Normal Is Broke—Don't be Normal!

Summary

The Ramsey Show: "Normal Is Broke—Don't Be Normal!"

Date: October 28, 2025
Hosts: Rachel Cruze & Jade Warshaw (Ramsey Network)

Episode Overview

This episode centers on breaking free from "normal" financial habits—which, as the hosts humorously but firmly remind listeners, often means staying broke. The show features live calls from listeners across the U.S. seeking advice on everything from life insurance and car purchases to crushing debt and home-buying. Rachel Cruze and Jade Warshaw, the episode’s guiding voices, reinforce Ramsey Solutions’ cornerstone principles: avoid debt, build wealth steadily, and make money decisions rooted in common sense—even (or especially) when those decisions seem “weird” compared to societal norms.

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Key Discussion Points & Insights

1. Beware of "Normal" Financial Habits

• Theme: The pervasive American financial culture of debt—particularly car loans, oversized mortgages, and whole life insurance—is "normal," but it keeps people broke.
• Memorable Quote:
  • Rachel Cruze (00:12): “Normal is broke and common sense is weird.”
• Advice: Pursue "weirdness" by living within means, saving intentionally, and actively rejecting consumer debt.

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2. Whole Life Insurance vs. Term Life Insurance

• Caller: Nick from Kansas City (00:42–08:27)
• Situation: Nick paid into a whole life insurance policy since 2008, with disappointing cash value returns.
• Key Takeaways:
  • Whole life policies combine investment and insurance—doing neither job well.
  • Nick would have accumulated far more by investing the difference in the market.
  • Term life insurance is promoted as simpler, much more cost-effective, and the only type Ramsey recommends.
• Practical Advice:
  • Don't cancel whole life until term is in place.
  • Use companies like Zander Insurance to shop for the best term rates.
• Notable Quotes:
  • Jade Warshaw (02:09): “I try to get out of it immediately—today.”
  • Rachel Cruze (03:17): “It's one of the worst financial products… you never get ahead.”
• Action Plan for Listeners:
  • Get term life coverage, then cancel whole life.
  • Use the freed-up cash to max out retirement accounts, aiming for 15% of income.

Timestamps for segment: 00:42–08:27

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3. Should I Finance a Car to Escape “Cheap Car Chaos”?

• Caller: Matthew from Dayton (11:23–19:19)
• Situation: A series of bad luck with used cars led Matthew to consider a car loan.
• Host Response:
  • Bad luck is not a reason to abandon cash-purchasing principles.
  • A car loan is the “worst type of debt.”
  • Don’t let frustration or impatience push you toward unnecessary debt.
• Notable Quotes:
  • Jade Warshaw (13:47): “I think the issue is you just want a nicer car and you’re hoping this can give you an excuse to get one.”
  • Rachel Cruze (17:34): "The tree is gonna be like, 'Hold on—we can’t fall on a Mercedes!’"
• Guidance:
  • Stick with buying what you can afford in cash.
  • Avoid car loans at all costs; use insurance payouts or additional savings to upgrade your car over time.

Timestamps for segment: 11:23–19:19

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4. Tackling Massive Student Loan Debt and Family Budgeting

• Caller: Joel from Atlanta (21:55–30:59)
• Situation: $287k in student loan debt; new baby at home; budget feels pinched.
• Key Points:
  • Pause retirement investing temporarily to focus all firepower on debt.
  • Use income-based repayment plans only if you use the savings to accelerate principal payments (“extra firepower”).
  • Maintain a minimal $1,000 emergency fund during aggressive debt repayment, even with a baby—it’s about keeping momentum.
• Emotional Insights:
  • Debt can limit life choices, leading to regrets—especially when starting a family.
• Notable Quotes:
  • Jade Warshaw (25:49): “If you take all of the extra money that it saves you and put it on the smallest debt… it’s giving you more firepower to knock that small one out.”
  • Rachel Cruze (29:21): “…Debt takes your freedom and it takes your options and it sucks."

Timestamps for segment: 21:55–30:59

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5. Navigating Job Loss with a Financial Cushion

• Caller: Michael from Boston (33:17–40:33)
• Situation: Facing a layoff, but with $100k in cash and a year’s severance pay.
• Strategic Advice:
  • Pay off small debts with cash reserves.
  • Maintain a six-month emergency fund.
  • Keep investing and consider putting extra funds toward the mortgage—but wait until new job is secured for maximum flexibility.
• Encouragement: The situation is an inconvenience, not a crisis, thanks to proactive saving. (See 37:44–40:33.)

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6. Overcoming the Emotional Barriers to Paying Off Debt

Question from Jamie (55:18):

• She’s sitting on $300k cash and $100k brokerage, but keeping $80k in car loans and a $450k mortgage because it “feels safer.”

• Key Insight:

  • Debt is risk, regardless of the amount of cash you have.
  • True net worth is assets minus liabilities—don’t fool yourself with large savings balances if you’re drowning in debt.
  • The math is “laughing at you” if you keep expensive debt while keeping cash for comfort.

• Notable Quotes:

  • Jade Warshaw (60:05): “If you owe $450k on a mortgage… you owe. You owe $50,000—nothing is yours.”
  • Rachel Cruze (58:18): “People would rather be comfortable in the wrong thing than stretch to do something that is right.”

• Advice: Confront the fear, pay off the debt, and experience the peace of true ownership.

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7. Irregular Income and Budgeting the Baby Steps

Caller: Chad (60:59)

• Fluctuating, seasonal income (repairing hail-damaged cars).
• Advice:
  • Build a “peaks and valleys” fund to cover essential expenses during lean months.
  • Only throw “extra” toward debt after basic annual budgeting is secure.

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8. Prioritizing Major Life Events: Weddings, Down Payments & Investing

Caller: Andrew from Chicago (77:05)

• Saving for a wedding & a home—how to prioritize vs. investing 15% for retirement?
• Rachel/Jade's Rule of Thumb:
  • Baby Step “3B”—save for down payment alongside emergency fund, even before consistently investing 15%.
  • A brief pause (≤3 years) on retirement contributions is OK for major one-time goals.

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9. Making Family-First Decisions in High-Cost Areas

Callers: Jamie and Nancy (84:13 onward)

• Should stay-at-home parenting be funded by pulling from savings in a high-cost area?
• Guidance: It's acceptable for a defined period if you have a clear threshold (e.g., never below $100k cash).
• Key: Couples must set boundaries so savings don't vanish without plan.

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10. Should Dad Be a Stay-at-Home Parent?

Caller: Michael in Seattle (107:09–113:26)

• Wants to be a stay-at-home dad with a high-earning wife.
• Advice:
  • Run a detailed, mock budget including only her income.
  • Ensure home costs (preferably ≤30% of net income) are manageable.
  • If a rental property is barely profitable and presents risk, sell it to bolster emergency savings.
  • Don’t let convenience or number-blindness dictate big life changes.

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11. DIY Home Expansion & Mold Trouble

Caller: Mary in Oregon (97:18–106:21)

• Family outgrew mobile home; husband built illegal addition, which failed due to mold.
• Hosts’ Recommendations:
  • Be open to moving or renting during solution.
  • Don’t let pride or clinging to property override health and financial sustainability.
  • Consider long-term solutions (building permanent home) vs. short-term “cheapest” fixes.

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12. Pension Lump Sums vs. Higher Monthly Benefits

Caller: Tracy in California (119:05–124:54)

• Teacher facing choice: lower monthly pension with upfront lump sum, or higher monthly only.
• Hosts’ Take:
  • Take the lump sum for more control, especially since couple already has a solid portfolio and other pensions.
  • Lump sum can be invested and grown, not just consumed.

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Notable Quotes & Memorable Moments

• Jade, on cars and bad luck:
  • “Mayhem follows you no matter what, my guy.” (17:43)
• Rachel, on being honest with your partner:
  • “Starting off marriage with hiding the pots and pans, Trey, we don’t want to do that!” (73:24)
• Jade, on financial psychology:
  • “So much of what we teach is a big question mark to people, because people have been in debt their entire life.” (55:41)
• Rachel, on emotions vs. logic:
  • “Sometimes our emotions haven't caught up with the reality of what we're living.” (49:15)
• Rachel, on making changes:
  • “If you want to get back into debt, you can always get back into debt. Like, there’s a whole industry waiting for you.” (59:04)

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Key Timestamps

• Whole life insurance vs. term: 00:42–08:27
• Car loans and bad luck: 11:23–19:19
• Massive student loans/new baby: 21:55–30:59
• Layoff with six-figure savings: 33:17–40:33
• Emotional roadblocks to paying off debt: 55:18–60:52
• Irregular income budgeting: 60:59–65:00
• Big life transitions (marriage/home buying): 77:05–84:02
• Stay-at-home dad, home affordability: 107:09–113:26
• Illegal home DIY dilemma: 97:18–106:21
• Pension lump sum vs. monthly: 119:05–124:54

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Episode Takeaways

• Don’t be normal—most “normal” financial products and habits keep you broke.
• Whole life insurance is almost never a good deal; term is better for nearly everyone.
• Never take out a car loan if there’s any way to avoid it.
• Use savings to pay off debt, even if it feels emotionally risky; true net worth matters, not just assets.
• If facing job loss, a strong emergency fund and open communication are game-changers.
• “Weird,” cash-based, and debt-averse financial strategies are the real path to wealth and peace of mind.
• Honest, transparent communication—whether with a spouse, fiancée, or yourself—is essential for lasting financial success.

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Closing Note

The Ramsey Show's message is clear: "Normal" is broke, but there is a tried-and-true path to financial peace. That path may feel “weird” in a debt-riddled world, but it empowers people to build true wealth, reclaim their options, and reduce stress. As Rachel Cruze aptly summarized:

“There’s ultimately only one way to financial peace, and that’s to walk daily with the prince of peace, Christ Jesus.” (127:38)

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Transcript

[Host/Announcer]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Rachel Cruze]

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit union studio. This is the Ramsey show and I'm Rachel Cruz hosting this hour with personal finance expert and good friend Jade Warshaw. So we're answering your questions. You can give us a call. 888-825-5225. All right, starting off, we have Nick in Kansas City. Hey, Nick, welcome to the show.

[Host/Announcer]

Hi.

[Caller]

How are you guys doing?

[Rachel Cruze]

We're doing great. How can we help?

[Caller]

So I've had a life insurance. I believe it's a whole life insurance policy that my dad had started for me in about 2008. We've been paying about $500 a month into that policy since then. And I was looking at it with my representative and I only have about 150 in there. But I've had it for so long that I don't it from the research I've been doing, it feels like I should have been. Should have never done it. But it seems like it's mostly front loaded. And so I don't know if I should stay into that, pull that money out, put it into something different and also what I could do, what kind of products I could explore now that I'm making more money than way back in 2008, what I should be putting my money into. I kind of decided I want to start a Roth IRA for my wife and I and to start and then I have some extra money after that and I wouldn't know where to go after that.

[Jade Warshaw]

So you said the cash value is only 150k. What's the death benefit only 500. And how much did you say you've paid in 500amonth? Oh my gosh. Since 2008.

[Caller]

Yes.

[Jade Warshaw]

Oh, my word. Yeah, I mean I'd get.

[Rachel Cruze]

I'd almost 18 years. Yeah.

[Jade Warshaw]

I try to get out of it immediately today.

[Rachel Cruze]

Yeah, for sure. I mean, these are. It is. It's one of the worst financial products, honestly, that's out there. I mean, when you look at whole life or universal life, it's so crappy. Because what you're seeing. Seeing is exactly what people experience because they're trying to mix an investment with insurance and you never end up. You never get ahead. You really don't. And so versus if you had taken a, you know, you know, just a policy that. Yeah. A term policy that's so significantly cheaper and getting as much Coverage. I mean, if you're a healthy young guy, you're. You're only going to pay 20, 30 bucks a month. Like, it's not a lot. And if you had invested that remaining amount just in a mutual fund or in an index fund or a brokerage account, like, what it would have been with the market. So I think. I'm sorry to say, Nate, I feel like you're experiencing the. The crappy product that whole life insurance is. And if you were to get out of it, is your next question. Have you researched doing that? Because different companies, I mean, there's different holdings and fees and all of it. Have you looked at. You just went ahead and cashed it out?

