Normal Is Broke... Do You Really Want To Be Normal?

Summary

Podcast Summary: The Ramsey Show – "Normal Is Broke... Do You Really Want To Be Normal?"

Released by Ramsey Network, "The Ramsey Show" is dedicated to helping individuals build wealth, gain control over their finances, and create fulfilling relationships. In this episode titled "Normal Is Broke... Do You Really Want To Be Normal?", hosts Rachel Cruz and bestselling author Jade Warshaw delve into various financial challenges faced by callers, offering actionable advice to break free from common financial traps.

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Introduction

The central theme of this episode revolves around challenging the conventional "normal" financial behaviors that often lead to living paycheck to paycheck and accumulating debt. Rachel Cruz and Jade Warshaw engage with callers who find themselves stuck in financial limbo, offering strategies to overcome these obstacles and achieve financial freedom.

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Caller Segments

1. Jules from Spokane, Washington

Timestamp: 00:46 – 08:55

Issue: Jules, a single mother reliant on government assistance, grapples with the dilemma of accepting a job that could jeopardize her benefits. Her income from food stamps and Medicaid is constrained by a complex rental agreement that ties her rent to her earnings. Attempting to secure a job at a daycare resulted in losing child support benefits, leading to increased financial strain and loss of daycare funds.

Advice: Rachel and Jade advise Jules to:

• Assess the Financial Threshold: Determine the exact point at which earning additional income would lead to the loss of benefits.
• Identify Necessary Income: Calculate the required monthly income to cover all expenses without the reliance on government assistance.
• Seek Higher-Paying Opportunities: Encourage exploring job opportunities that offer higher wages, potentially exceeding 40 hours of work per week.
• Utilize Financial Tools: Recommend enrolling in Financial Peace University, using the EveryDollar app for budgeting, and accessing Ken Coleman's materials to align her career with her strengths.

Notable Quotes:

• Rachel Cruz at [05:17]: “We’re going to give you Financial Peace University… And when you get a job, hey, this is where this is going.”
• Jade Warshaw at [07:03]: “Almost 25,000 a year after taxes. So that is very, very doable, Jules.”

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2. Amy from Anna Marie Island, Florida

Timestamp: 11:48 – 19:23

Issue: Amy owns two properties: one with a hefty mortgage and HOA fees, and another profitable Airbnb property with no mortgage. She contemplates selling the island property to eliminate debt and move into the Airbnb home. With significant cash on hand from the sale, she seeks guidance on investing the proceeds, torn between real estate investments and the stock market.

Advice: Rachel and Jade suggest:

• Diversify Investments: Allocate funds across various investment vehicles to mitigate risk.
• Maximize Retirement Accounts: Encourage maximizing contributions to Roth IRAs and exploring mutual funds for broader market exposure.
• Consult with Experts: Recommend meeting with a SmartInvestor Pro to tailor investment strategies to her specific financial situation.
• Balance Real Estate and Stocks: While Amy has a strong background in real estate, diversifying into less volatile stock investments can provide additional financial security.

Notable Quotes:

• Jade Warshaw at [16:08]: “I would take some of it, I would diversify it… So that, that would be a thing.”
• Rachel Cruz at [18:55]: “The truth is, you’re not far away from being completely free from this.”

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3. Brent from Cincinnati, Ohio

Timestamp: 20:41 – 30:04

Issue: Brent is considering purchasing his leased car for $19,000, which is valued at $23,000 elsewhere. Despite the apparent deal, Brent and his wife face financial constraints, including $4,000 in credit card debt and additional personal loans. With a combined income of approximately $40,000, taking out a significant loan for the car is financially burdensome.

Advice: Rachel and Jade advise against purchasing the car due to:

• High Monthly Payments: A $19,000 loan would add approximately $600 per month, exacerbating their financial strain.
• Depreciation Concerns: Cars depreciate quickly, making loans on depreciating assets financially unsound.
• Debt Management: Prioritize eliminating existing debts before taking on new obligations.
• Alternative Solutions: Suggest selling the current car, possibly downsizing to a more affordable vehicle, and redirecting funds toward debt repayment and investments.

Notable Quotes:

• Rachel Cruz at [21:55]: “We would give you our advice differently… what the life you guys just described to us from a financial perspective only is so normal.”
• Jade Warshaw at [29:15]: “Normal is broken. Normal is 78% of Americans today are living paycheck to paycheck.”

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4. Regina from San Antonio, Texas

Timestamp: 36:54 – 40:24

Issue: Regina, a 26-year-old in baby step two, seeks advice on discussing financial principles with her 18-year-old cousin entering college. She aims to foster responsible financial habits in her cousin, aware of her own financial journey and the importance of early financial education.

Advice: Rachel and Jade recommend:

• Lead by Example: Demonstrate financial responsibility through actions rather than just words.
• Open Communication: Engage in honest conversations about money management, goals, and the importance of avoiding debt.
• Offer Support: Provide resources and be available for guidance as her cousin navigates financial decisions in college.

Notable Quotes:

• Jade Warshaw at [36:43]: “People don’t like for you to just strike up a conversation out of the blue about their money… let your actions speak louder than your words.”
• Rachel Cruz at [40:24]: “Let your actions speak louder than your words and they truly will like the fruit.”

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5. Sierra from Boone, North Carolina

Timestamp: 52:32 – 62:13

Issue: Sierra and her husband live paycheck to paycheck while Sierra attends college full-time. Despite her husband's income of $49,000 annually, they struggle with debts totaling around $1,500 and a substantial car loan of $28,000. Recently affected by a hurricane, they feel overwhelmed and stuck in baby step one, finding it challenging to make progress toward financial stability.

Advice: Rachel and Jade offer the following guidance:

• Debt Reduction: Prioritize selling the overvalued car to eliminate the $28,000 loan.
• Increase Income: Encourage finding additional income streams or side hustles to supplement their earnings.
• Budgeting: Reinforce the importance of strict budgeting and cutting unnecessary expenses to manage existing debts effectively.
• Stay Committed: Emphasize persistence in following baby steps despite setbacks, with a focus on long-term financial goals.

Notable Quotes:

• Jade Warshaw at [54:57]: “You got to sell that car. You got to sell that car.”
• Rachel Cruz at [60:50]: “It has the ability to ruin what you have built if you keep this up.”

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6. Diana from Toronto, Canada

Timestamp: 74:34 – 84:19

Issue: Diana, a 48-year-old single woman with a nearly paid-off mortgage on a $700,000 condo, has accumulated additional debt by living off a credit line after quitting her job. With no children and facing financial instability, she questions the urgency to pay off her mortgage despite having significant equity in her property.

Advice: Rachel and Jade address Diana's concerns by:

• Reevaluate Financial Priorities: Advise Diana to focus on securing stable income before accelerating mortgage payments.
• Debt Management: Recommend avoiding further debt accumulation and potentially selling the condo if financial distress continues.
• Long-Term Planning: Encourage creating a comprehensive financial plan that includes emergency funds and future investments instead of rushing to pay off the mortgage.
• Seek Professional Help: Suggest consulting with financial advisors to restructure and stabilize her finances.

Notable Quotes:

• Jade Warshaw at [76:10]: “Don’t rush to pay off your mortgage… get back to employment, avoid accumulating further debt.”
• Rachel Cruz at [81:43]: “You have a rhythm and a pattern that's begun… we don’t want you to stay in that long term because that will be a financial disaster.”

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Conclusion

Throughout the episode, Rachel Cruz and Jade Warshaw emphasize the pitfalls of adhering to "normal" financial behaviors that lead to stagnation and debt. By sharing personalized advice tailored to each caller's unique circumstances, the hosts encourage listeners to break away from conventional patterns and adopt proactive financial strategies. The overarching message reinforces the importance of budgeting, debt elimination, income diversification, and informed investment to achieve lasting financial peace and freedom.

Notable Overall Quotes:

• Jade Warshaw at [03:14]: “The life as you know it will change to something better… you have way more choices and options and freedom and opportunity.”
• Rachel Cruz at [29:48]: “Most new car payments are over a term of six years… you limit your risk when you spread your money around.”

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This episode serves as a compelling reminder that financial transformation requires intentionality and sometimes stepping outside societal norms. By leveraging the advice provided by Rachel and Jade, listeners can navigate their financial challenges with confidence and clarity.

Transcript

[Rachel Cruz]

It's a bonus session.

[Jade Warshaw]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and bestselling author Jade Warshaw. And we'll be answering your question about life and money, relationships, career. So give us a call at 888825 5225. So we're going to start off in Spokane, Washington, and we're talking to Jules. Hi, Jules. Welcome to the show.

[Caller]

Hi.

[Jade Warshaw]

How are you doing?

[Caller]

I'm okay. I'm just a little bit stressed.

[Jade Warshaw]

All right, how can we help?

[Caller]

So I'm a single mom on government assistance and I'm just feeling really stuck in, like, the system.

[Rachel Cruz]

Okay, tell us more about what, what you're receiving and what's causing you to feel stuck.

[Caller]

I have like, so I have food stamps and then I have like Medicaid or whatever for me and my, my kiddo. But I'm just feeling stuck because I had gotten a job over like the summer working at like a daycare, and I couldn't accept the position because I. Sorry, I'm nervous. I had to run it past my complex because I live in low income apartments and they up your rent like a percentage of what you're making. And I had told them that in that when I moved in my apartments around April, that I was getting child support at the time. And I was. Which was like, I don't know, $600. But then they can't. Sorry, this is confusing. They can't adjust that until another year.

[Rachel Cruz]

Okay.

[Caller]

So they can't fix that I'm not getting child support anymore until the $600.

[Rachel Cruz]

Stopped and now your rent is higher. Okay, so tell us.

[Caller]

So I had to give up my job so that I could keep my benefits. And, well, I had gotten my son into daycare, but the daycare funds for low income are now not. They don't have any funds.

[Rachel Cruz]

What is your income?

