad you're with us wherever you are. However you are watching. Let's get right Back to the phones. 888. Two is the number. Brandy is joining us now in Pendleton, Oregon. Brandi, how can we help today?

[Caller]

Hi. Thank you for taking my call.

[Ken Coleman]

You bet. What's going on?

[Caller]

I am single mom with several disabilities and I'm trying to figure out how to make extra income to cover my four walls. I love what I do for work.

[Ken Coleman]

What do you do?

[Caller]

Divorce. I work in development for ministry.

[Ken Coleman]

Okay, and what kind of income do you make there?

[Caller]

My take home with child support and my income combined with about $2800 net a month.

[Ken Coleman]

$2800 net. Okay. And Brandy, can you try to adjust your phone a little bit? I feel like it's a little muffled. Let's see if we can hear you a little bit better. If you take a look at that. That give us a little. Yeah.

[Caller]

Can you hear me better?

[Ken Coleman]

That's so much better. Thank you. Okay. And so we know what your take home is. How much additional income would be ideal. And I'm not talking some crazy dream number, but just this would give me some real breathing room to take care of the four walls and, and, and, and let us know what that looks like.

[Caller]

$2,500 a month to live comfortably, isn't it?

[Ken Coleman]

In addition to what you're making?

[Caller]

Yes.

[Ken Coleman]

Okay, so we want to go from 28 to $5,300. Okay. That's great. I love that you have that target. Are you currently. Is that an issue because of debt?

[Caller]

Debt and disabilities and just the parenting plan schedule that I have. So I'm divorced, disabled. I've got two kids that are 3 and 5 years old. So one is in school and one is in preschool daycare. I've sold all my assets in the divorce. I got the house in the divorce and my ex husband got else. But I have to pay him $20,000 additionally for his portion of equity.

[Ken Coleman]

Okay. All right, so let me ask you this before we dive into the numbers and Rachel's going to help me here as we get you out of this debt and all this. And I don't want to. Don't share anything you don't feel comfortable with, but what can you do, in other words, physically with your disabilities? What. Just tell me what you can do physically instead of going through what you can't do.

[Caller]

What are you.

[Ken Coleman]

What are you able to do?

[Caller]

I've been trying to do some side hustles. I do doordashing and photography and marketing services on the side, but I'm just not seeing enough income consistently to. To rely on that.

[Ken Coleman]

Have you looked at freelance work? Because it's everywhere in programming. Because that's your greatest skill is the programming. If you were doing what you were doing for a for profit business, not a ministry, my guess is you might be making 20 to 30% more. Is that outrageous what I'm saying?

[Caller]

Yeah. Brandi, agree.

[Ken Coleman]

Listen, I would be putting all my attention right now into freelance opportunities with your programming skills because that's going to pay you top notch for your time. Of all the things that you could do. And when we look at exchanging time for money, that's going to be your highest rate. You agree with that, correct?

[Caller]

Correct.

[Ken Coleman]

That's what I would be doing. Because when I look at that number of increasing your income by an additional $2,500 a month, that's what I would be doing. Now I want to bring Rachel in.

[Rachel Cruz]

How much. How much debt do you have? Yeah, how much debt do you have, Brandy?

[Caller]

64,000.

[Rachel Cruz]

64,000. What is that? Will you break that out for me?

[Caller]

That is 12,500 to my ex husband, which he's willing to wait until I sell the house. It's not an area where we live anyways. And I need to come up with some money to pay off all this debt.

[Ken Coleman]

Okay, pause real quick. Hold on, Brandy. Hold on one second. I want to make sure Rachel gets this. That I get this. The home that you're going to sell, it's not the home you're living in and it's in a different area. Is that correct?

[Caller]

Yeah, I have our venture in there right now. That's part of my income.

[Ken Coleman]

What do you stand to make if you sold that today? What do you think you can make on that walking away?

[Caller]

I paid it off except for a construction loan, so approximately $110,000.

[Rachel Cruz]

Amazing. Is it on the market right now?

[Caller]

I'm in the works of listing it right now. I'm just waiting for the realtor to put it on the market, but I updated the listing for her.

[Ken Coleman]

And you owe your ex 12, five out of the proceeds of that 110?

[Caller]

Yes.

[Ken Coleman]

Okay.

[Caller]

I owed him 20,000, but I've paid it down to 12 five. I'm supposed to give them five grand every six months per court order, but he agreed to give me more time and just pay him a lump sum once the house.

[Rachel Cruz]

And where are you living right now, Brandi? Are you renting?