[Caller]

Yeah, a little bit. I have. And it. I'll be honest, that's why I've called you guys, because I am so confused about the penalties. The. I just. I'm. I'm so confused. I feel like I've made a lot of good decisions in my life, but this was one horrible one.

[Jade Warshaw]

Yeah, I would call them today. I mean, obviously you would. You're going to lose the death benefit. Like you're. Because you're canceling the policy. But some of that cash value should end up rolling to you minus fees. So I would call and find out exactly what that is. And then once you feel good about the information. Yeah, just cancel it because it's not serving you. If you had taken that same money and invested it just in an index fund, it would have been more than double by now. It would have been closer to $300,000. So I think we both agree that that wasn't the best way to invest that money. And then if you're looking for coverage. Yeah. Then there's just go to term.

[Rachel Cruze]

Yeah. I would contact Zander, Nick Zander Insurance, because they'll shop their mortgage. They basically shop companies to get you the lowest rate for a term life. And I would go ahead and do that. I would do a term life. Before you cancel the whole life just because you have a wife. Do you have kids?

[Caller]

Yeah, I have two kids.

[Rachel Cruze]

Yeah. So I would make sure. Before you cancel the whole life policy, get a term in place again. It's going to be very inexpensive. You and your wife both need a policy and. Yep, do that. Then cancel the whole life. And once you get that cash out, like, what just Jade's saying is, then you can start applying it actually to invest. That's actually gonna make you money.

[Jade Warshaw]

Now, when you. When this was purchased, was the intent to build wealth or was the intent for insurance Purposes for life insurance. What was the intent?

[Caller]

The intent? Well, my dad did it with one of his friends and he was. He's been paying for it for most of the time. I did, I worked for him, for my father, but I didn't actually. I mean, I wasn't making a lot of money until maybe 2017. And since then it's been, everything's been great. But if the insurance was just to make sure that after I was married and that all, anything that I had, debt wise, was going to be paid off.

[Jade Warshaw]

Yeah. So that's, that's a good word to the wise. When you're purchasing insurance, it should just be that it doesn't have to be married with any other sort of investment thing. Insurance is insurance. Investments are investments. They're separate deals there. And so just knowing that going forward, I mean, it's a really good call and a really good question because I think people get caught up in whole life all the time.

[Rachel Cruze]

Yeah. So the next step, Nick, when we're talking about investing, do you guys have an emergency fund in place?

[Caller]

Yes.

[Rachel Cruze]

Okay.

[Caller]

So probably too much.

[Rachel Cruze]

Probably too much, though. What you said you're just covered, Nick. You're just covered. Covered all the way around.

[Caller]

Like I said, I've done. I've made a lot of good decisions in my life.

[Rachel Cruze]

Sure.

[Caller]

But my retirement is not one of them.

[Rachel Cruze]

Okay, so then we. Let's be looking at that next. Yes. So the Roth IRA you mentioned. Yes, absolutely. And your wife, even if she's not working, she can open up a spousal Roth ira. So I would do those two as well. I think the limit this year, if you get it all in Place, is 8,000. And it may, it. Sometimes it changes year to year, but you can fully fund that. If you can. I mean, for this year, which would be amazing. And then be looking into. Do you have a 401k at work?

[Caller]

My wife has a 401k.

[Rachel Cruze]

Okay.

[Caller]

I do.

[Rachel Cruze]

You do not. Okay, perfect. So just as a, as a household, you know, you want to be investing 15% of your income. So I would do those Roths first. Then your wife needs to be looking at her 401k and go, go ahead and go up to the match as well, which you guys can do both. Yep. That's great. And then anything beyond that, you guys can continue to throw money. Her 401k, if it's a Roth, that's a great option. And then some people, you know, want flexibility outside of retirement. So you could look into other options, like, you know, an index Fund, a brokerage account, a mutual fund. But all of those, again, they're not going to have the tax advantage like retirement. So we would say 15% of your income needs to be going straight into retirement. So that is 401ks, Roth IRAs. And then anything above that, once you guys pay off your house and everything, you can look into some other options, which I feel like you guys. I mean, like you said, you're smart. I mean, you guys have made some great decisions so far. It's just this whole life policy sucks, and I feel like you're feeling the repercussions of that. Okay, awesome. Well, thanks for the call, Nick. I appreciate it. So, yeah, you guys, if you. If you're looking at life insurance again, term life is the way to go. It's so inexpensive. Winston, I just upped ours again. I think it was probably three years ago, and we had someone come to the house because you got to do all your health stuff, you know, to improve all your health and. Yeah, and we get it back. I'm like, oh, my gosh. Cause we even upped the amount. We went ahead and upped the amount of what we were. And it was so inexpensive. Yeah, it's not healthy.

[Jade Warshaw]

Yeah, it's not bad.

[Rachel Cruze]

Yep. So if you're able to do that, you guys, so worth it. And again, Zander, insurance is a great place. It's the place Winston and I use to shop our health insurance because they shop multiple companies. It's not just looking at one company. They're looking all. All over to get you the best rate possible. So. Yep. So, Nick, that's what I would do for your family and anyone else.

[Jade Warshaw]

Listen.

[Caller]

Sam.

[Host/Announcer]

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something.

[Caller]

Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

[Host/Announcer]

That's a gut punch.

[Jade Warshaw]

And.

[Caller]

Oh, you're telling me. And for. For decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them.

[Host/Announcer]

Me, too.

[Caller]

They don't know what to do next.

[Host/Announcer]

Me, too. I mean, you're going to have a crisis here, and, you know, you got two options while you're sitting and Talking to a young widow, she's concerned about how she's going to invest all this money properly and not mess this up or she's concerned how she's going to eat tomorrow.

[Caller]

That's exactly.

[Host/Announcer]

These are the two options. And your dadgum family term life insurance.

[Caller]

Can replace income, pay off debts, cover funeral expenses. So your family can actually have the opportunity to just be sad, to just miss you.

[Host/Announcer]

That's exactly what it's supposed to be. It's saying I love you to your family term life insurance, Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282.

[Rachel Cruze]

It's official. The Ramsey Christmas cash giveaway is here. So each week someone's gonna win $500.

[Jade Warshaw]

That's a lot of money.

[Rachel Cruze]

That's a lot of money. And then the grand prize winner will. Will win $5,000. So you can enter every single day from now.

[Jade Warshaw]

Wow.

[Rachel Cruze]

Until December 20th. And you can enter daily to increase your chances to win. Go to ramseysolutions.comgiveaway now to enter. No purchase necessary to win. So again, $500.

[Jade Warshaw]

Gosh.

[Rachel Cruze]

Every single week until now, making your full time job. Unbelievable. Yes, I know. And then the grand prize of $1,000. All right, let's go to Matthew in Dayton. Hi Matthew, welcome to the show.

[Caller]

Hi. My question is, is it worth taking out a car loan to avoid being in a never ending loop of cheap cars and insurance payouts? And I can give some backstory on this if you'd like.

[Jade Warshaw]

Sure. Yeah.

[Caller]

So I just got married 22 days ago.

[Rachel Cruze]

Congratulations.

[Caller]

Thank you. My wife's first car she had for three years and it got totaled at the end of the summer and got, we got a five thousand dollar payout for it.

[Jade Warshaw]

When you say it got total, did she hit somebody or somebody hit her?

[Caller]

She avoided being in a pileup and by avoiding being in a pile up, she went into a ditch and the ditch broke some broke the frame. So better the car than her for real. So that got totaled and we bought her dad's car for, for the same price of the insurance payout because she was on her parents insurance at the time. So $5,000 for her dad's car. And then this past week, actually last Tuesday, we came home and a tree was on top of her car that she just bought in August from her parents. And now that car is being totaled for around $5,000. Okay, so I guess, okay, so it's.

[Rachel Cruze]

Not crappy cars breaking down. Matthew, you could have wrecked it. She could have gone into a ditch in a nice car. A tree could have fallen on a nice car.

[Jade Warshaw]

Right.

[Caller]

Bad luck.

[Rachel Cruze]

It's not the, it's not car's fault. You're not saying that the transmissions keep breaking and you're paying more than the car's worth and fixing it. So, so no. So your argument. Well, keep going. Do you have a better argument?

[Caller]

I don't think so, because with insurance they're just. These cars are so these cars. The first car was over 10 years old in this car. Now we just got told it was 10 years old. So insurance isn't gonna pay to fix body damage or anything like that.

[Jade Warshaw]

They're gonna give you what it's worth.

[Rachel Cruze]

What it's worth. Yeah.

[Caller]

Right. So I just, if I just buy another car for the same cash value, what it's worth, it's gonna put me another spot of. If that car gets in an accident or something happens, I'm just gonna be in another.

[Jade Warshaw]

Right. But nothing was wrong with the car to be. Nothing was wrong with the car to begin with.

[Rachel Cruze]

You're staying lateral, which is fine.

[Jade Warshaw]

You didn't call in saying, hey, I've had these $5,000 cars and they're just breaking down left and right. You called saying she avoided a pile up, a tree fell, lightning could hit the next car tomorrow and then they'd pay you out another 5,000. The car is still not the issue. I think the issue is you just want a nicer car and you're hoping that this can give you an excuse to get one.

[Caller]

Okay, I haven't thought about it from that perspective.

[Jade Warshaw]

I have. I think that's what you want. I mean, can you tell me other, anything other than kind of like these bad luck situations? I mean like I think the argument.

[Rachel Cruze]

Would be, the argument would be, would be much more convincing. Matthew, even though you couldn't, you can't convince us to take out a car payment because what you're going to spend on a car, the interest and all of it, it's not a good investment. You could call, you could talk to majority of financial experts out there that may not agree with us on credit card points or certain things. Almost everyone agrees that a car payment is the worst type of debt you could probably get into because you're paying interest and you're paying more on something that's going down in value. And so that makes no sense versus a house. Right? You go and you pay interest on a mortgage. Well, at least for the most part, houses are going up in value slowly, fast. I mean, all of it. But over time, a car goes down, like people call this show when they're like, hey, I went and got a car payment for $26,000, and now it's worth 20,000. I mean, almost all the time people are underwater in cars. And so that's because they buy too much car. They buy a car they can't afford, and it goes down in value and they can't take the financial hit. They don't have the money to be able to even, you know, absorb that.

[Jade Warshaw]

That's right. So you'll get this next $5,000 payout, and you'll go get another $5,000 car. Now, if you had some extra cash you wanted to put with that, and you know, you're out of baby step two. I'm not mad at that. What baby step are you on?

[Caller]

I'm not sure exactly. We have about a thousand. I haven't looked at exactly for baby steps. We have about a thousand in emergency fund.

[Jade Warshaw]

Okay, good.

[Caller]

We just. We just were paying off our wedding and our honeymoon. We have about 2,000 left on a credit card.

[Rachel Cruze]

Okay.

[Jade Warshaw]

Okay. How much is the wedding and honeymoon payoff?

[Caller]

We have about 2,000 left, paid. It was probably about $40,000 wedding and about $6,000 honeymoon.

[Jade Warshaw]

Okay, but you only have 2,000 left to go. Yeah. Okay, good. So we would call that baby step two. So in the land of baby steps, there's seven of them. The first one you have, which is to have $1,000 saved just between you and life. And then the second one. Yeah. You pay off the debt smallest to largest. It sounds like you're doing that. And how quickly can you get this $2,000 paid off?

[Caller]

Ideally within the next month.

[Jade Warshaw]

Okay, great.

[Caller]

And then after that, paychecks. And because we're living within our means and good saving money where we can.

[Rachel Cruze]

Any. Any student loans or anything. Matthew, any other debt?

[Caller]

Yeah, she has about 9,000 in student loans that we. That they ran her junk folder and the mailings of missed payments were going to her old house. And that was a whole. Whole thing of. She forgot about the loan and she needed. It was quick and she needed to stay in school.

[Jade Warshaw]

Is there anything else besides the 9,000?

[Caller]

No. Okay, that's it.

[Jade Warshaw]

So everything but the house.