[Caller]

Like, okay, what is your income? I don't have any. I'd say like my mom helps pay for my car and my phone.

[Rachel Cruz]

Okay.

[Caller]

And then I get maybe $200 child support. Maybe. Okay, if that.

[Rachel Cruz]

And what are you making?

[Caller]

Oh, nothing.

[Rachel Cruz]

Why not?

[Jade Warshaw]

You don't have a job, so. Because what you're saying is when you went to actually start working, then you basically price yourself out of the situation you're in, from your apartment to everything else. Is that right?

[Caller]

Right. Right. So, like I was.

[Jade Warshaw]

How quickly Will.

[Caller]

I was making.

[Jade Warshaw]

How quickly will your rent. Because you said it will take them a year to realize that you're not getting the extra 600 dol a month. Will they. Will that same be on the other end, that if you start working and making money, will they raise your rent?

[Caller]

Yes.

[Jade Warshaw]

Okay, but why would they raise it but not lower it, depending on your situation?

[Caller]

I. I don't know. Honestly, I'm really confused about it because.

[Jade Warshaw]

Yeah, I would get some. I would get some information because here's. Because here's the thing. I could. I could understand, like, the rock and the hard place that you're in of like, okay, once I start this track of actually making some money, then the life as you know it will change. But I want to encourage you, the life as you know it will change to something better, something that you have way more say over your life. You have way more choices and options and freedom and opportunity to do some amazing things. And so that jump is going to be scary. And I want to help you real quick. We just have a few minutes to try to set you up well for when that jump is going to occur. Not. Not if. Because I do. I want you. I want you to be working and I want you to be able to support. Is it. Do you have one child?

[Caller]

Yeah.

[Jade Warshaw]

Okay.

[Caller]

I have a toddler. He's almost two.

[Rachel Cruz]

Okay. And your mom's helping you out a little bit with childcare, it sounds like.

[Caller]

Well, she doesn't help me with childcare. Just. Just with finances.

[Rachel Cruz]

Oh, okay.

[Jade Warshaw]

Just with your phone and your. And your car. So with your car, do you have a car payment that she's paying, or is she helping you just with gas and everything else?

[Caller]

Just with. Just with gas and, like, insurance.

[Jade Warshaw]

Okay. Okay.

[Rachel Cruz]

So I think. I think the way we work this backwards and we're going to give you all the materials that you need to get started, but the way to work this backwards is what's. What's that threshold of you losing your benefits? So figuring out that. What that is, and then figuring out, okay, if I do that, how much more do I need to support myself? Have you kind of done that math and said, here's what I need every single month in order to survive?

[Caller]

Absolutely. Yeah. No, I have done the math. And when I. When I had qualified for that job, I actually sat down and went through all the finances.

[Rachel Cruz]

Okay.

[Caller]

And like, I'm in counseling. I go to, like, doctor's appointments and things like that. And I kind of did the math, and I was like, okay, I'd be Losing more than I was making. And then the insurance for the new job wasn't kicking in until 90 days. And so I was like, oh, shoot.

[Rachel Cruz]

Okay, but what do you need? What is that? What's the number that you say if I get, you know, $3,500 a month or $4,000 a month, I will be able to pay my rent, my car note, my kid goes to daycare, and I, you know, we have groceries that you're covered. What is that number?

[Caller]

So I haven't. So I didn't take the job, so I kind of lost track of the finances. But let me. Let me ballpark it. I want to say, like, well, that's your homework. Maybe, like, honestly, how much I. Maybe a thousand. Because I'm thinking, like, I have my phone. If I were to pay all my bills myself, like, what about housing?

[Jade Warshaw]

And because will you price yourself out of the current situation you're in?

[Caller]

Yeah, so I'm in the low income, so probably.

[Rachel Cruz]

We're talking about a situation, Jules, to be clear, we're talking about a situation where you don't have government assistance, where you are paying your rent.

[Caller]

You are paying low income apartments either.

[Rachel Cruz]

That's right. I'm talking about a situation where you pay for everything and you're no longer.

[Caller]

Maybe 2,000. Maybe.

[Rachel Cruz]

Okay, so you need $2,000 a month. So what I want to encourage you is that's out there. It's out there today, and it's gonna. It's gonna require you making. Working more than 40 hours a week, possibly. But, I mean, you can go over. There's a lot of places like Walmart and even fast food that are paying over $18 an hour if you can work your way up.

[Caller]

Okay?

[Rachel Cruz]

So it's out there. I think right now the biggest thing that you're dealing with is this kind of mental block, because you're used to this, and it's very hard to get your mind around something that you've not really experienced. Right. And you're like, oh, my gosh, I need this. I need this. And the truth is, you're not far away from being completely free from this.

[Jade Warshaw]

Yeah. And I would. And I would tell you, Jules, too, we. Especially when it comes to money, the more facts you have, the. The easier, in a sense, being able to process and make decisions becomes. Because when it's just this idea of, like, gosh, I don't even know how much we spend here. I don't know what apartments will cost. So, like, to Jade's point earlier, your homework would be to find actual numbers, actual numbers of a one bedroom apartment somewhere. Actual numbers of hey, here's really do what I spend at the grocery and per week, here's what I think it will be. And it doesn't sound, you know, you're, it's not this, I don't think it's going to be this outrageous number. I mean, just like what you just quoted us. Even I'm like, yeah, $22,000 a month. I mean that's 25, 30 grand a year after taxes. So like that, that is very, very doable, Jules. And so if you stay on the line, Kelly's going to pick up because we want you to be able to have the information to help you. So we'll give you Financial Peace University, which is our nine lesson course. We're going to give you every dollar, which is every dollar premium to hook up to your bank to actually create a budget. And when those transactions come in, Jules, actually track them and drag and drop them and start telling your income. When you get a job, hey, this is where, this is where it's going. And then we'll give you some of Ken Coleman's. Ken Coleman material because there's a get clear assessment. And I want you to take this, Jules, because I want you to have the ability to see yourself and your giftings and what you're wired to do and find a job in that lane. So we believe in you, Jules. You're doing an incredible job as a mom. So stay on the line. Kelly, you'll pick up.

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[Jade Warshaw]

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[Rachel Cruz]

It's on my list of favorite things, like five favorite gifts to give.

[Jade Warshaw]

It's really, really great. So you can go to Ramsaysolutions.com store or click the, click the description if you're listening on podcast or watching on YouTube. All right, let's go to Anna Marie island in Florida and let's talk to Amy. Hey, Amy, welcome to the show.

[Caller]

Hi, how are you guys?

[Jade Warshaw]

We're doing great. How can we help?

[Caller]

So I'm a little confused as to where to go. I own two properties. One of them is on the island and that property I owe about 400,000 on. It's worth 700,000. My monthly payment with HOA and everything is 4,500. I own another property just over the bridge. It's a bicycle ride to the beach. That is an Airbnb property I've been making about 50,000 a year on, but I don't owe anything on that property. That is worth about 650,000. What I am thinking of doing is selling my property on the islands. I'm kind of tired of the HOA stuff and actually I'm in the process after Hurricane Milton Renovating my Airbnb property right now. And I'm thinking I want to move into it.

[Rachel Cruz]

Wow.

[Caller]

Thinking of selling condo on the island and moving into the house just over the bridge. Then I'll have no. No house debt. I have 200,000 in cash after the renovation left over. And then if I sold the condo, I would have. I would make 300,000 profit off of that. So I'd have a half a million. The only debt I have is my car, which I just bought. And what's. I know that. Well, it's kind of against Dave's rules. I know, but I bought. Just bought a new infinity. I was 70,000 on that $13 a month payment. I have a 70,000 IRA, a $20,000 fidelity account.

[Rachel Cruz]

So what's wrong with. What's wrong with doing this deal and moving into the Airbnb and selling the one on the island? What's wrong with that?

[Caller]

It's not what's wrong with it. I think that's. I think that's a smart decision. The question I have for you guys is. So I'm a real estate broker. I've done real estate, renovations, flips, building all my life. I'm a single woman, 55 years old. If I did this move and my condo actually sold and I got into the house, I had a half. Half a million. And I need to know what to do with it, because I'm most likely to want to buy real estate and fix it and do all that, but. And I'm not knowledgeable at all about the stock market. I'm trying to just wrap my brain around all of it and learn, because I'm getting to the age where I want the money to work for me instead of me working the money, you know?

[Jade Warshaw]

Yeah, for sure.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

How old are you?

[Caller]

So I'm 55.

[Jade Warshaw]

Okay. And what do you do for a job? Are you working?

[Caller]

Real estate broker.

[Jade Warshaw]

Oh, that's right. You said that. I'm sorry. How much do you make a year doing that?

[Caller]

Well, that's. That varies quite a lot, but anything from 100 grand to 300 grand a year.

[Jade Warshaw]

Okay, and then your primary residence where you live now, what is the situation there?

[Caller]

So this condo on the island is. We. I owe.

[Jade Warshaw]

Was that. Is that where you're living? Is that condo?

[Caller]

It's been my primary residence.

[Jade Warshaw]

Oh, it has?

[Caller]

Okay.

[Jade Warshaw]

I'm sorry. I gotcha. Okay, perfect.

[Caller]

Perfect. Now renovating it, but I'm thinking about moving here.

[Jade Warshaw]

Yeah, that's great. That's great. Okay, so the $500,000 cash I mean, what I would do honestly with it is I would take some of it, I would diversify it. And I love the idea that you like real estate and maybe because I come from a real estate family, but I think it's a great, I think it's a great option to have, especially if you know what you're doing and a lot of people don't, but you do because you live in this world and it's great and it's a great way to invest. So I would take some Amy and I would probably max out a Roth IRA every year. I would make that part of my rhythm. I think it's $7,000 per year that you can do. So I would allocate some money to make sure that you had the cash flow and that can come out of just your income that you're making anyways. It doesn't have to come out of this 500,000.

[Rachel Cruz]

What is your income?

[Jade Warshaw]

She said anywhere from 100 to 300.