[Caller]

I'm living. I'm renting. I'm living in an area where my ex husband lives and works. So we can and co parent and it's also close to both our jobs.

[Rachel Cruz]

Okay, that's great. So you'll have 98,000 after the sale of this house and an average, you know, median days on the market right now is around 70 days or so. So hopefully in the next three to four months, your house will sell. So it is. This is short term in a sense, but that 98,000 from there, I would direct you because all your debt will be paid off at that point.

[Caller]

Yeah, I'd like to get to baby step four. I think I'd be able to do that with the sale of this home. I think it's just the short term that I'm trying to figure out.

[Rachel Cruz]

Yeah. So that's how I was gonna. Okay, that's great. Because Ken is right for the short term. For the next. I mean, make it a goal for the next six months to bring in an extra two grand a month. And you can, because of the programming skilling skills. You know, at the beginning of this call, Brandy, just where my mind was going, I almost was going to encourage you, even though you love your job. A lot of us love things, but we just. Just don't make enough money to cover it. I was going to encourage you to maybe work somewhere else for two to three, four years just to get some really good financial gain under you.

[Ken Coleman]

Same thought.

[Rachel Cruz]

And then you can always go back to the nonprofit down the road. But there is something to be said that. Because what you're giving up when you're doing those side hustles is more hours of your time where you could be making that same amount in a shorter amount of time. Right. And so, I mean, I don't know. I know you love your job, and I'm sure it's an incredible nonprofit and they do incredible work. And people that work in nonprofits, there's such great work there. But when you are a single mom with a list of disabilities, there's Only so much you can do. I mean, you need to financially get in a spot where you're taken care of and you have money saved in the bank. You're working for a down payment on a home. I mean, there's some stuff there that's real that. I mean, it's something to consider. I don't want to push you into it, but.

[Caller]

Absolutely. But I would consider it considered that my only issue with switching jobs currently is other than what I love what I do. My ex husband works for a prison and his schedule changes every six months. And I've had to be kind of the one kind on the back burner to make my.

[Rachel Cruz]

Yeah, I got you the flexibility job.

[Caller]

They're not very flexible.

[Ken Coleman]

Well, that's why.

[Caller]

Again, changes every six months. And the parenting plan pretty much changes every six months.

[Rachel Cruz]

Yeah.

[Ken Coleman]

I'm so sorry. But I tell you what, this is great news. Brandi, I'm sorry that you're a single mama. I'm sorry you're going through all this. I'm sorry that you're dealing with these disabilities, but I wanted to encourage you. I'm so impressed. You're tough as nails and I am so impressed. And I'm also happy for you. You're going to get out of this debt here pretty soon. I really believe that. I want you to. If you try and keep trying and keep trying to sell your programming skills, I think we can get to that money goal of increased income a lot faster than you. Here's my point. You can do that at home and you know what I mean, and be around the babies and not out in a car driving around when you're already struggling with some physical stuff. Bless your heart. I just really would like you to try that. There's so much skill set and experience that you have to offer to the world. I would go that route. And I mean aggressive. And so, I mean, I would talk to anybody and everybody on social media in your network, at the church, you know, wherever you're frequenting with the kids. Hey, I'm a programmer, I'm a single mama, and I'm looking to do some contract work that is okay. There's no shame in that statement. And I think people will say, hey, I need some programming work. They may not be able to afford you as a full time employee, but pay you an hourly rate or know.

[Rachel Cruz]

Somebody who knows somebody who needs it.

[Ken Coleman]

So I would really encourage you to do that, Brandy. And we're rooting for you. Follow. Follow the baby steps. So excited to hear you say pretty Soon I'm in baby step four. And what a, what a legacy that is, Rachel. It breaks my heart for the single mamas.

[Rachel Cruz]

I mean, they are, they are the toughest, toughest people. Oh, my gosh. I don't know how they do it. You guys are amazing. Well done, Brandy.

[Ken Coleman]

We're cheering for you, Brandy. This is the Ramsey Show. We'll be right back.

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[Ken Coleman]

All right, America, we're back after a quick break. This is the Ramsey Show. I'm Ken Coleman. Rachel Cruz is with me. And we're excited to have you with us. Phone number is 888-255-2225. And the real estate market, Rachel, I know your hubs is in real estate. You know, Dave's in real estate. And you start thinking about where we're going in 2025 new year, what's going to happen? What's the Fed going to do? How does that affect this? All the things and you know, it can be really crazy. If you look at the 15 year fixed mortgage rate, for example, it's fluctuated between 5 and 7% for the past few years. And most experts are predicting this is going to continue for most of 2025. I'm seeing that as well. People kind of think, well, we're going to kind of be in a holding pattern. And so while today's rates might feel high compared to what some of us have seen in our lifetime, I've seen much higher and obviously we've seen much lower. But historically, seven and a half percent is a historical average. So we don't want you to be sitting there trying to time the market. If you're financially ready and you can afford the monthly payments, now is a great time to buy your home. And so to learn more about the trends and, and get real help as we walk you through what to do as you're thinking about buying or selling, go to ramseysolutions.com market. That's ramseysolutions.com yeah.