[Rachel Cruze]

How much are you guys making total together? Matthew, you and your wife?

[Caller]

70. 70 take home.

[Rachel Cruze]

Wonderful. Okay.

[Caller]

Combined.

[Rachel Cruze]

Yeah, that's great. How old are you guys?

[Additional Caller/Guest]

She's 23.

[Caller]

I'm 22.

[Rachel Cruze]

Okay.

[Caller]

So she turns 24 here in two months.

[Rachel Cruze]

Okay.

[Caller]

And I'm just kind of calling in as a. As a husband of like, well, we've already had to do car searches the last two months and had to deal with all of that. My main thought was, if I take a $5,000 loan or something like that.

[Jade Warshaw]

It'S not going to change what happened.

[Rachel Cruze]

You're still going to have to do car research. If another tree falls on the car.

[Jade Warshaw]

If you bought a 50,000 dol car in cash today, if a tree falls on it, you're still gonna have to replace it, and they're still gonna give you the value of the car. So I want you to let go of that. I want you to let that out of your kung fu grip. Because for some reason, you think that getting a more expensive car, it's gonna.

[Rachel Cruze]

Change the tree is gonna be like, hold on. Yeah, hold on.

[Jade Warshaw]

We can't fall on a Mercedes.

[Rachel Cruze]

It's a Suburban. I'm gonna fall this way instead.

[Jade Warshaw]

It's like those commercials. Mayhem. Yeah, yeah, Mayhem. Mayhem follows you no matter what. My guy.

[Caller]

I know, I know.

[Rachel Cruze]

Yeah. I mean, you guys, you guys are doing great. I mean, you really are. And I just want you to shift that mindset.

[Jade Warshaw]

If.

[Rachel Cruze]

If you start to entertain debt, then it is the easiest road to go down because there are people and companies that are wide open, willing to accept you and make you feel great and justify any way to get you in because they're going to be making so much money off of you. That is the industry. Okay? That is the industry. And so when you can avoid that, and you guys are so young, and I'm so. I'm like, please, if you can just avoid that, you guys together and make a pact and say, we are not going into debt, so we're pay cash for our cars. If we have to go on an anniversary trip next year, we're going to save up and pay for it. Like, when you can avoid it and you guys are making 70 grand and you get out of debt and all, like, you guys are on the positive end then financially. So don't continue to have these thoughts of debt because it just constantly will financially take you more in the negative and it takes away from your net worth. It takes away peace of mind in all of it. So if you can, and I would implore you to consider just living. Living debt free. And it's not exciting. The ego is not going to love it. We don't love the $5,000 car. It doesn't make you feel great. It doesn't make you feel successful. Yes. But for a season. That's for a season. And then you guys can save up cash, sell the $5,000 car for $5,000, because it's probably what it's still going to be worth.

[Jade Warshaw]

That's right.

[Rachel Cruze]

Put it with another five, and that's a $10,000 car. And then you do it again and again and again until you guys are. Yeah. At cars that you love, but you're paying cash for them.

[Caller]

And.

[Rachel Cruze]

And it's going to be a slower process, but, man, so worth it.

[Caller]

Gotcha. I needed to hear this because I grew up in a family where you didn't buy cars. We always bought cars for cash. And that's the same way with her. And we were just kind of in a pickle of like, do we just keep doing this?

[Rachel Cruze]

Yes. Yes, you do. Yes.

[Caller]

I needed to hear that for sure.

[Rachel Cruze]

Yeah. Your parents have set up some great examples. Both of you come from a very similar background and so stick with it. That's why we always say, you know, normal is broken. Common sense is weird when we open the show, because that's what's happening. So live within your means, Matthew. If you don't have the money, don't buy it. Don't be under that impression that if I can afford the payment, I can afford it. No, you have to be able to pay for things in cash.

[Host/Announcer]

Finally, mortgage rates have dropped, and you know what that means. People who've been sitting on the sidelines are about to jump back in to the housing market. So if you've been waiting to buy, this could be your window. But you've got to be prepared and do it the Ramsey way. You need to contact Churchill Mortgage. Their home buyer edge program gives you peace of mind. In a wild market, you can cap your rate for 90 days. So if rates go go up, you're protected. If rates go down, Churchill will drop yours automatically. And get this, Churchill will even back your offer with a $10,000 seller guarantee. So if your loan falls through due to financing, the seller still gets paid. That's how confident Churchill is. Plus, when you shop as a Churchill certified home buyer, it's stronger than pre approval. It makes you look like a cash buyer, which makes your offer rise to the top. So don't let this moment pass you by. Get ready now. Go to chur ChurchillMortgage.com to get started today. That's ChurchillMortgage.com this is a paid advertisement.

[Jade Warshaw]

Owned by our edge and seller guarantee are available for qualifying borrowers and select.

[Rachel Cruze]

Loan types only and not available in.

[Caller]

All states or locations. NMLS ID 1591 NMLS consumeraccess.org Eagle Housing.

[Jade Warshaw]

Lender.

[Rachel Cruze]

In Atlanta, Georgia. We have Joel coming up next. Hi, Joel.

[Caller]

Hey there. Thank you for having me.

[Rachel Cruze]

Yeah, absolutely. How can we help today?

[Caller]

Hey. So me and my wife have a new six month old daughter and Congratulations. Thank you so much. We're about $287,000 in student loan debt and I'm trying to figure out the best way to tackle this. So we have an emergency fund, but we recently had a car repair and that shipped that out pretty quick. And so I guess I'm asking, are there times in which the emergency fund should be bigger before you start hammering those student loans? And then I guess the secondary question is I'm looking at the, you know, income based repayments compared to these large amounts that we're paying on student loans each month. I just kind of need a little bit of guidance here. Yeah, we're trying to decide what did.

[Rachel Cruze]

You get, what did you all get your degrees in?

[Caller]

My wife is a nurse practitioner, pediatrics and she went to Emory. So, you know, and I'm a film and video editor. And my student loans are only about 30,000. Hers are about 250.

[Rachel Cruze]

How much is she making a year right now?

[Caller]

Since she just graduated in December, she's making about 70 and I am also making about 70. We're making about the same amount right now.

[Jade Warshaw]

Okay.

[Rachel Cruze]

And she just had a baby and she has.

[Caller]

Yeah, yeah, yeah.

[Rachel Cruze]

She's, she, is she going to be going back to work making more than 70? Like is that her plan?

[Caller]

Yes. So she has started back to work already and that's kind of where she is at now. Hopefully over the next few years, obviously that increases as she can take on more patients, but that's kind of. We're trying to operate with what we have now and trying to look forward to the future. You know, how do we, how do we prepare for possible other cars and all that sort of thing.

[Jade Warshaw]

You're not doing any kind of investing right now, are you?

[Caller]

I do have a 401k at work that I've been, that I stopped contributing to last year while we were moving, having the baby and all the things early this year. And then I started again.

[Jade Warshaw]

Okay, but so I think you need to pause that because right now if, if what you say is true and you're interested and serious about paying off this debt, then that means you need Every piece of money that you can get your hands on. And that includes right now, just for the time being, pausing that investing. And trust me, you'll get to it later. I'm like you, my husband and I had $280,000 in student loans and we paused investing and it was just a short period of time, but it really does give you the ammunition you need to knock out the debt a lot faster. How much? When you guys get your, you know, your check, that net amount, how much is it every month?

[Caller]

We bring in about 8,000 total, like among both of us each month. And most of that goes out with bills, daycare, you know, she, we're both working.

[Jade Warshaw]

Right, Right.

[Caller]

And then also the student loan debt or the student loan payments on hers were about 3,000amonth. And I was like, you know, for the ten year plan. So I took it back down to the 25 year plan. That gives us a little bit more breathing room.

[Jade Warshaw]

Fine.

[Caller]

But once again, not enough to save for a car and all the things.

[Jade Warshaw]

So I'm not mad at, I'm not mad at you taking advantage of taking it down to the 25 year plan to lower the payments on all of them, but only with this caveat. If you take all of the extra money that it saves you and put it on the smallest debt. So do you have any debt besides the student loans?

[Caller]

No, that's our only debt.

[Jade Warshaw]

And the student loans, I'm guessing, are broken up into smaller student loans. It's not just one big one.

[Caller]

Right, Exactly.

[Jade Warshaw]

So if you make it, if you do the plan, that's the 25 year plan. And let's say it drops it down to. What's the payment now? From 3000 down to 1900. Okay, 1900. Now you can take that extra 1100 dollars and you can throw it at the smallest student loan at the principal. Do you see what I'm saying? So it's giving you more firepower to knock that small one out first so it's not getting eaten away with interest. Does that make sense?

[Caller]

Yes, absolutely. But should we take a few months first to save up a little bit bigger emergency?

[Jade Warshaw]

How much do you have in your emergency fund now? How much is in there now?

[Caller]

Well, it was, it was at 1100 this morning, but I had to get a repair on one of our cars and now it's at like 400.

[Jade Warshaw]

Okay, so stack it back up to a thousand. We found over the course of 25 years, 30 years doing this plan, that $1,000 is the sweet spot. It's just enough that if something breaks down with the car, Right, Rachel, you can pop in there and get it fixed. But it's also. It's not so much that it's taking away from the momentum of you paying off the debt. It might feel like not a lot, but, you know, your wife's already had the baby, the baby's healthy, you guys are home, child care is paid for it. Like, you can take that. That moment and exhale and say, okay, like, the. The risk or the danger is over. Thousand dollars is good. And then, yeah, if you clip 1900. If you clip that other $1100 at that student loan, you're going to pay it off a lot sooner and think about how much more you can add to it. So this is probably you doing some overtime. Probably now's not the time for your wife to do overtime with a baby, but getting that number up as high as you can, because ultimately you guys are going to be the ones that say, okay, if we do it at a rate of eleven hundred dollars a month extra, here's how long it's going to take. We're not satisfied with that, so let's see if we can get it up to 2200amonth extra, are we satisfied with that? Do you see what I'm saying? And reverse engineer that number to get it where you want it to be.

[Rachel Cruze]

Yeah. And, Joel, I mean, this is. It's a lot. I mean, $300,000 of debt, like, this is gonna be a long game for you guys, right? I mean, this is a. This is a long journey. So your wife, you know, she's in a career where the upward trajectory is massive. Like, I feel like I'm, like, in that medical field. I would be depending on her in a sense of, like. Because, I mean, you can do extra work 100%. And I would. I would be taking on extra, but.

[Caller]

And I am. I do freelance. That brings like 600amonth.

[Rachel Cruze]

You can do a lot. That's awesome. Yes. So for her long term, and when I say long term, saying five to eight years, I'm going to be making as much as I can. I mean, because to your point, I mean, she went $250,000 in debt for this degree. And so. And so the upward trajectory of her having a bigger shovel over time is probably going to be more, um. And that's what's. I mean, I. And I'll just be frank with you too, Joel. I'm like. I mean, Jade and I are both moms, so I'm like, that feeling, especially your first Is it your first?

[Caller]

Yes.

[Rachel Cruze]

Yes. I mean, it's just, I mean, I think I cried every day going in for a little bit.

[Caller]

Like, I know I cried more in the past six months.

[Rachel Cruze]

It's very.

[Caller]

The rest of my life combined.

[Rachel Cruze]

It's so emotional and it's so exhausting. And this is not to like pick on you guys, but it's just another example, a real life example, literally of you, Joel, in Atlanta with your wife. And what debt is freaking doing where if, you know, in a perfect world, if there was no student loans and we had an 18 year old girl call in because she wanted to go to a private school in Minneapolis that was Gonna cost like $250,000 to get an undergrad degree and we were like, don't do it, don't do it because you want options, right? And if your wife wants to stay home, it's like, it sucks. Now could you guys choose that? Absolutely. And then it'll take you maybe a lot longer, a lot longer to get out of debt. But what sucks is that like the debts that she, that you know, that the student loans are in, was in a field and at a school that was very expensive. And again, hopefully she has the opportunity to be making more. I mean that, that's the goal, right? If you're going to be going that much more into debt that you're, you're going to be able to sufficient, you know, that's going to be sufficient with the income you're making.