[Caller]

Yeah, anywhere from like 100 to 300.

[Jade Warshaw]

I made a little more than that.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

So I would. So, yeah, so that would be a thing. That would be something I would do and then I would still, you know, I think your, your ira. Do you have any other retirement investing? Do you like within your brokerage, any kind of 401k or anything?

[Caller]

Always been. I've always felt like, I've always felt like I do better with real estate than I do with, like stocks have always scared me, you know, it's always been an unknown.

[Jade Warshaw]

Well, and so let me tell you this. There is a level of risk that I wouldn't take in the stock market when you think about single stocks and there's ways to do it that's risky and then ways that have way less risk and you still get a great rate of return on average anywhere from 10 to, I mean 12, 13. I mean this past year the market did incredible. So it was even more than that. But doing mutual funds, investing in mutual funds, which is going to be 90 to 200 stock within a fund, so no single stock investing all of that. So really you, you limit your risk when you spread your money around. And so that, that would be the bet that I would do. I mean, I would do anything I could to do some tax favored plans in retirement. So that would be your Roth ira. Yeah. Within your brokerage. I don't know if you're, if you do you own the brokerage or you work for someone.

[Caller]

I own the brokerage.

[Jade Warshaw]

I would look into like a, I would look into it like a sep.

[Rachel Cruz]

I mean I would look into an individual 401k.

[Jade Warshaw]

Yeah, I would look into a couple of options just to put some money in from a retirement standpoint because that is going to be, it's going to have more tax advantages than just going into the market on your own personally. So I would, I would allocate some money for that. I would look around. I mean I don't know what real estate is going for in your area but I mean if you can find something and pay cash for it and have another rental property to the side, I mean I think that's, I think that's a great option as well. So yeah, there's a, there's nothing, you know, you can't, I wouldn't say do anything completely wrong unless you took all this money and just like blew it or put it all in like one single stock or something. But I think real estate and some in retirement would be great. But I would also recommend sitting down with one of our smartvestor pros. We actually just met one. And the last break, that's right here from Seattle.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

And a smart investor pro can sit down and really help look at all of this with you as well and just kind of your long term plan of retirement, long term goals that you may have and be able to let this money work for you in that way as well.

[Rachel Cruz]

Yeah, I think that you're doing well. The thought I keep having is, you know, a lump sum is going to double every seven years. So let's say you sold the house on the island, you got the 300k. Let's say you dropped that in the bank and then you invested the cash that you have into real estate. I mean if you do that and you continue to add 15 of your income every single month, I mean in 10 years, I mean you're going to be looking pretty good. You're going to have around 1.3. And that's just assuming, you know, you're kind of midway at that midway point in your income. It's not assuming for the months that you're making 300 or the years that you're making 300 and above. So you have a really great horizon on this and way to go. Good job.

[Jade Warshaw]

Yeah, that would be some good numbers to kind of play with. If you go to ramseysolutions.com our investment calculators there and plug in some of the numbers and just say what if I just invested, you know, all this 500,000? Because if it doubled, you know, every seven years is kind of the rule of seven that could be exciting to you. And it may be less work and headache as real estate. But if real estate something you love too, maybe you take some of this and buy a paid for property. Thanks Amy for the call. Hey you guys, when you go against what society thinks is, quote normal, like avoiding debt, for example, it might seem weird at first and that is totally okay. We want you to be weird if that means you're doing things intentionally, including how you spend your health care dollars. And one way to be intentional is with Christian Healthcare Ministries. CHM isn't health insurance. They're a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of health care costs without sacrificing their freedom. Programs start as low as $98 a month. Find out more and [e-mail] budget that's chministries.org budget welcome back to the Ramsey Show. Up next, we have Brent in Cincinnati, Ohio. Hey, Brent, welcome to the show.

[Caller]

Hi, Rachel.

[Jade Warshaw]

Hello. How can we help?

[Caller]

So I'm wondering if I'm able to purchase a car for my wife. We've been leasing to own for the three years and upcoming December, we can purchase it for 19,000. The same car is valued at 23,000.

[Rachel Cruz]

Okay, so you've been leasing it for three years. What was it worth when you started? I'm just wondering how much it's depreciated.

[Caller]

How much? No, how much was it worth? 28,000. Okay. Okay.

[Rachel Cruz]

And now it's worth 19. But you're saying you've seen it other places for 23. Is that what you're telling me?

[Caller]

Yes. With the same mileage the same year, it looks like a good deal.

[Rachel Cruz]

Yeah. Do you have the money and you like the car?

[Caller]

We like the car, but we don't have the money. So we'd be getting a loan through my credit union.

[Rachel Cruz]

Oh, and what's the alternative? You just give it up?

[Caller]

Yes.

[Rachel Cruz]

Do you have any.

[Caller]

My wife's very attached to the vehicle and doesn't really want to consider any cheaper options.

[Rachel Cruz]

Yeah, listen, I can understand that. Go ahead.

[Jade Warshaw]

Well, yeah. Why is she attached to it? She just likes it a lot.

[Caller]

She likes it a lot.

[Jade Warshaw]

Okay, well, the fact that she's not going to be able to consider. She's sitting there with you, Brent. Tell her hi for us. What's her name?

[Caller]

Elizabeth.

[Rachel Cruz]

Hey, Elizabeth.

[Jade Warshaw]

Elizabeth. So, yeah, I mean, when you put yourself in a position, when you purchase something and say, well, I'm just not, I don't want to look at anything cheaper. You've kind of already made your decision. I mean, if you guys don't have the money and you don't look anything cheaper, I mean, I guess the only thing that you guys have decided at that point is, yeah, you're going to take a loan out and buy the car. We would advise you differently. And so you called the show. So we'll give you our advice. I don't know if you're going to want to take it, because what you realize is you've been. You've been basically renting this car for.

[Rachel Cruz]

Three years in the most expensive way possible.

[Jade Warshaw]

In the most expensive way. Yeah. And I know, you know, you can't really tell the interest rate on a lease car, but when people, you know, actually ratio it out, it's. It's high. It's. It's usually more expensive than if you went. Got a traditional car loan. So then you're going to take a $19,000 loan, pay interest on that, and then we're going to look up in four to five years, and this $19,000 car is going to go down to probably $10,000 or $12,000 in value. So when it comes to cars, it is one of the places that, financially speaking, I mean, it's kind of one of the dumbest debts you can. You can get into from a financial perspective, because again, you're borrowing money and paying more on that borrowed money, because the interest on an asset that's going down in value versus, like a house, a mortgage. Right. You take out a mortgage, you do pay interest on that loan, but the value of that home is going up at the same time. So the car itself is not a wise purchase to make when you don't have cash for it. So my next question to you guys would be, do you have any cash available to you?

[Caller]

Do we have. No, we don't.

[Jade Warshaw]

Okay.

[Caller]

Still trying to get over some credit card debt.

[Jade Warshaw]

Okay, good. How much. How much debt do you guys have?

[Caller]

We have 4,000 on the credit card, and then we have a few monthly payments.

[Jade Warshaw]

What are those?

[Caller]

We're still. We're paying off our wedding rings, which we have 7,000 left over. And then we have some. A personal loan. We're paying back my parents, which we all. About 2500 left. Okay. And I'm doing 500 every paycheck.

[Jade Warshaw]

Okay.

[Caller]

So about towards the end of January, the 500amonth will clear up.

[Jade Warshaw]

Okay. How much do you guys make a year?

[Caller]

Close to 40,000 a year.

[Jade Warshaw]

Combined.

[Rachel Cruz]

Combined, yes.

[Caller]

Is.

[Jade Warshaw]

Are you both working.

[Caller]

My wife is looking at getting a new job that could make more money soon. But we just don't have the money yet and I don't want to make decisions on. We'll have more money later. Yeah, I want to make the decision for sure. We have now.

[Jade Warshaw]

Absolutely. Which is very wise. Very, very wise. So, yeah, a forty thousand dollar income. There's no way I would take a nineteen thousand dollar loan for a car. You can't afford it.

[Rachel Cruz]

Do you guys have kids yet?

[Caller]

No, not yet.

[Rachel Cruz]

Listen, I'm going to throw something wild out here and roll it over in your minds and in your hearts tonight. But she's not working yet. You don't have children. When it comes time for this lease, like you let it go. But if you have to be a one car family for a couple of months while you save up, what's the harm in that? Just a thought. Yeah, I suggest that my husband and I did that while we were trying to get out of debt. We got rid of one of our vehicles and we were upside down but we got a small loan for it to get out of it. And then we had one, just our single car. We paid it off and then we actually found that it was doable for us for quite a while and we stayed that way. And then when it was ready time for us to have a second car, we bought it in cash. And for you guys, in this season of your life, that actually might work out better for you than a lot of other couples because she's not really working yet.