[Rachel Cruz]

I think, you know, the two biggest myths that I feel like over the past couple years we keep seeing that people are still believing is, well, rates will Just rates will go back down. They'll go back down, they'll go back down. I don't know if we'll ever see 2% again.

[Ken Coleman]

I mean, might be a long time.

[Rachel Cruz]

I mean, I don't, I mean it's just not, I mean, I'll be a.

[Ken Coleman]

Pretty dusty skeleton, I think.

[Rachel Cruz]

I mean. Yeah, so, so again, it's not like it's going to go from six to two in six months. Like, it's just not. So if you're ready, you can always refinance if it does drop that drastically. But it's, it's probably not. And the other thing is house prices are not going to take a nosedive. You know, that was a big thing for a while. People thought like 2021, 2022, like, oh, it's a bubble, everything's going to pop.

[Ken Coleman]

Certain markets will. Have you seen Austin, Texas?

[Rachel Cruz]

Well, Austin is an anomaly. That is true. Yes.

[Ken Coleman]

But I can hear people right now. I want to make sure we address their.

[Rachel Cruz]

But they are correcting, like there's a correction. But it's not going to drop.

[Ken Coleman]

That's right.

[Rachel Cruz]

It's not going to go down. You know, a million dollar house isn't going to go to, you know, half a million idea. Like it's, they're pretty much stabilizing for the most part. It's softening to a degree. But again, it's not these, it's not crazy, it's not this bubble. It's going to pop and you get all these foreclosures like we saw in, you know, 2007, 2008.

[Ken Coleman]

So I'm going to predict a Trump bump, pump. Trump pump in the first couple of years might, we might see us kind of an interesting chilled out, little easy roller coaster this year. A little down. But, but I think it's going to be very interesting to see in year two and three of his administration.

[Rachel Cruz]

Yeah.

[Ken Coleman]

What will consumer confidence look like? I don't have a crystal ball, but I, I just have a feeling.

[Rachel Cruz]

Yes.

[Ken Coleman]

Well, so much we're going to see.

[Rachel Cruz]

Some of that is perceived confidence. Right. When people feel just, just good in general and they feel good about where the economy specifically what happens with regulation.

[Ken Coleman]

What happens with tariffs, you know, what happens when you start to see more supply come on the market. Will builders, you know, will there be more lower income. I don't mean that, I'm sorry, not lower income housing. But will we see housing starts come in at a much more affordable rate?

[Rachel Cruz]

Yes, because of what they're getting.

[Ken Coleman]

All these things are affected by sometimes macro policies that do in fact come out of the White House. So it's going to be interesting.

[Rachel Cruz]

Yeah, that's good. Great.

[Ken Coleman]

So hang on. But the point is, if you're ready, jump in now. And we're here to walk you through it. Kevin is up in Riverside, California. Kevin, how can we help?

[Caller]

Hello?

[Ken Coleman]

Hey, Kevin. You're live on the Ramsey show with Ken and Rachel. What's going on?

[Caller]

Thank you for taking my call.

[Ken Coleman]

You bet. What's up?

[Caller]

So I'm in $650,000 in debt, and that includes mortgage, personal loans, auto loans.

[Ken Coleman]

Can you break that down for us real quick? How much is the mortgage debt?

[Caller]

The mortgage. I owe about 477,000.

[Ken Coleman]

Okay. And now break down the rest of the debt for us.

[Caller]

Cars is about 62,000.

[Ken Coleman]

For two cars?

[Caller]

For two cars.

[Ken Coleman]

Okay, keep going.

[Caller]

Credit. Credit cards. Just me. I haven't done. My wife hasn't taken hers or brokers down yet. But my cards are about. Oh, geez. I would say 25,000.

[Rachel Cruz]

Okay. Personal loans.

[Caller]

Personal loans, small business. I would say 25,000.

[Rachel Cruz]

Okay.

[Caller]

And then the rest in small loans, like a firm and stuff like that.

[Rachel Cruz]

Yeah. Which would equal what?

[Caller]

I haven't broken that down yet, but it's pretty much the rest of my debt.