[Caller]

Right, Exactly.

[Rachel Cruze]

But it just sucks, you know what I mean? Because there's not, it limits options on what you guys want to do in life. So again, that's not to pick on you. It's just, just another example of what debt does. It takes your freedom and it takes your options and it sucks.

[Caller]

So, so would you. So even with a baby, 1,000, you would say, is a good round number. I think it's just as a father, you know, it's like I'm, I'm a little terrified.

[Jade Warshaw]

Well, you got to think about it like this.

[Caller]

And we're not gonna have.

[Jade Warshaw]

What you're saying makes sense. I like, logically, I hear what you're saying, but think about it like this. Let's pretend, let's imagine the, the worst thing that could take place, which would be like the worst emergency, I don't know, something with your roof maybe.

[Caller]

Right, right.

[Jade Warshaw]

And let's pretend that cost $3,000 to fix. Well, you've got your emergency fund, but then you've got your actual income. And remember, you're putting an extra, you're paying extra on your debt every month. So if you said if I have my emergency fund and I stopped the extra that I'm paying on my debt for that month just to cover whatever crazy thing could possibly happen, and if I pulled back, you know, the purse strings a little bit more and tightened up a little more, I could probably find another 5, $600. So you see that there's actually money there. You're just not, you're taking it out of the mix in order to pay debt, but it's there if you were to need it.

[Caller]

Yeah, really good point.

[Jade Warshaw]

See what I'm saying?

[Caller]

Thank you for that. So you're saying stay far away from the IDR and the IDR though, right?

[Jade Warshaw]

The idr. Like I said, the IDR doesn't bother me. Especially if you were moving it from the 10 year plan to the 25. That doesn't bother me. But only with the caveat that you're gonna use the extra money to pay off the debt. If you use that money to go out to eat and just inflate your lifestyle, then you are only playing yourself. And I can't stress that enough.

[Rachel Cruze]

No, it's a point. Yeah. And I think, you know, with a lot of things too, whether it was medical bills or that kind of thing, you usually have a month or two to be able to. You know what I mean? To. Sometimes it's not like an immediate today. Yes. This moment we have to. Sometimes you have a little bit of time to your point that you can get that cash back. But I get it, Joel. I know that like mama bear mentality of like, I just want to be smart, keep everyone safe and all the things is so good, so true for that thousand dollars, that emergency fund stays true no matter what. Hey guys. It's open enrollment time for health insurance. And if you have ever felt overwhelmed trying to figure out your health care costs, you are not alone. For a lot of families, healthcare is one of the biggest line items in the budget. And it gets more confusing every year. But you don't have to settle. Christian Healthcare Ministries is a biblical and budget friendly alternative to health insurance and I am proud to recommend them. With chm, you are joining a community of believers who actually help share each other's medical bills. Yeah, it's true. Members have shared over $12 billion in health care costs since CHM started nearly 45 years ago. And it's simple. You choose your provider with no network limits. You submit your eligible bills online and other members help share your Expenses. CHM has program options for every stage of life, whether you're single, self employed, or raising a family. Y', all. Open enrollment has a lot of people scrambling right now, but CHM lets you join anytime, so go to chministries.orgbudget to check them out. That's chministries.orgbudget. next up, we have Michael in Boston. Hi, Michael. Welcome to the show.

[Caller]

Hi, how are you today?

[Rachel Cruze]

We're doing great. How can we help?

[Caller]

Doing well. So I have a question for you. I was just informed a few weeks ago that I'll be getting laid off at the end of the year. Yeah, it's all good. My wife and I have. Have about a hundred thousand dollars in cash right now. And just trying to figure out what I should do with that in these uncertain times.

[Rachel Cruze]

Okay. What do you do, Michael?

[Caller]

I work for a large corporation.

[Jade Warshaw]

Okay.

[Rachel Cruze]

Okay.

[Caller]

In product management.

[Jade Warshaw]

What were you making?

[Caller]

I was making 160,000 plus a 20% bonus.

[Jade Warshaw]

Okay. And does your wife work at all?

[Caller]

She does, yes.

[Jade Warshaw]

And what does she make?

[Caller]

110. She makes $110,000 a year.

[Rachel Cruze]

Okay. And how quickly do you think you can find a new job? Is this something you can start looking for, like this week?

[Caller]

Yeah. I mean, a job and a good job are different things, you know. You know, I did get a decent severance package that can really carry. Hold me over almost for a whole year.

[Rachel Cruze]

How much was that?

[Caller]

So. So I have my full salary through the end of October of next year.

[Rachel Cruze]

Oh, good. And that's not including the one. The hundred thousand dollars you guys have saved.

[Additional Caller/Guest]

Correct.

[Jade Warshaw]

Okay, that's really good.

[Rachel Cruze]

That is nice.

[Jade Warshaw]

You're in a. I mean, I want to encourage you that you're in a really good position with the severance and with the cash. Sit. The fact that your wife also works. I want to caution you, though, because I don't want that to be a reason to not be motivated to really go out there and get a job that was just as good as the other. Replace this income and possibly make more money. I mean, what's to stop you from making more going into the next season with all of the, you know, experience that you have in that field.

[Caller]

Right, right. Yeah, absolutely. And that's. That's. That's one of the goals for sure. Opportunities available.

[Jade Warshaw]

So if I were you, I would be looking tonight at budget. Do you guys have a budget?

[Caller]

We have a loose budget, definitely.

[Jade Warshaw]

Okay.

[Caller]

You know, inclusive of the mortgage, one small car loan, and just other monthly bills.

[Jade Warshaw]

So what I would do, we'll give you every dollar before you get off the phone tonight. But I want you and your wife to sit down tonight and really plug in all of the numbers. Because if you can, my goal would be to touch as little of your saved money as possible. Do you guys have like kids at home or what's. Who all is at home?

[Caller]

We, we do. We have three kids, 14, 11 and 6 years old.

[Jade Warshaw]

Okay. So I would, the, I would want the goal to be we're going to touch as little as of this hundred thousand as possible. So in order to figure out what that is, you've got to set a budget for 110 and see, okay. Monthly. If we set our budget for whatever wife brings home.

[Rachel Cruze]

And he'll be getting his severance and.

[Jade Warshaw]

You'Ll be getting your severance too, so. Oh, that's true. So not much, not much should change. Yeah.

[Rachel Cruze]

I would be paying your debt. How much, how much you guys have left on your car?

[Caller]

We have, it's a 20, 25 and we have a little less than $10,000 left on that.

[Rachel Cruze]

Okay, well I would pay that off tonight.

[Jade Warshaw]

That's true. Yep.

[Rachel Cruze]

What other debt do you guys have?

[Caller]

That's a 4. 4. That's a 4% interest rate.

[Rachel Cruze]

I don't care.

[Caller]

The only other, okay. The only other debt that we have is our, is our mortgage.

[Rachel Cruze]

Perfect. Okay, so.

[Jade Warshaw]

All right, great.

[Rachel Cruze]

Yeah. So what? So the baby steps, Michael, is the seven steps that we walk people through. So technically I think you guys are on baby step four. Because you guys will be debt free by tonight. Correct. Because you're gonna just pay off that car and then that'll be a $90,000 sitting in savings. And I would figure out your monthly expenses. What you guys, you know what you have. And I would go ahead and get a six month emergency fund. Just cause you got three kids. The job thing is kind of in the air. Six months is plenty because you're still getting paid. I mean you're still going to get a salary. So I take that, whatever that six months is for you. I'm making this up. So just say it's like, I don't know, 10,000. So say it's 60,000, you'll have 30,000 left. And then with that 30,000, I mean, honestly I don't think I would be motivated to feel like I have to keep any more because of a job loss. Because you're, you're separate, you're getting paid the same. So it's almost like you haven't lost a job. Job technically. Right. Because you're still getting a paycheck, so you guys are still living your life. Is the severance at all tied to if you get new employment anywhere? Like, will that stop at all? Or do you get that plus if you get a new job?

[Caller]

I would get that plus if I.

[Additional Caller/Guest]

Get a new job.

[Caller]

As long as it's not with the same company, obviously.

[Jade Warshaw]

Okay, that's great.

[Rachel Cruze]

Which is awesome. Yeah. And then I would be funding 15 of your income into retirement, and I would count the severance as income. You know, I mean, I would still say so. I honestly would just. I would keep going, and then I would put extra on the house. I mean, I would just go through the baby steps. I don't think I would be that alarmed when I. When I first heard you were being laid off. Honestly, in my head, I'm like, oh, my gosh, if you have no savings, you're down to one income, then there's a lot of shifting that has to take place. That's usually people's situation. But you're getting a nice severance. You guys are going to be debt free. You have a fully funded emergency fund, so not much really has to change. Michael, you. I don't feel that urgency, do you, Jade?

[Jade Warshaw]

No, I mean, the only thing I'm thinking is you've got to find another job that's going to replace your income and you've got to be on it. That's it. You know.

[Caller]

Got it. So would you. Would you guys take that other 30,000 and put it.

[Rachel Cruze]

I would probably put it at the.

[Caller]

Brokerage account, like into an S&P 500 fund or something along those lines. Or should I just keep the cash? You know, that's where my big decision is.

[Rachel Cruze]

Okay, so I. I almost would do option C, Michael, because If you're funding 15% of your income into retire, the next step beyond any other investing is to pay off the house. So I almost would be tempted. How much do you guys have left on your mortgage?

[Caller]

260,000.

[Jade Warshaw]

Okay.

[Caller]

Yeah, I mean, it's a 2.85 rate.

[Rachel Cruze]

Okay. Yes. Again, the interest rates don't really apply to what we talk. When we talk about math. It is so behavior change. Finding peace. Dr. John Deloney, one of our other hosts, he always says, we're solving for peace. And we find when people are completely debt free, that is one of the most peaceful places you can be financially versus high stress, high financial stress with trying to pay bills and keep up with everything. So you can do what you want with that 30,000, Michael. That's left if you want to open up a brokerage account or something. Yes. That is not gonna, that's not gonna hurt. But the next step technically would be to throw anything extra at the house, but because there is this, you know, again, kind of weird thing with the layoff. If you want to feel extra safe, you can, but I don't feel like you have to have extra padding. You remember when you have a six month emergency fund and you're still getting paid?

[Jade Warshaw]

Yeah. You're still getting paid. Yeah. There's part of me that might wait until this. It's a storm. It's not the stormiest of storms because of the money.

[Rachel Cruze]

Get a job.

[Jade Warshaw]

Yeah, there's part of me that might wait until you land that next job. And then if you do, I mean, what a blessing because you'd be getting the severance plus to pay from your new job. Then you'd have something to do with this 30,000. Like you could really do some major damage on your mortgage at that point as far as paying it. Um, whether or not you wait until you secure the next job is really up to you and how you and your wife feel about it, security wise.

[Caller]

Awesome. All right, well, you know, appreciate. I appreciate the advice and you know, hopefully. Good, good luck moving forward.

[Rachel Cruze]

Absolutely. Michael. Well, I'm sorry about the job loss, but I'm, I'm thankful you guys are in the position you are. You guys have done a great job saving and. Yeah. And again, that severance is.

[Jade Warshaw]

That's everything. That's so helpful, Rachel. Let's just take a moment and talk about it. Cause I could tell you were getting frustrated. Not frustrated, but like the interest rate. The interest. Right. And, and let's talk about that. Because people get so hung up on, I've got this debt, but the interest rate is good. So therefore, somewhere in their mind, they think they can just string it along. Because is that 2.2%?

[Rachel Cruze]

You know, that is not a big deal.

[Jade Warshaw]

Yeah, it is a big deal. Debt is risk, no matter how you slice it. If you are tied to debt, that means you have risk associated with your life. And even if the interest rate is lower, it's actually in many ways more dangerous because you're more likely to leave it around and keep it in your life for longer. So just, just remember, guys, yes, that is debt.