[Jade Warshaw]

And I'm going to say this, Brent, and I'm going to be very. As kind and fun as Rachel is, this comes through. But the what the life you guys just described to us from a financial perspective only is so normal. Yeah. You know, you have a personal loan to the parents for. I'm not sure why you got wedding rings. You didn't have the money. So you guys took out a loan. You have some credit card debt, you have a car lease like this is. You guys are. Y'all are the normal Americans out there. But the problem is, Brett, normal is broken. Normal is 78% of Americans today are living paycheck to paycheck. Meaning if you miss a paycheck, you don't have enough to cover your bills. So if you guys decide that you want to continue to live normally, then what you guys have so far decided is that and normal would be to go get, just keep the $19,000 car because you like it. That is normal. And you will have normal results because of It. But what we encourage people is to flip all of that onto their head and actually say, what is the weirdest thing we can do? Because if I get the results of normal, which is paycheck to paycheck, living and not being able to build wealth and not be able to invest or save for the future or have any amount of money in savings, like, I don't want to be normal. That's not where I want to be. And if you guys look at each other tonight and say, we don't want to be that, we want to be people that have no debt. We have an emergency fund. We're actually funding some retirement for the future. We have a house that we can afford. It doesn't stress us out. We have margin in our budget. Like this life that can be created, Brett, is possible, totally possible, but you can't get there if you keep doing normal things. So what Jade's saying is a one car family for a couple that doesn't have kids, is that inconvenient? Yeah. Is that weird? Yeah. But you know what? You don't have a car payment, because that car payment on the $19,000 car, it's going to be $600 that you guys don't have. Like, so you have to make different decisions if you want different results, Brett. And that's going to mean not taking out a loan for a car. For you guys, the reality is a one car family. It's saying goodbye to my emotions, saying goodbye to what I want and what I love and all the things that got me to this place. And you put all that to say, and you guys are like, we're adults. Yeah, we're adults. And we're going to make adult, like decisions and we don't have the money. We can't afford this car. You can't afford this car, Brett. At $40,000, you can't afford half of your annual income going to the value of a car like that. It's not good. That's not wise. And. And I would be working like crazy to get your income up. And. And I would start working to get out of debt. I mean, you guys could get all this paid off. Your debt's not crazy. I mean, you know, 2500, 4000. Like, you guys can get this cleaned up really fast if you just say we're going to be weird and we're going to work 60 hours a week because we don't have kids and we're going to take side hustles. We're going to drive Uber. Right?

[Rachel Cruz]

I mean, like here's Brent here, let me put this in perspective. Here's a couple of interesting statistics about, about cars because I want you to never go and have a car payment again. Number one, Rachel just said 78% of the people living paycheck to paycheck. Right? 85% of people who buy, who get a car, take out a loan or at least to get it. And I think that's a very interesting correlation. Almost everybody, almost everybody, which is almost the same percentage of people living paycheck to paycheck. And for most people, that car payment is about $525 a month, which is very close to where you guys were at.

[Jade Warshaw]

And if you invested that instead of give it to a car company, what would that be?

[Rachel Cruz]

Well, think about it. Most new car payments are over a term of six years. If you had listened to us and invested that money over the last six years, you'd have $85,000 instead of a car debt that's gone down in value.

[Jade Warshaw]

And so be weird, Brent. Be weird.

[Rachel Cruz]

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[Jade Warshaw]

I think one of my favorite things right now in life, Jade, is I will hear a trend that, and not to point fingers at generations, point them Gen Z will come up with. And you hear it and you're like, well, that sounds familiar. I think we've been doing that.

[Rachel Cruz]

It's already a thing.

[Jade Warshaw]

One of them was Cash stuffing. This was like two years ago. They came up with someone on Tick Tock was like, we're gonna cash stuff. Which means you take cash and put it in different compartments, like envelopes to pay for things. And they're calling it cash stuffing. It was this new. Like, that's such a wise idea. How smart you know it was. And we're like, that was the envelope system that's happening.

[Rachel Cruz]

Wallets or.

[Jade Warshaw]

Yeah. I was like, I think we have a product for that. We have a wallet for that, if you will want that. Another one was like, they have it's. They call it dinner parties.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

And they're like. And everyone brings a dish. So instead of going out to eat, you bring a dish and they're calling it a dinner party. Like, isn't that a potluck? Like, is it? Haven't you been doing this, like in the Baptist churches for like the negative stuff?

[Rachel Cruz]

They were calling like what we would call financial infidelity. They were calling it stealthy spending. Oh, like stealthy to like get around.

[Jade Warshaw]

The spouse of your purchases. Yeah. So yeah, these, these things that have been going on, they just kind of put a little Gen Z, like sprinkle dust and excitement, a little glitter on it and make it a little bit exciting. So there's a new trend that they have come up with and it's now like trending on social. And it is called slow shopping is what they're calling where it means you don't just buy something when you want it, you wait to see if you really need it.

[Rachel Cruz]

What a concept. Vetting a purchase.

[Jade Warshaw]

So a slow shopping, it's become a big trend now among the gen zers, which we applaud. We are all for this. This. Yeah. Trends.

[Rachel Cruz]

Mindful buying.

[Jade Warshaw]

Yeah. But the idea is that again, shoppers are now cautioning each other to be slower when they're making purchases, not go off of emotion. And even if there are deals and promotions, still wait to see if you need it. Don't fall for those traps. Wow. Which is very smart. So, yeah, the whole idea of spending and consumerism has always been something we've talked about here. But the slow shopping. Yeah, we are all for Gen Z.

[Rachel Cruz]

This is wild. This is wild and crazy to me.

[Jade Warshaw]

And then. And then there's another one. And then you're ready for this one. Okay, this is on TikTok. This is the latest financial trend. It's called under consumption. Core is what they're calling it, where it basically means that you don't buy anything, that you don't need what A.

[Rachel Cruz]

Time to be alive.

[Jade Warshaw]

So you just use what you have already, and that's all. And if you, you know, actually have something you need, then you can buy it. But if it's just something you want, we're not buying it. And they're calling that under consumption core, which, again, has been around forever. Jay, you know, this whole idea of, like, you know, being. I don't know. I hear these terms and I'm like, I don't. I don't know what it means. Okay, Kelly may be able to tell us. She. I feel like she's, like, in the trend.

[Rachel Cruz]

She's like, I don't know either.

[Jade Warshaw]

Yeah, but Under Consumption core is what they're calling it, so. But. But. But again, this consumerism and this idea of what we've been teaching at Ramsey for decades is, yeah, if you don't have the money, don't buy it. Your needs versus wants is always something to consider because there will always be a new and better thing. But if you don't have the money, don't buy it. So I'm glad that Gen Z's. This is good.

[Rachel Cruz]

This is a good time.

[Jade Warshaw]

And it reminded me of. There's a Saturday Night Live old skit. Old skit with, like, Steve Martin. Oh, yeah, Amy Poehler, I think. Do we have it? Okay, let's. Let's play that. This is. This reminds me of. I just can't get these numbers to add up.

[Caller]

Like, we're never gonna get out of this hole.

[Jade Warshaw]

Credit card debt. Does it ever end? Maybe I can help.

[Advertisement Voice]

We sure could use it.

[Jade Warshaw]

We've tried debt consolidation companies.

[Advertisement Voice]

We've even taken out loans to help make payments. Well, you're not the only ones.

[Jade Warshaw]

Did you know millions of Americans live with debt they cannot control? That's why I developed this unique new program for managing your debt. It's called don't buy stuff you cannot afford. Oh, let me see that. If you don't have any money, you should not buy anything.

[Caller]

Hmm.

[Jade Warshaw]

Sounds interesting.

[Advertisement Voice]

Sounds confusing.

[Jade Warshaw]

I don't know, honey, this makes a lot of sense. There's a whole section here on how to buy expensive things using money you save.

[Caller]

Give me that. And where would you get this saved money?

[Jade Warshaw]

I tell you where and how in chapter three. Okay, but what if I want something but I don't have any money? You don't buy it.

[Advertisement Voice]

Well, let's say I don't have enough.

[Rachel Cruz]

Money to buy something.

[Advertisement Voice]

Should I buy it anyway?

[Caller]

No.

[Jade Warshaw]

Now I'm really confused.

[Rachel Cruz]

It's a little confusing at first well.

[Jade Warshaw]

What if you have the money? Can you buy something? Yes. Now take the money away. Same story. Nope. You shouldn't buy stuff when you don't have the money. There you go.

[Rachel Cruz]

What a concept.

[Jade Warshaw]

Such common sense. Such common sense. So, yeah, America, follow, follow. Ginz ears. You know, when you're gonna buy something, especially this holiday season, be a little slower with your purchasing. Make sure you have the money for it. And, you know, if it's not a. If it's not a need, maybe you skip it.

[Rachel Cruz]

Maybe you skip it and live in.

[Jade Warshaw]

That under consumption core trends, which is so great.

[Rachel Cruz]

I feel like it should just be under consumption.

[Jade Warshaw]

Yeah, I don't know.

[Rachel Cruz]

That's it.

[Jade Warshaw]

Talking to two millennials here.

[Caller]

Wow.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Oh. All right. Let's go to San Antonio, Texas, and Regina is with us. Hey, Regina. Welcome to the show.

[Caller]

Hi. First off, I'm 26, and the fact that I only know about the under consumption makes me feel so old. But you also forgot about the de influencing. So now influencers are trying to de Influence people.

[Rachel Cruz]

Yes. I love. I actually really like that de influencing trend.

[Jade Warshaw]

Yeah, same idea. Well done. Thanks, Regina. Thanks for the keeping us young.

[Caller]

I got you.

[Jade Warshaw]

So good. So good. How can we help?

[Caller]

So, yeah. So obviously right now I am super. Not obviously, but I'm on the show now. So I am Dave crazy right now, and I'm in baby step two. And I feel like I don't know if I've made his name a cuss word just yet, but I do know that a lot of my friends, they know I'm on it and they support me. And I feel like some have been trying to spread the word about it, but I have a little cousin, and she looks up to me a whole lot. She just turned 18. She just entered college for the first year. And I really want to try to go about that conversation of finances with her, because I know when I was 18, my prefrontal lobe wasn't developed yet.

[Rachel Cruz]

Right.

[Caller]

So, like, anything that anybody would tell me, I was like, yeah, yeah, yeah. Like, my mom swears she told me not to, you know, get debt. But she also. I remember her telling me that I could get a credit card when I was 18. So that's all I remember.

[Jade Warshaw]

Sure.

[Caller]

And so I'm trying.

[Jade Warshaw]

Oh, no. Oh, no. Did we lose her? Oh, maybe put her on hold. Okay. Yeah, shoot. Okay, Regina, we're going to answer your question. I think our phone systems just got a little crazy.

[Rachel Cruz]

That was like the old school fax machine.

[Jade Warshaw]

That's what it did sound like.

[Rachel Cruz]

Sending us a fax.

[Jade Warshaw]

Yes. Okay, so we'll talk through this. Regina, I'm so sorry we had to cut you off because of that.