[Ken Coleman]

And so. And so how much debt? So that makes up the whole 655, if I'm doing quick math. Am I right?

[Caller]

Yeah, I guess.

[Ken Coleman]

How much does your. I'm sorry, I'm trying to move this along. Kevin, how much debt does your wife have?

[Caller]

I'm guessing about 25,000.

[Ken Coleman]

And the way you're talking about credit cards.

[Caller]

Credit cards and personal.

[Rachel Cruz]

Okay.

[Ken Coleman]

And you guys have separate finances. It sounds like we don't.

[Caller]

We actually make these decisions together, which is.

[Ken Coleman]

Okay. You threw me off when you said her debt.

[Rachel Cruz]

Well, yeah, yeah, yeah, yeah. But you guys have like. Yeah, it's different either way. Yeah.

[Ken Coleman]

Okay, so we got 655 plus her 25. I'm trying to give Rachel.

[Rachel Cruz]

Okay. How much do you guys. Guys make a year? Kevin?

[Caller]

We make 130.

[Rachel Cruz]

Kevin, what the crap have y'all been doing?

[Caller]

I know.

[Rachel Cruz]

Oh, man.

[Caller]

I'm sick of it.

[Rachel Cruz]

Just living. Just living.

[Caller]

Wow. Yeah.

[Rachel Cruz]

You know, and normal. And let me say that, Kevin, I mean, this. This literally is America. I'm like, this is normal. You're racking up, you know, credit card debts, two brand new cars. I mean, this is. This is. This is it. Okay, so what's gotten you to the point? You said, I'm sick of it. What has. What's kind of. What's kind of brought. What's brought it to a head that even caused you to call today?

[Caller]

We had a little girl seven months ago.

[Rachel Cruz]

Oh, wow. That'll do it. That'll do it. And how is your wife feeling right now?

[Caller]

She's stressed to the moon and back.

[Rachel Cruz]

Yep, Yep.

[Ken Coleman]

Where are you at? Where are you at?

[Caller]

I have a hard time connecting emotions to it, and that's probably why I'm in this mess.

[Ken Coleman]

Okay, so what's the. What's the real need? We know what the problem is. What can we help you with today?

[Caller]

Well, me and my wife work for my family business, and we work 40 hours a week. Well, I do. She stays at home with our little girl most of the time, but I want to work more, but I feel like I'm a little selfish for wanting to work a lot more than 40 hours.

[Ken Coleman]

Okay, Kevin.

[Caller]

And not being home.

[Ken Coleman]

All right, Jumping in because we got about two minutes with you or less. You're not being selfish. In fact, I would say you're being selfish if you're not working 80 hours a week. And is your wife collecting a salary? You said we both work for the family business. Is she getting paid to be at home?

[Caller]

We. We collect salary. She works from home.

[Ken Coleman]

Greater, so great. So you need to be working like crazy.

[Rachel Cruz]

How much is, how much is your mortgage payment a month?

[Caller]

3,700.

[Rachel Cruz]

Okay. Is it. That's. I mean, that's getting up to what, 40% of your take home pay?

[Ken Coleman]

Yeah.

[Caller]

Yeah.

[Rachel Cruz]

Okay. So here's what I do, Kevin. So this is gonna be real quick. This is gonna be very painful to implement. It's much easier for me to sell you all this. I would, I put the house in the market. I would sell it. This is way, way out of bounds. You have too much house. It's taking 40%. And then think about all these other payments. You guys are barely able to eat. I'm like, this is take. This is taking up so much. So if I were you guys, I. I would sell the house. I would sell the cars. I would be working 80 hours a week, and I would clean this up. That's what I would do. I mean, I, I would. Would you get any equity from the home if you guys sold.

[Caller]

There's about 30,000 in the house, which I feel like is all fees for putting it on the market anyways.

[Ken Coleman]

Well, but again, if you can get out, even if it's a break, even. She's right. You saved yourself 3, $700 a month.

[Rachel Cruz]

Which you because your income the ratio of what you guys need to pay for rent and mortgage needs to be about half of where you're at because your house poor. I'm like you guys you know so I I would cut up the credit cards tonight. You have to have keep the this feeling of I'm done, I'm done, I'm done, I'm done and you you have to get dead out of your life you have to stop and I would be selling everything in sight including those cars and get your head above water. You guys have you know three to four year journey here but you, you can do this. Hold on the line Taylor's gonna pick up and we're gonna give you guys financial peace University which is our nine lesson course and and you guys watch this together and just implement these steps. It's going to be hard but worth it.

[Ken Coleman]

This is the Ramsey show.