[Rachel Cruze]

And that is the hard thing, because I think, you know, even the question with paying off the house, you know, people, right, you know, they have $60,000 left in the mortgage and they have 70,000 in non retirement Investments. And they're like, wait, you want me to just pay off my house? But I'm making up to like 20% this last year, you know, and my mortgage is the old interest rate of 3%. Like, I could be making a 17% spread. And so the calculations come into place, and again, we're not dumb. We get that. Totally get that. That makes sense mathematically. But what is never calculated again is the emotions around money, which is what Jade's. Yeah, the emotions around money, the stress around money, the peace that you have around it. And so we can play the math game all day long, but that's even one reason we talk about you pay off the smallest debt first, not the highest interest rate. It's not a math problem. Majority of personal finance is your behavior. It's not the head knowledge. It's not the Excel sheets. It's not trying to form the interest rate. That's what's best for you. And it's not that bad. Debt is debt. So to your point, the borrower is slaves to the lender. That's what it says in Proverbs. So there's something freeing about being debt free, you guys. So, yeah, again, Michael, he has a great head start. Yeah, I'm excited for him. I think it's a new change. Good season and they were wise. So it's not a crisis. This is just an inconvenience.

[Caller]

Happiness.

[Host/Announcer]

If you've listened to me for more than five minutes, you know that being normal with your money is not a good thing. Because normal is broke. And I want you to be weary. That's why I love what we're doing with Fairwinds Credit Union. Our friends at Fairwinds just launched a brand new Ramsey debit card. And it says, debt is normal. Be weird right on the front. I love that because every time you swipe it, you're choosing to live differently with no credit card payments and no debt. You see, Fairwinds has been helping people like you ditch debt faster and build wealth for years. They're not trying to shove credit cards or auto loans in your face like the big banks do. And they've worked with us to create the smart bundle for Ramsey fans. It includes a no fee checking account, a high yield savings account to supercharge your emergency fund, and now the Ramsey debit card to help you stay focused on the baby steps. We're excited for you to try it. So check them out [e-mail] Ramsey that's fairwinds.org Ramsey insured by the NCUA.

[Rachel Cruze]

Normal is brilliant and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fair Winds Credit Union studio, this is the Ramsey show and I'm Rachel Cruze hosting today with Jade Warshaw. And we're taking your calls at 888-825-5225. Up first we have Jeff in Minneapolis. Hi, Jeff, welcome to the show.

[Caller]

Hey, good afternoon.

[Rachel Cruze]

Thanks for calling in. How can we help?

[Caller]

Yeah, so my family and I were in the process of getting ready to purchase a home for ourselves. This will be the third home that we've owned. We sold our previous house back in June when we relocated for a job change. And I'm feeling that we're sitting pretty good financially with what we have invested and in retirement and trying to identify the right level of home that our budget can support while still letting ourselves be comfortable financially but also feeling that going into our third home that we maybe don't need to settle on every single item at this point of our life as well.

[Jade Warshaw]

Good. So what are you thinking about spending?

[Caller]

Well, right now we're considering a property that would be around the 550 to 600 range.

[Jade Warshaw]

Okay.

[Caller]

And I didn't ever think I would end up in a home of that size, but with real estate being, you know, somewhat inflated right now, that's kind of what we're looking at needing to be ended. Check all the boxes that we're looking for housewives.

[Jade Warshaw]

And you feel good that if you put whatever down payment you're going to put, it's not going to be any more than 25% of your take home when you include taxes, insurance, HOA, all that stuff.

[Caller]

Yeah. Depending on what we put down for a down payment, we'd be tracking right about the, right about the 25% mark.

[Jade Warshaw]

What do you have saved in cash?

[Caller]

So we've got a, we're sitting on 310 in cash right now. And that includes, that includes a bunch of money from the sale of our home in the summer. About 50 of that is what I've considered to be our emergency fund. You know, the rest of that would go into the home purchase. So about, about 250.

[Rachel Cruze]

Okay, good for you, Jeff. Well done.

[Jade Warshaw]

Is there anything standing in the way? Do you have any other debt or.

[Caller]

Well, we're sitting pretty good otherwise. We've got a small car loan, $5,000 on that. That's the only other debt that we have. We're free of credit card debts, free of education debt.

[Jade Warshaw]

Good. Yeah.

[Caller]

None of that. We're, we've got a young family at home.

[Rachel Cruze]

What's the problem?

[Caller]

Young family at home. So we're trying to, you know, provide some flexibility to, you know, have life change if needed there, whether it's education or so.

[Jade Warshaw]

What do you need? What do you need from us? What made you call in? What's your biggest question?

[Caller]

Well, as we've been looking at this home purchase, it just, you know, what we think about is, is that really the best way to deploy that money? Should that money go into a home purchase or should it be, you know, further invested or set aside for a child's education? Is it the right move to put that much money into a home right now?

[Jade Warshaw]

Well, you said yourself, you said you're sitting pretty with your investments. You said you're, you know, everything seems to be on track. So if you did. But let's, let's just play it out. If you did purchase this house like you're saying, it would meet the criteria that we say is kind of a safe place to buy a house and still have enough margin to do the things that you've mention, which is save up for kids, college, be able to put a little bit extra on the house. You'd still have that money in order to do that. Whereas if you didn't purchase this house, let's pretend you didn't purchase this house. Let's pretend that you, what would you do? Take this money and invest it? Would you drop it in the stock market?

[Caller]

Drop some in the market, beef up a 529.

[Jade Warshaw]

Okay. And then how long would you rent?

[Caller]

Well, we, yeah, we, we need to get into a long term home as soon as we can, just for everybody's comfort.

[Rachel Cruze]

But you're saying just maybe a smaller home, something not.

[Caller]

Yeah, maybe, Maybe it's a 400, $400,000 home. And our monthly, you know, our monthly payment is closer to 1200 instead of, instead of 2400.

[Jade Warshaw]

Would it suit your needs if you did that or would you feel like you were sacrificing?

[Caller]

I would feel like we were sacrificing, yeah.

[Rachel Cruze]

And how old are the kids?

[Caller]

Two and a half right now.

[Rachel Cruze]

Okay. And how much do you guys make a year?

[Caller]

1. I'm at 93 and my spouse is at my wife's at 57.

[Rachel Cruze]

Okay. I mean, did you, did you both, how did you guys grow up with money? Jeff, did you. Because you said we. I wouldn't imagine ever buying a home.

[Caller]

Yeah, so my wife, yeah, my wife grew up from pretty, you know, pretty limited Means, you know, larger, larger family. And they, they, they made it work. But, you know, she definitely comes from a, you know, a different background than I do. When I was growing up, we as a family didn't ever have to worry about money. My parents always made smart decisions with it.

[Rachel Cruze]

Who's more hesitant about the house purchase, you or her?

[Caller]

Right. A frugal approach to life. I would say she's a little more.

[Rachel Cruze]

Hesitant than I am, which makes total sense. And you know, sometimes money's weird because you guys have been really successful, Jeff. I mean, you guys make six figures. I'm going to say you have no debt. Cause I think you're going to pay that car off tonight is what I want you to do with some of this money. You know, you're debt free. You have a fully funded emergency fund. You have a massive down payment. You have little kids. You've already started 529s for that. I mean, like, you guys in all terms are very successful. And I think sometimes if we come from a family where there was a little bit more scarcity, you had to watch things, more caution around it. It's almost like her emotions haven't caught up with the reality of what she's living. And I think that's really normal. I think a lot of people, and we get calls sometimes people, and they're like, oh my gosh, I, we can spend this on vacation. But is that crazy? Like they can't emotional digest, like where they really are at, you know, realistically. And so, so I could. I totally see where she's coming from. And I get that. But also, our emotions can't be our driver of decisions always because they sometimes don't make sense. Like they're not logical always, you know, and when you look at the numbers, yeah, you guys are not out of control at all.

[Jade Warshaw]

That's a good time. When the numbers do help you like looking at the numbers. I mean, the same thing happened to us the other night. Jeff, my husband, had said there was a line item on our budget. He was like, man, I just think that's too expensive. And I had to look at him and say, in relative to what? Like, relative to what? Because sometimes you can have a certain number in your mind about a certain thing that, like you said, I didn't think we'd ever have a house that was five, you know, five or six hundred thousand dollars. But that might have been relative to the, the old situation. But relative to where you are now, like Rachel said, it's totally within means and sometimes Running out those numbers and running out the actual percentage of your income is so helpful because it helps you, it helps your emotions align with where you are now and go, oh my gosh, this is, this is so true. And then just take some time and marinate in that, high five each other and be like, man, we really, we really did it. Good for us. We can afford things that we once thought were out of reach. And I think it's so important to mark those times, both mentally and emotionally, because they are wins. And it's so easy to go through life and not celebrate your wins.

[Rachel Cruze]

That's so good. So good.

[Caller]

That's good. That's good advice. Yeah, I appreciate that.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

Do you guys, do you all have a specific house that you, that you guys have looked at and you're thinking about putting, putting a down payment on? Like, is there a specific one that she can, like, picture and see or is it just. That's the price range and you guys are going to start looking?

[Caller]

No, yeah, we've been, we've been in the market for a while. We've had several offers that have not gone through on different properties, which has kind of caused us to escalate what we're looking to spend. You know, at one point, we weren't going to go above 450 an hour knocking on the door, 550 for a specific property. So that's what gives us some apprehension as well. We've shifted away, shifted away from our original conservative plan. And we've always been conservative in all other financial decisions.

[Rachel Cruze]

Totally. I hear you. I hear you.

[Jade Warshaw]

Yeah, that's when those guardrails really help, though. What we said before the 25 rule, that's when that's kind of like your true north of. We may have started out one way, but this is truly the, the line in the sand. We know no matter what we choose, we're not crossing that. And I think for you guys, like you said, if you do the plan the way you said, you're not going to, you're not going to cross that line. And I think that's, that's good for you to remember.

[Caller]

This show is sponsored by Better Help. I have awesome friends, I got a great faith, and I have an amazing wife and family. Family. I've also got two PhDs worth of information about how to be well. And yet the times that I've spent with great therapists over the years have made all the difference for me. The right therapist can change everything about your mental, emotional and relational health. And this month, my Friends at Better Help are shining the spotlight on the therapists, the people who truly make the world a better place. With over 30,000 therapists, BetterHelp is the largest online therapy provider in the World World and BetterHelp Works. They have an average rating of 4.9 out of 5 they work. Plus, BetterHelp is totally online, so it's easy to fit into your schedule. To get started, just answer a few simple questions and BetterHelp will connect you with a licensed therapist. And if it's not the right fit, you can switch at any time for no extra cost. This month, we celebrate the therapists who've helped millions of people take the next right step. If you're ready to find the right therapist for you, BetterHelp can help you start that journey. Visit betterhelp.com Ramsey to get 10% off your first month. That's BetterHelp H lp.com Ramsey.

[Rachel Cruze]

Our question of the day is brought to you by Y Refi. If you didn't take out private student loans, hoping you didn't take private student loans out, hoping to default. But life happens. And why Refi will not shame you. They'll help you explore a real plan to get you back on track. Head to why refi.com to find out more. That's the letter Y. R-E-F-Y.com Ramsey not available in all states.

[Jade Warshaw]

Okay, today's question comes from Jamie in Iowa. They say I'm struggling to pay off debt, not because I can't afford to, but because it's hard for me to let go of the cash that's in the bank. I have close to 80,000 in car loans and a $450,000 mortgage. I have liquid cash of 300,000 and a brokerage account with a hundred thousand in it.

[Caller]

It.