[Rachel Cruz]

That's all.

[Jade Warshaw]

Can't ask any follow ups. But yeah, to be a great influence, I think is number one. I appreciate you even thinking about people in your life and saying, oh, my gosh, I know someone does look up to me and watches my decision making and I want to be able to help them when it comes to this. So first, I'll give you my number one is always, always, always people are going to see what you do more than what you say. And so she's going to be watching you do this. And she may be watching you, you know, take on an extra job to pay off debt. She may be watching you say no to a vacation that all your friends are taking. And you're like, yeah, I'm not going because I'm paying off debt. Like, as you live this out, that is going to speak so loudly because even like your parents, you know, yeah, they're like, you know, they may have said something, but then also they're like, yeah, but you can get a credit card and they probably live with credit cards and live with some debt. And you just kind of follow what you know and what you see how people act as you watch them. And so by you just simply living, just know, like, that is a great starting point because she's going to be seeing what you're doing and realizing, oh, she's not stressed about money. Yeah, coverage has. Has margin to spend and she's like saying no to things and she's going to be watching your decision making.

[Rachel Cruz]

I agree. I think seeing that, I think there's a couple areas that. That really applies and weird. I think it's the same areas that we talk about couples being aligned on. People don't like for you to just strike up a conversation out of the blue about their money, their politics, their religion, how they raise their family. Right. It's like when you do that, it's like, wait, wait, wait, whoa, whoa, whoa, whoa. So to just like, even if it's in love, like bringing it up, it kind of feels invasive because those topics are extremely invasive. And so I think Rachel's exactly right. Let your actions speak louder than your words and they truly will like the fruit. You know, a tree by the fruit it bears.

[Jade Warshaw]

And if you guys do have a great relationship, you know, sitting down with her at lunch and just telling her what you're doing and just be like, oh, my gosh, okay, I Found this new show and I'm so excited about I'm paying and talk about what you're doing and not point the finger at her and just say if you ever have any questions, please, like, call me. I want to talk about this. And I would love to help. If you want help, like, I'm here for you. You know, just offering that door to be open. Thanks, Regina, for the call. Thanks, everyone in the booth. Thank you, Jade, for a great hour. And we'll be back. America. This is the Ramsey Show.

[Advertisement Voice]

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[Jade Warshaw]

Of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, love, and create amazing relationships. I am Rachel Cruz hosting this hour with best selling author Jade Warshaw and we are answering your questions about life and money and relationships, career, anything and everything. We are here for you. So first up, we have Stacya in Nashville. Welcome to the show.

[Caller]

Hi, it's Stacey.

[Jade Warshaw]

Stacey, I'm sorry, you're totally fine.

[Caller]

I've heard it for all 33 years of my life. I bet you first and foremost, I am unapologetically fangirling. You guys are some of my favorite hosts and personalities ever in the history of the whole show.

[Jade Warshaw]

Oh, I'm so nice. I'm glad we're here for you today.

[Caller]

Oh, absolutely. They keep it 100 all the time. Rachel you're just the best self.

[Rachel Cruz]

You are kind. Thank you.

[Caller]

Yeah. Well, I just a little context. I have been following the principles of Ramsey since I was 17. I'm 33 now.

[Rachel Cruz]

Wow.

[Caller]

Two and a half years away from being a baby steps millionaire.

[Jade Warshaw]

Oh, my gosh, that's amazing.

[Caller]

So grateful, like so, so grateful for the principals. I come from a family that does not have money. And so I'm actually calling you today because don't have anyone else to ask this question. So I am in baby step six. My husband and I are in baby step six. We are about eight years away from paying off our house fully. And I know you all say, I know the principles inside and out, but I know you all say to not purchase a second property until your first property is paid off. And so we're in a predicament where we want to purchase land and then eventually build a small home on that land. And so we would love to throw like $50,000 at purchasing land. But I'm wondering, and how to navigate big purchases while in baby step six. Do we just like stay gung ho for the next eight and a half years with like every extra penny going at the mortgage? Or like, when do we have permission to save up a good chunk of money and make a big purchase? And is it okay that that big purchase is toward like one component of a second property?

[Jade Warshaw]

Yeah, it's great. Question. Is the $50,000, will that be enough to cover the land that you're looking at?

[Caller]

Well, that's the thing. I'm from Nashville, Rachel. I know you're familiar with East Tennessee. So, like, we. We know exactly what part of town outside of Chattanooga or East Tennessee that we would want to purchase. And so if and when the right land came available and we were able to jump on it, I want to be able to jump on it. And right now a lot of land is going for a lot less because people aren't buying houses, primary houses, and especially not buying secondary property. So land has been cheaper. And so I'm trying to weigh the options of, like, do we go ahead and like, jump on it if something's in that $50,000?

[Rachel Cruz]

When you say jump on it, when you say jump on it, does that. Is that permission to buy something that's more than $50,000, like, more than the cash that you have?

[Caller]

No, we have. So we have that cash on top. And that's what I'm wondering. Do I. We have our emergency fund, and we have on top of our emergency fund, extra cash, 50,000. Do we throw that at the mortgage? Yeah. I'm like, do we throw that at the mortgage and maybe go get the mortgage pay down a year faster or do we jump on land?

[Jade Warshaw]

Yeah, because the land. Would you guys want to. In your perfect world, would you move there before eight years, or is this, like, in 20 years?

[Caller]

No. So this would just be a second enjoyable spot. We live in the city. We live, like, right downtown in East Nashville.

[Jade Warshaw]

Okay.

[Rachel Cruz]

So this.

[Caller]

This land. This land would be like a little getaway space for us to share with our family and for ourselves, just enjoying for us.

[Jade Warshaw]

Gotcha.

[Caller]

Yeah. Like to get out in the country.

[Rachel Cruz]

When would you start building on it? After this first mortgage is paying off or what are you thinking?

[Caller]

Absolutely.

[Rachel Cruz]

Okay.

[Jade Warshaw]

I would buy the land.

[Rachel Cruz]

Yeah. Why not?

[Jade Warshaw]

Yeah, buy the land.

[Caller]

Okay. I just. I don't know, like, hearing permission of, like. Because it's associated with a second home. Like, did that have to wait until the mortgage and. I don't know. I don't have anyone to ask. Like, how do you, like, wisely go about it? I know.

[Rachel Cruz]

I think it's wise that you're paying cash. It sounds like it's reasonable. You have the money to do it. And I think it really goes back to that teaching of once you pass baby step three things, kind of, you're able to live your life and you're able to focus on the things that are valuable to you and that you want to spend money on. And in this case, you're going to continue to pay the house off, and you're not building the residence before you figuring out your primary residence. So for me, it's. I would. I would do the same thing if I were in your shoes and for sure about that.

[Jade Warshaw]

Yeah. And it's, you know, $50,000, which is a lot of money, but it's also like, that's the price of a new car for some people, and they replace their car and they, you know, they. So, yeah, it's not like we're talking about $500,000. And the house could. Your primary residence could be paid off today or something. It's a reasonable amount of money because how much do you guys make a year?

[Caller]

Combined? We're at 310.

[Jade Warshaw]

That's great. Okay. Yes, I would. For sure. I would. Yep. I would save. And I. And I'll even go a little further because I'm such a spirit. I'm such a spirit that to really get what you guys want long term, if the. If you're looking at their properties, like, gosh, if we had another 10,000. Like, that would be. That. That would even like, like, don't. Because you're not in a rush. Don't cheapen the purchase by just being able to say, we got it. So really look, and I'm sure you guys have done your research, and maybe 50 grand, just enough. And, like, it's perfect. And you're getting shopping, Rachel. Slow shopping. To be able to get, you know, so maybe 50 grand really will get you guys exactly what you want. And that's amazing. But I would also say you guys make great money.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

You're in baby step six. You're doing great. And again, if you're like, you have it, you know, 10 grand more and we be disciplined in this. Don't. Don't let it go crazy. But like, 10 grand more would really get us this view here, this, that, or, you know, whatever it is.

[Caller]

Right.

[Jade Warshaw]

Maybe even pause a little bit. Save up a little bit more and get what you want as well.

[Rachel Cruz]

What do you owe on your current house? Just curious.

[Caller]

We owe 5, 550.

[Rachel Cruz]

Okay. So you gotta. You've got a way.

[Caller]

We're on track. Yeah. We've got about eight and a half years, and my husband gets annual bonuses, and sometimes they're 35, sometimes they're 50. So what we use is like, we just live on the base salary, and then those bonuses can either go to lump sum of the mortgage or they can go to a big purchase. And so we know that those come every year. So I'm like, okay, we could add that and that could be extra going towards land, you know, a nicer piece of land or, you know, it's not going to move the needle a ton and how early we pay off the house. And we're pretty aggressive about paying it off monthly now.

[Rachel Cruz]

Yeah. I mean, the good news is. The good news is, and I'm not saying that this will happen. It doesn't sound like it would. But the good news is if you were to purchase something and then seven years from now, if you change your mind or something in your life changes, it's. It's something that's gone up in value, hopefully, and you could sell it and, you know, you won't have lost anything, so. Because a lot can change in eight years is true. But. Yeah, if I were in your shoes, I'd do it.

[Caller]

Yeah.

[Jade Warshaw]

Would you guys use the land between now and eight years just to go and. I don't know.

[Rachel Cruz]

Yeah.

[Caller]

And camp.

[Jade Warshaw]

And camp and all of that. You would use the lands? Okay. Yeah, that's great.

[Caller]

Absolutely. That's what. And be flexible. Also like kind of camp. And see, where do we want the front of the house? Where do you want the natural light?

[Rachel Cruz]

Yeah, that's fine, totally.

[Caller]

But I just, I look at, you know, lots outside of Chattanooga and East Tennessee all the time and some are going to auction and people just don't have the extra money and so they are going for a little bit cheaper and we don't need a view. We also just kind of want wooded seclusion. So it's just up in the air. I just wanted to get permission, quote unquote permission to make a large purchase, even if it is associated with a second property while in baby steps. It hadn't heard anyone ask about that.