[Jade Warshaw]

I know it makes no sense to keep the debt, but I have a hard time not seeing all of the cash available. How do I overcome this mentally? Oh, man. So this is crazy because, yeah, if you were to clear out the 300,000 of liquid cash or at least, you know, take it down to three to six months and then take the hundred thousand out of the brokerage, you could almost pay off everything, including the mortgage. Almost. You'd get pretty close. But for sure you'd clear the 80,000 in car loans and. And get rid of most of the mortgage. I have a sense, Jamie, that this is some sort of, like, fear of the unknown, I think, you know, whenever people cling on to savings, it's usually either one of two things. It's kind of like that scarcity mentality that we talked about earlier, which is maybe the way you came up, something caused you to be like, when I have money, I have to keep it. Whether you grew up super duper poor or you were in some sort of a relationship where you couldn't get what you needed, or you had a scary time where you lost a job and, and your family suffered and you had to go on food stamps, whatever that was, something affected you to the point that, yeah, you feel like you have to cling to money. Or maybe it was none of that. Maybe you just feel like you're doing super duper well and you just love the feeling of looking over in that account and seeing that money and just the idea of what it would feel like when it's gone. You don't know. Cause you've never done it. And I think that that's. So, Rachel, we talked about this earlier today. So much of what we teach is a big question mark to people, because people are calling us. Most people have been in debt their entire life. Most people have never felt what it feels like to have paid off mortgage. Most people have never felt what it feels like to have, you know, in her case, $300,000 in savings. And so, so much of this is a question mark that when we ask people to shift into the unknown, they're like clutching their pearls like, well, what's it gonna feel like? What's gonna happen? What if, what if, what if, what if? And all these what ifs come and I get it. It can be overwhelming. But in this case, you almost have to ask yourself, well, what if I don't do this? What. What's the repercussion on the other end? Let's talk about that. Because if you keep this $80,000 in car loans around, all you're going to end up doing is, you know, draining, milking yourself with interest. That's ridiculous. Why do that? Same thing with the mortgage. I mean, an amortization schedule is there for a reason. It's explaining how much the interest is costing you year over year and how much is going to the principal. So you can see on paper that the longer you keep that debt around, the more you're paying an interest. So you kind of have to ask yourself at what cost and what would it feel like to be free? Yeah.

[Rachel Cruze]

And it is so interesting that people, we always talk about change is so hard. And even if you're doing something that you know is kind of stupid, like what she's even saying she's even saying she's like, but it, but it feels comfortable because I know even though what I'm doing is wrong, at least I know how it feels and I can at least stay in there. So there is a lot level of change in life that's hard and that's. If you're changing something relationally, if you're changing your, you know, physically or your health, like, it, it causes something to be stretched within you. But if you're changing to something that is good. And what we have found time and time again is that people that are debt free, they are free. They are free. That's it. And if you want to get back into debt, you can always get back into debt. Like there's a whole industry waiting for you.

[Jade Warshaw]

Like, right.

[Rachel Cruze]

If you hate it, you can get right back in and, you know, take a personal loan and put money back. Whatever you want to figure out, you.

[Jade Warshaw]

Can put it back if you want to.

[Rachel Cruze]

Yes. But there's something about owning your life and when you pay things off and you build back up that savings, it's all yours. That car is yours. You know, that savings that you build back up is yours. And so it is, it's kind of a different approach. And you've even said, Jade before, how it is a, it's kind of a myth that you're safer with the cash because, because you have, you have risk like the cash. Like if something were to happen and you have to drain your cash for some reason, you still have a payment.

[Jade Warshaw]

Like, you still have payments. And the. Let's just. If you want to take it completely mathematically, the feeling of, if you tell me, hey, I have 300,000 in a brokerage and a hundred thousand, or no, I'm sorry, 300,000 in cash and 100,000 in a brokerage, you're thinking, you think you own $400,000, but that is not true. True. If you own 450. If you owe 450 on a mortgage, you. Oh, you owe 50,000.

[Rachel Cruze]

Yes.

[Jade Warshaw]

Nothing is yours. That equation does not add up. And then there's the other 80,000 in car loans. So technically, you are in the red.

[Rachel Cruze]

It's a negative network.

[Jade Warshaw]

It's a negative net worth. So you're lying. You're, you're. All of this is based on a lie that you're telling yourself. This money's mine, this money's mine, and it's really, really not. And so there's. If you approach it from the math, the math is laughing at you. And if you approach it from it, from the emotions. The emotions are going well. There's more peace over here if you go ahead and pay this off. So it's kind of like what Dr. John Deloney says. You have to choose reality. Yeah. And what is the reality telling you? And that's what I would tell you to do, Jamie, is take Rachel's advice, Pay it off. And if you feel terrible, which no one's ever called in here and said, I paid off all my debt and I feel horrible, help me get it back. But you could if you wanted to.

[Rachel Cruze]

You could if you want to. Yep. Hope that helps. All right, let's go to Dallas and we have Chad on the line. Hi Chad.

[Caller]

Hey, how you doing?

[Rachel Cruze]

We're doing great. How can we help?

[Caller]

So I've been listening for a while and pretty much everybody I hear you talk about the baby steps with is on a structured income. My question is my income fluctuates monthly and yearly. Is there a custom plan made for somebody in my situation or, or do we just try to make the baby steps work for.

[Jade Warshaw]

Me, everybody?

[Rachel Cruze]

Well, there's a lot of irregular income earners that call in.

[Jade Warshaw]

I was one, Chad, if that makes you feel better.

[Rachel Cruze]

Yeah, I technically am. I mean, yeah, we get, I mean, great numbers.

[Caller]

I haven't heard one and all the.

[Rachel Cruze]

Okay, yes, yes. It's very common. There's a lot of people that are irregular whether they're doing freelance work or commission based positions where they make a lot one season or like photographers, they make a ton one season and then it kind of goes dead. So you know that that is a very, very normal approach to money or people have that situation all the time. So no, there's not a, a special way to do the baby steps. But if your job is it seasonally Very different, Chad. Okay, well tell me, tell me about that. What's the, what's the seasons.

[Caller]

So mother nature controls my, my work basically. I, my, I fix hail damaged cars. So if it storms, I have good storm seasons. I make a lot of money. If I have weak storm systems, then I perfect.

[Rachel Cruze]

What I would do is out.

[Caller]

Like I usually have about a four to five month slow period throughout the year that I save my money for that slow time. And so the thought of paying that money off onto my debt.

[Rachel Cruze]

Gotcha.

[Caller]

Work dies off and now I'm scrounging for money to pay my bills.

[Rachel Cruze]

So yeah, so the, so the paying extra on your debt is that doesn't include your monthly expenses. So I would, I would have. Have that fund of what you've set aside for savings, which is so smart. That would consider that amount of money for your expenses for your, your four walls, your food, your shelter, utilities, transportation. That's not just extra money. That's just hanging out, that has no purpose. That's to cover your basic living expenses during low season. So we do say to have an account that we call your peaks and valleys. And so you, and if you know, okay, we spend X amount every single month, month that we need this much. And if we don't bring in any money, I have to pull this amount out of savings in order to cover our expenses. Like if you're down to a T like that and you know that that fund is there for that. No, I would not throw that extra at the debt. That's totally fine. The paying off debt is above anything or anything that you can cut. So I would look at your lifestyle and say, hey, is there anything in our regular expenses that we have, regardless of, you know, seasonality, of the weather, weather that we can throw extra at the house? But no, you're that fund. I would consider your peaks and valleys fund to be able to literally pay your bills. So we don't tell people to get behind on their bills to pay off debt, stay current, which is what that fund is for. But anything extra that you can squeeze out of the budget and or any more work you can do in those slow periods.

[Jade Warshaw]

That's the t. That's the T right there. Is doing work in the slow period.

[Rachel Cruze]

Yeah, go get another job during that time and man that you double up, which is great.

[Caller]

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[Jade Warshaw]

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[Caller]

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[Jade Warshaw]

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[Caller]

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[Rachel Cruze]

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[Caller]

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[Rachel Cruze]

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[Caller]

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[Host/Announcer]

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[Caller]

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[Host/Announcer]

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[Jade Warshaw]

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[Caller]

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[Rachel Cruze]

Well, if you enjoy the show, one of the best ways that you can help us out is by spreading the word. So putting it on social, sharing it with your friends and family. It's always helpful. So make sure to subscribe and yeah, give us a. Like, share the videos. And we always love to. To spread the word about the show because we want to help people get control of their money.

[Jade Warshaw]

Absolutely.

[Rachel Cruze]

All right, next, let's go to Trey in Houston. Hi, Trey. Welcome to the show.

[Jade Warshaw]

Show.

[Caller]

How you doing?

[Rachel Cruze]

We're doing good. How can we help?

[Caller]

So I'm about $4,000 in credit card debt right now. I don't have any other loans. No. Any other. Anything else? And basically me and my girlfriend have been talking about getting married, and I've been thinking about just engaging to her soon and stuff. And she. We've been talking about homes and everything like that, and we've been. I've been talking to her about the show, but I just want to know, how can I. My girlfriend, that I kind of lied about my financial situation.

[Rachel Cruze]

Oh, no. You lied. What happened?

[Caller]

So basically, I only told her, like, $2,000.

[Jade Warshaw]

Why did you lie, Trey? Why?

[Caller]

So at first, that's where I was at, and then I started just. It started racking up over time. But I did get my first. My. Well, my third apartment, and then I just. Now it is.

[Jade Warshaw]

So let me make this. Let me understand. When you told her you had 2k, did you have 2k and then you accumulated another two without telling her that you accumulated that while you were accumulating the other two?

[Caller]

Yes.

[Rachel Cruze]

Okay.

[Jade Warshaw]

Okay. That makes me feel a little bit.

[Rachel Cruze]

Yeah, for sure. Yeah. So you didn't lie to her, like, up front, but you've not been honest with her. Since when was that conversation that you told her 2k and now it's 5k was a year ago or like 2 weeks ago ago?

[Caller]

It was a couple. It was a couple weeks ago.

[Rachel Cruze]

Couple.

[Jade Warshaw]

So you accumulated the 2K in two weeks?

[Caller]

Yeah.

[Jade Warshaw]

Oh, okay.

[Rachel Cruze]

Doing what again? Did you say your third apartment? What. What was the 2k for?

[Caller]

2K was used mainly for basically, like, a lot of the, like, stuff that I have that currently. I got a lot of new stuff that I really haven't kind of told her about either. Like, I got a lot of new stuff.

[Jade Warshaw]

Name it.

[Caller]

I got a new bed.

[Jade Warshaw]

Okay.

[Caller]

I got a new bed. I got some other, like, like pots, pans, stuff like that.

[Jade Warshaw]

Okay.

[Caller]

Because you just moved.

[Rachel Cruze]

Okay. So you're buying stuff for the apartment.

[Caller]

I moved. Not too. So basically I moved not too long ago, but I've been at her apartment a lot of my time.

[Jade Warshaw]

Understood.

[Caller]

So a lot of the stuff has been at. I've been at her apartment. So just tell her I'm like, I should have moved in.

[Jade Warshaw]

What do you think will happen if you say, hey?

[Caller]

Just so you know, she's listening now, so she's probably hearing me.

[Jade Warshaw]

Is she there with you, or is she, like, at work listening?

[Caller]

And you're gonna come home to fury listening on the. Yes, I'm gonna.

[Rachel Cruze]

All right. Well, hi, Trey's girlfriend. I hope you're doing well.

[Jade Warshaw]

This is like, Maury. Why did you make it like this, Trey? Okay, so what's your girlfriend's name? Can you say it since she's listening?

[Caller]

Shayla.

[Jade Warshaw]

Shayla.

[Rachel Cruze]

Shayla.

[Caller]

I can say it.

[Jade Warshaw]

All right, Shayla. Now you know, and we're trying to tell him he needs to come home tonight and tell you what happened, but he's telling you now, now. So the key here is you need to start paying this off. What are you making? What do you earn, Trey?

[Caller]

So I originally earned about 48, but now I make around 50 because I got a 4% pay increase.

[Jade Warshaw]

Good.

[Caller]

So I make around 50 a year at this point. I've been talking. Me and her have been talking about this. Like, we've been talking about your show. We've been talking about the baby steps. I sent it to her today and stuff. So we've been really talking and honing in, and we've been talking about all this stuff about getting out of. Of debt. She kind of told me where she's in debt on her end.

[Jade Warshaw]

How much does she have?

[Caller]

I kind of just like around 8 or 9,000, and it's in student loans.

[Jade Warshaw]

Okay. Now, can I ask you, Trey, if you've been listening to this show, what caused you to go. I mean, you have a fine income. 50,000. What caused you to go into debt to buy pots and pans and a bed? Why didn't you just. Cash flow that what was going through your mind?

[Caller]

So at first, the problem was, was that I had to get the stuff that's currently in my apartment. The couch and bed stuff is not mine. It was my sister's, so I have to give that back to her.