[Jade Warshaw]

Yep, absolutely. Well, I'm glad you called because yes, you have our permission because you're paying cash and it's a reasonable amount compared to what you guys make and overall your financial life.

[Rachel Cruz]

So it's not adding risk.

[Jade Warshaw]

Yep. Nope. It's great. And congratulations. Well done. That's always refreshing to hear. It's kind of that first generation of hey, we're doing something different with our money. And hear that too. Since she's 17, she's been doing this. Maybe not as aggressively in high school as you are when you're working adult, but this is a marathon. It is a long term play. Yes, they are rhythms in your life at which you adopt good money habits and you get to be a point to say, yeah, we want to buy some lands. So I'm so glad you called. This is the Ramsey Show.

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[Jade Warshaw]

Welcome back to the Ramsey show. Up next in Boone, North Carolina, we have Sierra on the line. Hi Sierra, welcome to the show.

[Caller]

Hi. Thank you.

[Jade Warshaw]

Absolutely. How can we help?

[Caller]

So my husband and I are living paycheck to paycheck and I was introduced to Dave Ramsey from my grandmother. Now I have been trying for the past six months and I'm stuck on baby step one and we're not getting anywhere. We had half of baby step one and then everything happened with the hurricane and we're back to zero.

[Jade Warshaw]

Were you guys hit hard? Were you one of the towns?

[Caller]

Yeah, we were. It's okay. It happens. But I'm just, I feel like we can't catch a break and living paycheck to paycheck is so hard for us. I am a full time student, College student. I'm 29 and my husband works full time, sometimes even over like overtime shifts just so that we can get by. And I just, I don't know what to do anymore.

[Rachel Cruz]

What's he bringing in income wise?

[Caller]

About 49 to 50,000 a year.

[Rachel Cruz]

Okay, and when do you graduate?

[Caller]

I have about five semesters left, so I'll be finishing up in 2027.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Wow. Okay. Are you, are you working at all, Sierra?

[Caller]

I'm not, but I pick up pet sitting shifts to try and bring in some money. I tried a full time job and full time college and it destroyed me.

[Jade Warshaw]

Okay, what, what are you getting your degree in?

[Caller]

Biology.

[Jade Warshaw]

And what's the goal with that? What do you want to do?

[Caller]

I went to go work on the coast as a marine biologist.

[Rachel Cruz]

Wow.

[Jade Warshaw]

Okay.

[Rachel Cruz]

Okay. So you're, he's bringing in 49, 000. You're doing pet sitting. How much do you guys see a month? Like after taxes? After everything? What does that look like monthly for you?

[Caller]

It's about three, 3,500.

[Rachel Cruz]

Okay. And what, how are you guys living? Are you renting? What are you paying for rent?

[Caller]

We are renting. We pay a thousand a month for rent.

[Rachel Cruz]

Okay. Yeah. This is tough. The solution that you're looking for. I mean, people live paycheck to paycheck for different reasons. Sometimes it's our spending's out of control and we've got to, you know, reign the budget in and reign the spending in. And sometimes it really is a income issue, and it's. In this case, I think you're creeping up on an income issue. I'm just wondering, what is. What is your husband doing for work? What kind of work does he do?

[Caller]

He makes fiber optic cable.

[Rachel Cruz]

Okay, and. And you said he had a side hustle, too. What's that?

[Caller]

He doordashes.

[Rachel Cruz]

Okay, so I'm wondering. I'm wondering if both of you need to sit down and kind of figure out, okay, what do we both need to do in order to make this work? Because to your own words, it's not sustainable. Are you guys going into debt? Like, how are you covering the overages?

[Caller]

We are doordashing every chance that we can get. Okay, just so, like, I can get to class and we can get food and sometimes his mom helps us out.

[Rachel Cruz]

Okay, so there's not. You're covering the overage then. So there's part of this. And there may be more that you can do income wise, but there is part of this where you've said, okay, I'm gonna go to school for the next three years and I'm going to become a marine biologist. And by me doing that, here's what we've decided. My income is limited, and he's in his career right now. And so there's part of this that you guys have decided by, you know, by choosing this path. And I'm not saying it's a bad thing. It's just we've both understood that for the next three years, it's going to be extremely tight, but there's a light at the end of that tunnel because you're going to be a marine biologist. What's a marine biologist make?

[Caller]

It kind of depends. I'm trying to get a state job, and that can range anywhere from 50,000 to 70,000.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Right.

[Rachel Cruz]

And how are you paying for school right now?

[Caller]

I am pretty set with financial aid and scholarships. I've already finished my associates and.

[Jade Warshaw]

Good for you.

[Rachel Cruz]

Very good.

[Caller]

Went through that with honors. So I've been doing pretty well with scholarships.

[Rachel Cruz]

So no debt? No. Yeah.

[Jade Warshaw]

Do you guys have any other debt or any debt at all?

[Caller]

Yes, I have three credit cards, but it only adds up to about a thousand. Maybe fifteen hundred. I have a car.

[Jade Warshaw]

How much is that?

[Caller]

The total on its 28,000. And I pay $668.

[Jade Warshaw]

There's some money problem, Sierra. You gotta sell that car. Yeah, you gotta sell it.

[Caller]

See, and I'm trying to figure out how to sell it. So I'm not sure because I'm $13,000 flipped on this car.

[Rachel Cruz]

Oh wow.

[Jade Warshaw]

So you, so you owe 28,000 and how much and you're saying you really can't sell it except for 15,000 is what it's worth when I had it.

[Caller]

Because I went and had it appraised at a dealership.

[Jade Warshaw]

Okay.

[Caller]

And they said they can only give me $6.

[Jade Warshaw]

Okay. So don't do the dealership route because they will always give you a much lower rate than what you could actually sell it private sale for. So go on kelly, kelly blue book.com, put in all the info and just see on the high end what you could get for it. Okay. So the dealership told you, how much would they pay for it?

[Caller]

6,000. Oh my gosh.

[Rachel Cruz]

$6,000.

[Jade Warshaw]

And it's a 20 and you owe 28,000. What kind of car is it?

[Caller]

It's a 2017 Jeep Cherokee and I have 162,000 miles on it.

[Rachel Cruz]

Okay, what, what does your husband drive? What's his deal?

[Caller]

He has a motorcycle that's paid for.

[Rachel Cruz]

Got you.

[Caller]

And we have a, we call it a hoopie and it, it's just a really old beater that's also paid for.

[Rachel Cruz]

What about the motorcycle? What's it worth?

[Caller]

About 4,000.

[Jade Warshaw]

Okay.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Yeah, I would, Okay. I think, yeah, I would be selling this car, Sierra, for sure. And even if it's, even if you can only get sixteen thousand for it, I would rather have a sixteen thousand dollar loan than a twenty eight thousand dollar loan. Does that make sense? Like that's gonna, that's gonna change your numbers a whole lot. And if I were you guys, do you guys have kids?

[Caller]

We have a two year old.

[Jade Warshaw]

You have a two year old. Okay.

[Rachel Cruz]

Yeah, I mean I, I might sell the motorcycle and take the 4000 and get a beater car for you and.

[Jade Warshaw]

Then sell your car.

[Caller]

Yeah.

[Jade Warshaw]

I mean honestly, because you can always go back and get a motorcycle again. But you guys, I mean to your.

[Rachel Cruz]

Point, I mean it's going to cut that payment down when she gets a loan for whatever it is.

[Jade Warshaw]

I mean it'd be, yeah, you guys would have an extra 300amonth coming in.

[Caller]

Yeah.

[Jade Warshaw]

So there, and there's decisions here and I think Jade set it up really well and it's a, it's a, it's kind of A hard pill to swallow in life. But it's understanding that, you know, as adults, we make decisions around our life, and not all of them. Yeah. Not all of them are right or wrong. It's not this, you know, oh, gosh, you shouldn't be in school right now. It's not that at all. It is, though. We have decided to do this route, and because of that, we're not going to have a lot of money. Like, we're going to be. We're going to feel broke for three years until I get through school and until I get a job and all that. And in three years, it's going to look different. But in the meantime, what can we do? What other decisions can we make that are going to be adult? Like, decisions that may hurt and they're not fun. But it's things like getting the extra job like you guys are doing. It's selling stuff to see what you can free up. It's getting out of debt and you're freeing up income.

[Rachel Cruz]

Cutting up those credit cards.

[Jade Warshaw]

Cutting up credit cards. Yeah. I mean, it's doing a couple of these. Making some of these decisions within the big decision of the lifestyle you guys have made just to make it easier. Sierra. And that's the thing, is, is we want peace. You know, we talk about financial peace is what we want for everyone. And that peace is going to look different depending on, you know, everyone's situation and, you know, the way they view life and all of it. It's a little bit of, you know, subjective to a degree, but you don't have peace right now. And so what I would fight so hard for is, in these three years, how can we get some peace? And being able to free up some money would bring some of that. And how do we do that? Well, I just listed out a couple options from jobs and selling stuff and all of it. So that's what I was.

[Rachel Cruz]

The long term that you've committed to, like, once she starts working, she's got a great pathway to make $70,000 and.

[Jade Warshaw]

Yeah. And then together with your husband. Yeah. Y'all will be making, you know, 130,000. Yeah, that's before taxes. Like, that's amazing. So the light is coming, but it's getting to the light that I think is really key. And what decisions can we make in between? And these are hard, Sierra. I understand. Like, these aren't fun. It's not always fun, but it's getting you to a goal that you guys want together. And part of that is you still being in school. So I commend you for having a two year old and doing this and, and I'm so sorry about the devastation and your area. We think about you guys so much, so we're praying for you. Thanks for the call.

[Rachel Cruz]

This show is sponsored by Better Help. This month is all about gratitude and most of us have people in our.

[Jade Warshaw]

Lives that we're grateful for.