[Jade Warshaw]

Got you. So you felt like you were in a time crunch?

[Caller]

Yes, I was in a time crunch situation where, like, I have to, you know, kind of spend it. Just kind of do it. Either do it now. It's a situation.

[Jade Warshaw]

So I just want to encourage you going forward. I love that you and your. And Shayla are listening to the show. I love that you guys are starting to hone in on this. I just want to encourage you and also just admonish you going forward. There's always going to be times where you feel like there's a time crunch. There's gonna be times where you feel like you have to move fast.

[Rachel Cruze]

Urgency is where the debt. The debt industry loves you. When you're urgent, whether you're on a car lot and you're like, I gotta get a new car.

[Jade Warshaw]

Yes.

[Rachel Cruze]

I moved to. Oh, God. Oh, God.

[Jade Warshaw]

They find you in crisis.

[Rachel Cruze]

That's right. 100%. 100%.

[Jade Warshaw]

But if you can start now to exercise the muscle of just even taking a moment, taking a breather, and going, okay, what can I do instead? Can I sleep on a friend's couch for a week while I save up some money? Yes. Could I go on Craigslist or Craigslist.

[Rachel Cruze]

Or an air mattress? A hundred dollar air Ma.

[Jade Warshaw]

I slept on an air mattress for a long time.

[Rachel Cruze]

Yeah. So just always know, Trey, that there is always another option. Okay? So in a situation, whether it's furniture or a car, there are options out there. So slowing down is a really big part of making wise financial decisions. Not feeling you're backed into a corner that. And then. And I would want to get to. And again, it's only been two weeks, so it's not like you've lived with this for months and, like, lied to her.

[Jade Warshaw]

Right.

[Rachel Cruze]

You know, I mean, like. But I would want to know from you what's caused you to not tell her? Is it because she'll get mad? Is it that you're embarrassed? Is it that you wish you had done better and now you kind of have some guilt and shame around the choices that you've made? What was the main motivation? Do you know?

[Caller]

I would say, honestly, for me, the main thing was just like, you know, me and her have been talking about marriage and, like, we've been talking about how much we want to spend. She's been talking about being. Getting eloped. It says, so we can save a lot of that money. We don't just go in and just have this big wedding ceremony.

[Rachel Cruze]

Yeah.

[Caller]

And she's not looking for that. I think we've been. It was a situation where it was, like, a little bit of embarrassment. Like, dang, like, you know, I didn't really want to tell her that I just did this because she's gonna. She's gonna tell me, hey, why'd you do that? You didn't need to do that. We figured something out.

[Rachel Cruze]

Yeah. Yeah.

[Jade Warshaw]

Even. Even this. Even this, Trey, is an example of just learning that communication pattern. You had a feeling about not telling her. You didn't tell, but then even still, you came on the show as a strange way of telling her. I would just want to encourage you in the future just, if this is a person you love, you trust, go to them and tell them the truth.

[Rachel Cruze]

Yeah. And starting off marriage with hiding the pots and pans, Trey, we don't want to do that. We don't want to do that. We don't want to get. We don't want to get in that habit because genuinely, I mean, secrets start to. That erodes trust so fast. And as honest as you can be, Trey, with her about this and going forward, I mean, yeah, Jada, we've been married. We've been married over a decade, both of us and to men, our own husbands. Yeah, yeah, sorry. Not to each other, to our own spouses. That we.

[Jade Warshaw]

One thing, I think we both could.

[Rachel Cruze]

Say that, you know, there are things that are going to come up in life that you're embarrassed about and you're, you know, you don't like things.

[Jade Warshaw]

You know what I mean?

[Rachel Cruze]

Like that is going to happen. And the moment you start hiding those things is where that trust erodes. So the more vulnerable and honest you can be trained. This is a great first step. And let me just say to lighten the, Lighten the load a little bit, that it's $2,000. Okay.

[Jade Warshaw]

Yeah. It's not.

[Rachel Cruze]

Some people, you know, sometimes it could be much worse. It can be much worse. But. But that doesn't matter. Regardless of the amount, it's the principle behind it.

[Jade Warshaw]

Right.

[Rachel Cruze]

That I want you to get in a healthy pattern of you guys communicating and being on. And, And I want you to cut up the credit. Was it credit cards that you. That you charged it on?

[Jade Warshaw]

You said?

[Caller]

Yes, it was all. It was credit card.

[Rachel Cruze]

You guys have been talking and listening to the show. You've been talking about the show. Listen to the show. Once you start doing stuff that we talk about. So cut up the credit cards, you guys. Cash flow. She sounds amazing. I know she's listening, girl. We are for you. We are on her team and your team, Trey. But she sounds so level headed. And be wise about this, you know, if you don't have the money, don't buy it and let that start to be a pattern in your life. And that, that includes the engagement ring. That includes the wedding and the honeymoon and all the things. Things. But yeah, I, I think it's. I think it's going to Be awesome. Do you know when you're going to. Well, no, I don't ask.

[Jade Warshaw]

How long have you been together.

[Caller]

Right now? I've been with her off and on. We were off and on for about a year now, but I have been secured with her for about going on three months now.

[Rachel Cruze]

Secured with her.

[Jade Warshaw]

That's a good.

[Caller]

I don't know, really, really on.

[Jade Warshaw]

Like, that's a phase I didn't know about.

[Caller]

Yeah, secured like it before. We stopped talking for a little bit and then we got back together.

[Jade Warshaw]

Okay. Okay.

[Rachel Cruze]

I like it. I like it, Trey. I'm excited for y'. All.

[Jade Warshaw]

Oh, man. Love it.

[Rachel Cruze]

And all the, all the security coming forward.

[Jade Warshaw]

It's great.

[Host/Announcer]

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[Rachel Cruze]

The all new every dollar is here and now. It is way more than than just a budgeting app. There's so much in this and the features are incredible. And it's all designed to help you make progress faster when it comes to your money. The average person finds thousands of dollars in margin in just the first 15 minutes of using the new EveryDollar. So start EveryDollar for free today. You can get it in the app store or Google Play. All right, let's go to Andrew in Chicago. Hi, Andrew. Welcome to the the show.

[Additional Caller/Guest]

Hey, Jace.

[Caller]

Hey, Rachel. How you guys doing today?

[Rachel Cruze]

We're doing great. How can we help?

[Caller]

So I am about to propose to my girlfriend of five years coming up in the next month or so.

[Rachel Cruze]

Oh, congratulations.

[Caller]

And with us moving forward, obviously that comes wedding and pay for the wedding and looking at buying a house in the next couple of years. My question is, is when you're saving up for a down payment and for a wedding, should you still invest your 15% of your income for like retirement or should you reduce that to a lower percent or kind of guidance on that?

[Jade Warshaw]

Well, so in the baby steps, technically the house would be 3B. So you'd save up baby step three first. So three to six months. Then you do 3B, which is say for a down payment payment, and then 4 is the investing the 15. Now if you felt like you could do 3B and 4 at the same time and make, you know, find progress on that down payment, I would say that's fine. That's up to you guys if you want to do that. Do you have any other debt or anything like that?

[Caller]

So we're both out of debt. She's going to be graduating college here in December.

[Jade Warshaw]

Great.

[Caller]

Debt free. I'm currently debt free free. We're keeping our finances separate until marriage.

[Rachel Cruze]

Okay.

[Caller]

So kind of just looking for guidance for what we should do. I currently have 20,000 in savings.

[Rachel Cruze]

Okay. Does she. Go ahead, go ahead.

[Caller]

My yearly salary, I'm going to a new job in two weeks. My current salary will be a hundred thousand and her salary as a teacher will be 50,000 when she starts in January.

[Jade Warshaw]

What would you be looking to spend? I mean, in the Chicago area, it can be pretty spendy. What do you. What's it going to cost to get what you guys need?

[Caller]

Probably somewhere as a first home. Probably somewhere between 2 and 300.

[Jade Warshaw]

Oh, okay. Okay then. Yeah.

[Caller]

Further out in the west.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

And the wedding. Right. How much are you guys wanting to spend on the wedding? Wedding.

[Caller]

We'Re just getting into those weeds. We haven't really decided on a budget yet.

[Rachel Cruze]

Don't call your wedding a weed.

[Jade Warshaw]

Is family helping pay for any of that or is it all on you guys?

[Caller]

Yeah, I believe both her parents and my dad both are going to contribute to the wedding.

[Jade Warshaw]

So the first point of that would be really sitting down with them and finding out honestly what they plan to contribute. Because that's going to, I mean, obviously heavily impact what the overall spend of the wedding is because you guys are then going to have to look at your budget and say whether they help us or not, here's what we can Contribute. So having those numbers ahead of time and also understanding how it will be dispersed is very important to planning a wedding. Because if their thought was like, oh, we're just going to give you 10 grand as a wedding gift, that's very different because deposits and stuff have to be made. So really getting in the details on that, that, as awkward as it may seem, I think is so important and is so helpful. Yes. On the beginning part of planning a wedding because those timelines and those, you know, those deposits, they got to go on time. So.

[Rachel Cruze]

Yes. Yeah. So to make sure you guys know, okay, here's what we're being helped with that amount and is that amount of money enough for what we're wanting as a wedding? And if not, how much more do we need to add to that and is that realistic or do we need to pull back some of our expectations?

[Jade Warshaw]

So that.

[Rachel Cruze]

And then on top of that, yes, saving for. Saving for a, a house. So if, yeah, if I were you guys, you know, I'm okay with people pausing baby step four and not investing for maybe 3ish years. That's not really a hard and fast rule.

[Jade Warshaw]

But it's a good one though.

[Rachel Cruze]

Anything beyond that, I would probably want to get in and start investing because that compound interest is so great. But if y' all need to pause for a few years just to build up, up a large amount for a down payment, that I would be okay with that. But I probably wouldn't go any longer than three years not investing.

[Caller]

And then the three to six month emergency fund, is that based off of your income or off of expenses?

[Jade Warshaw]

It's really based off of. You could think about it a couple of ways. So I like to think about like job situation, I like to think of relationship status and health. So for instance, if you were a single person, I'd probably automatically go to six months simply because if I lose my income, that's it. Right. But if I'm married and there's another person who, if I lose my income, but if they have theirs, there's a little bit more security there. So that's kind of how I consider like the relational side of it. Then I'm thinking about health. If one of you is in, you know, poorer health and there's an opportunity for hospital stays or being out of work, that's another thing that could impact pact wanting to have six months versus three months. So those are the kind of things that I look at with you guys. I mean, is there anything, well, and.

[Rachel Cruze]

I think I would say too from are you Asking, should you save three months of income or three months of expenses? Or were you asking time frame based.

[Caller]

Based off of how much you should save? Is that based off of saving up to three months of your income or.

[Rachel Cruze]

Yeah, so we don't really do by income. It's more of expenses. So when you look at keeping.

[Jade Warshaw]

Yes.

[Rachel Cruze]

You know, the rent paid, food on the table. So that's what Winston and I did. We kind of looked at our monthly bones and we stayed. Did you go bare bones?

[Jade Warshaw]

So we did it. Bare bones at first and then you.

[Rachel Cruze]

Later on we upset.

[Jade Warshaw]

Yes.

[Rachel Cruze]

So, yeah. So you guys could just start with, okay, what keeps food lights on, the rent paid. And get that, you know, not all the extra exciting stuff, you know, no going out to eat. Like, if you got the bare bones, how much is that? And then you can multiply that by 3, 4, 5, 6, and that can give you kind of that number for that emergency fund. But what Jade's saying, too, I think is important. Important that you guys are going to be two people with two incomes, no kids. So you really could go on that three month. Especially since you are going to be saving up for a down payment.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

Like getting to that.

[Jade Warshaw]

Because you can always come back later.

[Rachel Cruze]

Yes. And do it. That's right. That's right. Is that helpful, Andrew?

[Caller]

Yeah, that's perfect. That's questions. Both questions. So unanswered. Definitely. I didn't know.

[Rachel Cruze]

Perfect. So great. Well, congratulations again. Yeah, that's gonna be fun. All right, quickly, let's go to jam in San Diego. Hi, Jamie, welcome to the show.