[Rachel Cruz]

One of those people, for me, is the wonderful Marilyn Fanon. She gave me a chance. She taught me poise and professionalism and she challenged me. But there's one person that we often don't take time to think, ourselves. We don't always acknowledge that we're barely surviving or that we're moving forward or that we're working towards a better life and better relationships.

[Jade Warshaw]

And in a world where everything seems to have gone bonkers, it's not always.

[Rachel Cruz]

Easy to be grateful. So here's my reminder to thank the.

[Jade Warshaw]

People in your life, including you.

[Rachel Cruz]

And sometimes to do that, we need some professional help. We need to talk to someone trained to help us discover true gratitude for ourselves and others, especially in the holiday season. That's why I recommend BetterHelp. BetterHelp is 100% online therapy and you can talk with your therapist at just about anywhere so it's convenient for your schedule. You just fill out a short online survey to get matched with a licensed.

[Jade Warshaw]

Therapist and you can switch therapists at.

[Rachel Cruz]

Any time for no extra cost. This season, let the gratitude flow with BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month.

[Jade Warshaw]

That's BetterHelp. H E L p.com DeLoney folks, the.

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[Jade Warshaw]

Welcome back to the Ramsey Show. Our question of the day is brought to you by why Refi? Why Refi refinances your defaulted private student loans and defaulted means when the borrower can't make the required payments. So if that describes you and your private student loans, contact why refi. They can offer a lower fixed rate loan and they will have it built for you. So go to y refi.com Ramsey today. That's the letter y r e f y.com Ramsey may not be available in all states.

[Rachel Cruz]

All right, today's question comes from Teresa in Wyoming. She says, my husband and I have five girls under the age of 12. Wow. We have been in our home for seven years and we owe $234,000 on it. We love our house and three acre property, but in the past few years, the homes on either side were bought by a man who rents them out to people who work for him. Now we have what looks like a junkyard next door. They've also moved a two bedroom trailer to one of the properties that houses more workers. They dump all their construction materials on their land and regularly burn enormous piles of it. I have complained and the county has been out, but nothing has changed. They walk through our front yard and the woods, which is our property. Recently, the police taped off the woods and a crime scene investigator spent the day. Oh, my gosh. There. And hours. Spent the day in three hours there, I guess is what it should say. So all of that backstory, what should we do? Our realtor has said that we could sell the home for 800,000. That's pretty good. Should we stay because our interest rate is so low and paid off, or should we put up a fence around the property? I've got five young girls to look out for, so please guide me on what to do in this weird situation. Rachel.

[Jade Warshaw]

Wow, man, this.

[Rachel Cruz]

Listen, the crime scene would have got me. I. I would have a lot of questions. She's in Wyoming, so there's like, my mind is going to some shows that I've watched, but anyway, I love that this is worth a lot. I. I wish I knew how close, like, yeah. How close the neighbors are. I'm envisioning more land, I guess, because I'm envisioning Wyoming, but three acres isn't like, isn't huge.

[Jade Warshaw]

Crazy. Crazy. Yeah, yeah.

[Rachel Cruz]

I, you know, I wouldn't let the interest rate keep me there. I definitely wouldn't. I think that you have enough equity that you could probably move on if you wanted to and if you're truly concerned about safety. And I'd make sure to get all the information from the county first and say, okay, are there any violations? Are you planning on doing anything? And if they're not, then I'd probably get to step in.

[Jade Warshaw]

I know, yeah, you're the primary residence of which you live. Some people, there's not a lot of options. You kind of are stuck, you know, depending on your situation, but you want to feel safe. I'm like, that's the one Place in life. Like you can go. Yeah. And. And not have to think. And. And for your kids. Yeah, yeah. Where you're not worried about them.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

Yes. So I may talk to him and just see not what he would change, but if he's thinking of what his long term plans are, because who knows, he could say, oh, yeah, in the next two years, I'm leaving and going somewhere else or whatever.

[Caller]

Right.

[Jade Warshaw]

And then this problem, it's short term. I would not have the conversation with the hopes that you can change the way he does life and all the, you know, how he's lived thus far. That's not going to change.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

But I would be curious what his long term plans are. And if he doesn't have any, then I probably would be moving just to feel. Yeah. Just to. I mean, you have the option, you have great equity and just to feel safe again. I mean, honestly, it's like, golly, I just want to enjoy my house and what's around me versus, like, rolling my eyes every time I go in. And again, some people, there's no option. And you will be in the house that you're in because of interest rates and everything, so.

[Rachel Cruz]

But they've got options.

[Jade Warshaw]

Yeah. It's a, It's a, It's a blessing to be able to say, hey, we can. We can actually make a different move. So I probably would.

[Rachel Cruz]

I would too. I think that there's a soul tax here and a mental calorie tax that you can afford to pay.

[Jade Warshaw]

Yep. I love it. But thanks for the question, Teresa. All right, let's go to Adam in New York City. Hey, Adam, welcome to the show.

[Caller]

Thank you.

[Jade Warshaw]

Absolutely.

[Caller]

I have a question. I. I was in an accident and there was a settlement. I have some debt, about 28,000 total between my wife's credit cards, my credit cards, and what's left of my car payment. We're gonna wipe out our debt the minute we get our payment. But what we want to do is we want to know what we do with the rest. And it's about close to a half a million.

[Jade Warshaw]

Oh, wow. What happened, Adam?

[Caller]

I really can't go into detail.

[Jade Warshaw]

Are you okay?

[Caller]

I'm getting there, yeah.

[Jade Warshaw]

Okay.

[Caller]

And. Yeah.

[Jade Warshaw]

Will you have long term medical issues at all?

[Caller]

I have something that was implanted that.

[Jade Warshaw]

Okay.

[Caller]

It's helping me. Yeah. I really can't get into the whole.

[Jade Warshaw]

Oh, yeah, no, I don't want you to. I'm just thinking for part of this money, if there was going to be ongoing high medical care for you, that that was Me, part of my answer down the line.

[Caller]

I have to get something like get something done again.

[Jade Warshaw]

Okay. I just want to make sure you have the cast for all of that.

[Caller]

Yes, yes. And that's what.

[Rachel Cruz]

And, and also working going forward. Will you be working again or are you disabled or.

[Caller]

Yeah, no, I'm working. Both my wife and I are working.

[Jade Warshaw]

Okay, that's great.

[Caller]

I got back to work. I got back to work. But it was, you know, it wasn't easy, I'm sure.

[Jade Warshaw]

Yeah. Well, I'm glad you're, I'm glad you're doing okay.

[Rachel Cruz]

What is your, what's your combined income, you and your wife?

[Caller]

134,000.

[Rachel Cruz]

Very cool. Okay, so you'll have children. So no children?

[Caller]

No, more like mid-50s.

[Jade Warshaw]

Okay.

[Rachel Cruz]

And how are you living? What's your, what's your house? Housing situation?

[Caller]

We have, we rent the expensive area, but we have about our rent close to 1700amonth.

[Rachel Cruz]

Okay, so you know that you want to pay.

[Caller]

Ridiculous.

[Rachel Cruz]

Oh yeah, yeah, yeah. Well, are you in the city? Like what part of New York?

[Caller]

No, we're not in suburbs.

[Rachel Cruz]

Okay. So you know that you want to pay off the debt, which is about 28,000, right? That's cars, credit cards.

[Caller]

Cars and credit cards.

[Rachel Cruz]

And then you're going to want to put aside three to six months of expenses. That's what we teach here. That's what we'd call baby step three. So in your case, I'd put a put away six months just because you do have some things medically going on. And if I were you, I'd probably put out my out of pocket max. I would just like having that, that I can get to and then the next thing on the list, obviously you should be investing. Once this is done, you should start investing 15 of your income, your wife and you combined every single month just to set you up for later on. But with this 500,000, this might be a good time to start thinking about a long term housing situation that's not renting.

[Caller]

Yes. Right, right. And do we, I mean, so what we're going for is what we need and in the area we need to live in because of work, we just buy the house in cash or I mean as much as we can down on down payment or.

[Rachel Cruz]

Well, what are you pricing out? What is real? If you look at what you'd like to buy, what's it cost, what we're.

[Caller]

Getting settled for and what we're looking for is we could barely even pay it in cash. Well, I was wondering, should I put in A money market account and save up until we find something we like or just put a nice down payment on something that we have a lower.

[Rachel Cruz]

I wouldn't buy something that you don't like, but I also. You want to buy something that you can afford. So that's what that.

[Caller]

That's what I'm saying. Yes. Well, what we like and what we can afford is what are the price.

[Rachel Cruz]

Ranges you're talking about? Give me more numbers.

[Caller]

Okay. The homes that we're looking at for just my wife and I, they're starting at like 450,000.

[Jade Warshaw]

Okay. Okay. So what would be a number that's like. Oh yeah, that's. That feels like a good house for us, Good area. It's what we want. What is that? You said starting at 450, but is that what you're thinking? Around 450?

[Caller]

500. Yeah. 450. 500.

[Jade Warshaw]

Oh, that's great. Okay.

[Rachel Cruz]

Does it weird you out that all to spend and buy outright, is that what you're saying? Does that weird you out to take all this cash and do that?

[Caller]

Yes. And then, and then, and then I feel like I'm like we're, we're house broke after that, you know.

[Jade Warshaw]

Yeah, well, honestly, Adam, that's, that's probably what I would, that's what I would do. I mean, and again, I, and don't feel the pressure to pay for it all in cash. But if you see a house that you like and you guys have to take out a fifty thousand dollar mortgage, I would do that. And it will feel house poor. But that means the largest expense in your life. There is no expense to it. So it's the opposite of yeah, you guys can be able to cash flow so much retirement out of this and put so much money in investments. That's what I would do. That would be a huge way to get a jump start on this. Us. Yep, that's exactly what I do too. Thanks for the call, Adam.

[Rachel Cruz]

Listen, the housing market is crazy and if you've been on the Internet, here's the sentiment. Affording a home is impossible and you're doomed to be a renter for the rest of your life. Right? Wrong. George Camel here. Listen, finding a home you love within your budget is possible and I'm excited to help you get there with our brand new course, how to buy a home you can actually afford. From saving a down payment that fits your budget to making an offer that sellers can't resist will cover it all. So if you're ready to seal the deal on the right home for you. Take the course. [e-mail] course. That's ramsaysolutions.com course.

[Jade Warshaw]

Welcome back to the Ramsey Show. I'm Rachel Cruz hosting today with best selling author Jade Warshaw and we are taking your calls. And up next we're going to north of the border. Jade, we're going to Toronto, Canada.

[Rachel Cruz]

All right.

[Jade Warshaw]

And we're gonna chat with Diana. Hey Diana, welcome. Welcome to the show.

[Caller]

Hi, how are you?

[Jade Warshaw]

We're doing great. How can we help?

[Caller]

So basically I am 48, I've got no kids, I'm single. I've got my mortgage that I've got about 13k left.

[Jade Warshaw]

Nice.

[Caller]

I have, yeah, I have some investments, 38k. But I can't touch until I'm 55. Which unfortunately, I mean, well, fortunately that's right around the corner. But my thing is I haven't been working for a year. I quit my job because I needed a change. My salary is only 55k so when I do eventually get a job, you know, it's not very high. But in the year I've been paying my maintenance and my mortgage on my credit line, so I've accumulated another 10,000 year. But here's the thing. This is not the first time I've been in this situation. I've quit my job before and I've been, you know, not wisely paying my mortgage and my, on my credit line. But that's been a little buffer for me. And then I'll get a job and I'll, and I'll pay it down.

[Rachel Cruz]

That's such a risky way to live.

[Caller]

It is, it is. And you know, that's what we call cash poor. Right. Where you know, I'm not making a lot of money, but I'm smart with my money. You know, I'm not paying to get my nails done and stuff like that. I'm, you know, putting every cent that I have to that mortgage when I am making money. But here's my main question. I have no kids and my condo is worth about 700k. Right. Why am I rushing? Because I only have 13k left on this mortgage. Why am I rushing to pay down this mortgage?

[Rachel Cruz]

I don't know. I want you to answer this question because you laid out a very interesting plan that I don't understand why you're, it's, it's strange to me that you are rushing to pay off your mortgage and that you're going into debt to do it without a job. This, this is what I would call emergency Mode. But I feel like you're kind of living it like a normal lifestyle. When do you plan on working again?

[Caller]

Well, I'm looking for a job, but here's the thing here in Toronto, like salaries are very low and I'm being, I'm cherry picking, let's be honest.

[Rachel Cruz]

But what caused you to, what caused you to quit your job before you had another one lined up? Was something bad going on?

[Caller]

Yeah, I just didn't. I was sick of it. I was working for a company eight years and I was tired of it. Like I was just. I need a break.

[Jade Warshaw]

How are you eating, Diana? Like, and I'm not being facetious, honestly, like how, how are you having money to live?

[Caller]

Oh, again, that's why I've accumulated the 10,000, because I've been paying.

[Jade Warshaw]

You're so you've been paying your mortgage and your lifestyle off this line of credit.

[Caller]

So that's what. That 10,000 is my mortgage. Yeah. So that's, I mean, 10k accumulated over a year.

[Rachel Cruz]

It could have been a lot worse.

[Caller]

Exactly, exactly. And you know, and technically it's only 8,000. It's crawling up, I'm rounding up here. But the thing.

[Jade Warshaw]

$8,000. Did you have savings?

[Caller]

You know what, I had a little bit of savings and I was technically collecting EI for like 6 months. So let's be honest, only 8k is only really.

[Jade Warshaw]

I gotcha.

[Caller]

So I'm very much the way everything.

[Jade Warshaw]

Yeah, I think that there's. Yeah, I would say a couple of things, Diana. So the rush to pay off the mortgage because you have no other debt but the line of credit. Correct, the $8,000 and then that's. That's it. So the rush to pay off the mortgage, number one, we don't tell people to rush to pay off mortgage their mortgage. We say that it is in the baby steps at which after you're investing, you don't have kids, so there's no kids college. Then you would pay extra on the house. So it's not this urgency to pay it off quickly, but it is an intentionality that you want to pay it off faster than for Americans, the typical 15, 30 year mortgage. We want, we wanted to do it faster than that because your housing line item in your budget, whether it's rent or a mortgage, is always usually the most expensive thing that you pay for every single month. And when that's freed up, that means you have all of that money. And for some people, I mean it's a thousand or more dollars that's freed up every single Month that you can turn around and use for your life or to invest or all the above. Right. So that's the purpose of paying it off. It's not if you have kids or not. It's truly a line item issue in a budget. And when that's when your house is paid off, not only is there emotional freedom because you don't have payments, but there's also a financial freedom because you don't have payments. So for me and you, I mean, you have. I mean, you don't have a lot left. $13,000 on a. Did you say $700,000 condo. I mean, that's incredible, Diana. But I want you to work. I mean, I don't want you to sit there and, like, be racking up debt. And it may not be the job you want, but in the meantime, I would be getting something to earn some kind of money to live off of. So you're not living off debt.

[Rachel Cruz]

Yeah. Because you plan on living here, right? Or is. Do you have a big plan to sell this and get access to the money? Like, what. What are you thinking? Long term? And by long term, I mean, like in the next eight years, five years?

[Caller]

Yeah. Okay, so. And here's the thing. I just got back from Jamaica because I was like, look, I know it's not wise. Let's add another couple of grand on that.

[Rachel Cruz]

That. Diana, you're so different. Hold on, hold on.

[Caller]

But only. Only because I haven't traveled in seven years. You know what I mean?

[Rachel Cruz]

No, I don't. Diana, I have to tell you, I don't know what you mean.

[Jade Warshaw]

You're going into debt for a vacation. You don't have a job. How much was Jamaica? How much was Jamaica? And how are you paying for it?

[Caller]

It was only two grand.

[Jade Warshaw]

So you're telling me. I'm not kidding. You're telling. You're telling us. This is great, by the way. I really appreciate you calling him because.

[Rachel Cruz]

He'S a free spirit. You're a true free spirit.

[Jade Warshaw]

You got the $8,000. And you're telling me for a full year you have lived off of 8,000 with, I understand, six months you were getting some unemployment and you took a $2,000 trip. So technically, you only had $6,000 that you were using. I just don't know if I believe your numbers. I feel like that's impossible.

[Caller]

Well, eight grand, because let's be honest. That. That. That credit card payment is this month. So that'll push me over to the 10,000.

[Jade Warshaw]

Now we're at 10,000.

[Caller]

Yes, that's right.

[Jade Warshaw]

So, Diana, listen, you're. You're smart. You've. Because you've, You've paid down this condo. That's the reason I'm giving you credit.

[Rachel Cruz]

Okay?

[Jade Warshaw]

You paid down this condo, so you have, have something in you that works hard. And you are smart when you're making an income. But you're not ma. I mean, this isn't smart. The, like what you've been doing so far. The decisions in this last year are, are really. It's just interesting.

[Rachel Cruz]

It has the ability to ruin what you have built if you keep this up. And that's my biggest fear.

[Jade Warshaw]

It's a rhythm and a pattern that's begun. And I'm. And I'm scared for you to stay in that long term because that it will be financial disaster. You've made so much progress financially, so much in your life. I mean, you look at your condo, I mean, seriously, like, it's amazing. I just don't want. You keep going backwards because there's not a job that's paying you what you want. Like just get a job and pay something.

[Caller]

See, and that goes into my next question because my mentality, maybe it's a good thing I'm calling in because I'm like, maybe I should take another year off and just travel, just enjoy my life.

[Rachel Cruz]

Look, look, I get it. Traveling is fun. I'm right there with you. Is it possibly. Is it possible you don't know what you would want to do professionally and instead of figuring it out, it's easier to just.

[Caller]

Because let's be honest, I don't want to get another admin customer service position where I'm only making 55k. You know, the fact that I was able to pay my mortgage and all that stuff.

[Rachel Cruz]

If you could do anything you wanted to do professionally, like if there was no barriers, what do you think you do?

[Caller]

I don't. I don't know. That. I don't know.

[Rachel Cruz]

So you're. You want to go on an Eat, Pray, love journey and figure out what you want and I'm.

[Jade Warshaw]

About the travel. I just want you to have money to do it.

[Rachel Cruz]

I do too. I do too. Okay, so this is a fun call. I don't think that we're going to convince you to change your philosophy on life right now. I mean, I hope we can, but I think you're. I think you're in a mode right.

[Caller]

Now, but you're really just look, because I think. Because I have the cushion, because my mortgage.

[Rachel Cruz]

Because worst case scenario, you. Here's the Thing. You can't. You can't out earn bad spending habits for long. And although you do have this equity built to your own point, it's not like you're saying, you know what, guys, I've got 600,000, you know, $777 of thousand dollars of equity here. I'm gonna sell it, and I'm gonna travel the world and use that as my nest.

[Jade Warshaw]

That would be a yes.

[Rachel Cruz]

That's different. But you're holding on to it, and you don't seem to have a plan to sell it. And for that reason, you could look up and really have racked up a lot of debt.

[Jade Warshaw]

And you're starting. Yeah, I mean, you're starting halfway to where you were. You're just making. You have great progress. So keep at it. So I'd get a job, but Diana, hold on the line. Kelly's gonna pick up. We're gonna give you Ken Coleman's book. And in the book is a get clear assessment, because I want you to get some. Some focus on what you love. I think you. I think you have a lot. I mean, you have a lot to offer the world. You offered us a lot.

[Caller]

You did.

[Jade Warshaw]

You were fun. I appreciate the call, Diana. Thanks to all the guys in the booth. Thank you, Chade. And thank you, America. Listen on the Ramsey app. Coming up in the next hour, YouTube and podcast ends now.

[Rachel Cruz]

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