[Additional Caller/Guest]

Hi. Thank you so much.

[Rachel Cruze]

Yes. How can we help today?

[Additional Caller/Guest]

Okay, my question is, we, my husband and I, seven years ago, were gifted Financial Peace University as a wedding gift. We were able to get completely out of debt, save six months of expenses in our emergency fund. We currently invest 15% of our awesome household income and we have about $215,000 in savings.

[Rachel Cruze]

Okay.

[Additional Caller/Guest]

We live in a really expensive area. We cannot afford to pay a mortgage yet. We're in San Diego, so it's just really expensive. But my question is, we just had our second kid. I'm supposed to go back to work in December. The thought of going back to work and paying so much in childcare for someone else to raise our kids is just really hard. So is it just a completely stupid move for me to not go back to work and us pull one to $2,000 of savings each month so that I can stay home with our kids because we have such a big savings of savings?

[Rachel Cruze]

Yes, you'll have 250. You'll have 250 liquid, right?

[Additional Caller/Guest]

Two. 215.

[Rachel Cruze]

215. Okay. You know, I, I would be okay with it for like, I don't know if it's, if it really is 1,000amonth and you need a little. So 2,000amonth?

[Additional Caller/Guest]

Yeah.

[Jade Warshaw]

What's the long term plan? Is there a long term solve here or are you just living in an area that's way too expensive for you guys? Do you need to move?

[Caller]

No.

[Additional Caller/Guest]

Well, my husband changed careers about six months ago and he is on a track where be getting promotions and so hopefully this would only be a year or two.

[Rachel Cruze]

Okay.

[Additional Caller/Guest]

Savings. And he has, yeah, he has a lot of growth opportunity. But it's.

[Rachel Cruze]

So there's, I would say, Jamie. So I would say I would be okay with it. I think you guys have worked hard. You put money aside to be able to make some of these moves. But I would have a threshold because what can happen is you're like, well, we're in San Diego. You know, the promotions haven't really come. It's not really what's happened. You know, if stuff doesn't happen according to plan, you can start justifying your position that 215 is going to be gone in an instant. So you need a threshold to say we're not going past a hundred thousand in savings. So either I have to go back to work if the promotions aren't coming but have that threshold. But yes, I am okay with it for a time for sure. But don't sit there and just drain that 215 without another plan. So have a threshold of what you will not pass. That can be whatever number it is for you guys. But yeah, you've worked hard to make choices and this is a choice you want and you can afford it. Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm Rachel Cruze hosting today with Jade Warshaw and we're answering your questions. Up next we have Nancy in Dallas, Texas. Hi, Nancy, welcome to the show.

[Additional Caller/Guest]

Hi. Thanks for having me.

[Rachel Cruze]

Yes, absolutely. How can we help today?

[Additional Caller/Guest]

So my husband lost his job about a week ago.

[Rachel Cruze]

Oh my gosh.

[Additional Caller/Guest]

He was our sole income earner as I'm high risk pregnancy right now with our third kiddo and I just want some guidance on how we navigate the next few months until he's able to find work.

[Rachel Cruze]

Oh my gosh.

[Jade Warshaw]

Okay. Are you high risk because of your age or are you high risk because of other factors?

[Additional Caller/Guest]

Because of other factors.

[Jade Warshaw]

Okay.

[Additional Caller/Guest]

And thank God. There's a chance that. That the issue will resolve itself by the time the baby comes to term.

[Rachel Cruze]

Yeah. How far along until that?

[Additional Caller/Guest]

I'm on bed rest. Okay, man? I am 24 weeks right now.

[Rachel Cruze]

Okay. Okay. So financially, where. Where are you guys. How much debt do you guys have?

[Additional Caller/Guest]

So we actually moved houses earlier this summer to a house in the country, and we've been trying to sell our other house.

[Rachel Cruze]

Oh, gosh. You have two mortgage payments?

[Additional Caller/Guest]

No, thank God. We were able.

[Caller]

Our.

[Additional Caller/Guest]

The house we're in right now, we have no debt on.

[Jade Warshaw]

Oh, great.

[Additional Caller/Guest]

Yeah. But we have debt on the old house.

[Rachel Cruze]

Okay.

[Additional Caller/Guest]

And then we have two car loans.

[Rachel Cruze]

Okay. How much are your car loans?

[Additional Caller/Guest]

My husband owes five grand on his truck, and then we owe 24 grand on my minivan.

[Rachel Cruze]

Okay. And how much is the payment on the 5K, the truck?

[Additional Caller/Guest]

$770 a month.

[Rachel Cruze]

Okay. And how much is your van payment?

[Additional Caller/Guest]

$507.

[Rachel Cruze]

Okay. And how much is the mortgage payment on the house that you're not living in?

[Additional Caller/Guest]

$1,470.

[Rachel Cruze]

Okay, perfect. Okay. And what was he bringing home per month? Like, what was hitting your account?

[Additional Caller/Guest]

He got a lot of overtime, so consistently between seven and eight, but his base pay was $40 an hour, 36 hours a week.

[Rachel Cruze]

Okay, and what was. What was he doing? What kind of work?

[Additional Caller/Guest]

He worked maintenance facility maintenance.

[Rachel Cruze]

Okay. Okay.

[Jade Warshaw]

Do you have any money saved? I mean, you were able to buy a second house kind of outright. Where'd that money come from?

[Additional Caller/Guest]

My husband worked really hard. We both did 401 while. And then we came into some family inheritance money, and so it just kind of, like, sped up this process for this dream we had of moving out of the city and slowing down our lives.

[Jade Warshaw]

Yeah.

[Additional Caller/Guest]

So between savings and inheritance, we were able to get out here, and then we thought selling our previous home, it would pay off the cars, pay off the mortgage.

[Jade Warshaw]

What will it bring when you sell it?

[Additional Caller/Guest]

Eventually, it's listed for 260 right now, and I owe 160 on it. Okay, so it should pay off all of our debt.

[Rachel Cruze]

Yeah.

[Jade Warshaw]

Okay. And so you don't have anything left over saved from.

[Caller]

We.

[Additional Caller/Guest]

Now. We ended up using all of our savings, pretty much built the house. We still have our 1,000 emergency fund.

[Jade Warshaw]

1,000.

[Rachel Cruze]

Okay, tell me this, Nancy.

[Jade Warshaw]

How.

[Rachel Cruze]

How hard will it be for him to be able to replace that income? It just feels like maintenance. I don't know. Again, I don't want to be ignorant, but I feel like that's a very wide spectrum of being Able to probably plug in some. Somewhere pretty quickly. Right. Would you. Does he feel like there's options?

[Additional Caller/Guest]

He's been applying a lot. I don't know that we'll find anything that's comparable to the last company.

[Rachel Cruze]

Sure.

[Additional Caller/Guest]

But I think we can find something in the high 20s, low 30s.

[Rachel Cruze]

Sure. Okay, so what I would do, because y', all, you guys have $2,700 a month going out to debt. And I would, I would figure out maybe you already have a really tight budget to figure out. You don't have a mortgage pay on the house you're currently living in. But I would figure out food, utilities, gas for the cars, like the things that you guys have to have and figure out. Okay, here is the minimum that we can scrape by. And I don't know what that is going to be for you guys. I don't know if it's 4,000, 5,000. I have no idea. But you guys need to figure that out with the debt included. And if I were you, which I'm so urgent, so I can't even imagine how you're feeling, that you're on bed rest and like this is happening, happening. Did he get any severance at all?

[Additional Caller/Guest]

No. No.

[Jade Warshaw]

Okay, what's the, what's the movement on the house? Is there anything like I would be on my realtor, like, we gotta close, like we gotta get an offer and close in 30 days.

[Additional Caller/Guest]

We've had the house listed since June and it was originally listed at 290 and we've dropped it 30k.

[Jade Warshaw]

When did you do the drop?

[Additional Caller/Guest]

Five months.

[Jade Warshaw]

Oh, it's been gradual. Okay.

[Additional Caller/Guest]

It's been gradual.

[Rachel Cruze]

Yeah.

[Additional Caller/Guest]

Down. I think the last drop we did a week and a half.

[Rachel Cruze]

Yeah. Average is two months right now sitting. So you guys are over that a little bit.

[Jade Warshaw]

So it might be a price thing.

[Rachel Cruze]

Yeah. So I, I am with Jade. You know, if you what, what you guys can do to. To be urgent on that, but even urgent on the, on the income side, like if I were him, you know, I wouldn't, I wouldn't care if it's comparable for right now because some things are going to turn right this after, you know, you have the baby, the house sells. Like some things are going to start to like, alleviate some stress. Right. As life continues on, I mean, it'll be in the next, you know, six, seven months. But until then, in these next bit, I mean, I would think until like summer, like that would. Would be in my head. I got to go do anything. Yeah, anything to be able to stay current on this stuff. And, and my hope is, too, Nancy, that he, that he does apply and that what he was doing, obviously, was bringing a market value of something that was fantastic and that he can find something. You know, I think there's always a natural assumption in our human spirit that we, if we lose something, that the next thing's never gonna be as good. And so we're probably gonna have to always downgrade, especially if there's, like, a layoff situation. But that's not always the case.

[Jade Warshaw]

Yeah, I think both of you've got to sit down tonight and decide that come hell or high water, like, debt, you're not gonna go crazy into debt because of this. Like, even if he's picking up Uber tomorrow, like, any money coming in is going to be better than no money coming in. Because with $1,000. Yeah, you guys are, you guys are up against the wall, which is for the listening audience. Why we always say you got to have three to six months of expenses before buying a house. You've just got to have it, even if you're counting on another house to spend. Money's not yours until it's in your hand. Like, that's, this is a cautionary word for the wise, for, for everybody else to listening and yeah, for you guys, Nancy. I mean, we're pulling for you whatever he can get immediately. I, I, we had a call the other, the other day where a guy lost his job, and I'm, I, I'm going to give you the same homework that I gave him, which is to make a list tonight. You guys sit down, make a list of everybody you know that's in that field or know somebody that's in that field, and call them, like, make contact. Don't just text them, call them and say, hey, I'm in the market. Do you know anything? Have you heard anything? And really start making those connections person to person, as much as you can. He should be going to coffee with people and. Because that's the way you're going to get a job, just putting in resumes, you know, on the Internet doesn't work anymore. So make that list tonight and you guys hit the pavement on that.

[Rachel Cruze]

Yeah, absolutely, Nancy. Oh, I'm so sorry. I could only imagine how stressful. But I think the stress will lower when money starts coming in any way that's possible for him in the season. That's what we're looking at. And I know, I'm sure he feels it, too. Yeah. So, and again, that budget, figuring out how much on the minimal side that you guys can spend on food, utilities, all of that. Cutting subscriptions, not going out to eat. You guys are bare bones. It's kind of that crisis mode right now. And that's okay. And you're going to get through it. You're going to get through it and he's going to find another job. House is going to sell. Things are going to happen. But for now, we are going to buckle down. Hey guys, it's Rachel Cruz and I've got great news for you. The Ramsey Christmas cash giveaway is here. We are giving away $500 every week plus a grand prize of $5,000 in cash. Listen, you can enter daily to boost your chances of winning and there's no purchase necessary. Just go to ramseysolutions.comgiveaway. that's ramseysolutions.comgiveaway. good luck, you guys. Everyone needs insurance, but it can be hard trying to find a pro who's not just looking to make a buck, but agents that actually know their stuff and they're wanting to help you. So with a Ramsey trusted insurance pro, you'll never have to deal with a sleazy business or slimy salespeople because they're all interviewed, they're vetted and coached to make sure that they are market experts when it comes to your best interest. So go to Ramsey Solutions.com coverage to find the type of insurance that you're looking for and connect with a Ramsey trusted agent. Or you can click the link in the description if you are watching on YouTube or listening on podcast. All right, let's go to Mary in Portland, Oregon. Hi Mary. Welcome to the show.

[Additional Caller/Guest]

Hi.

[Rachel Cruze]

Hello, hello, hello. How can we hi help today?

[Additional Caller/Guest]

Oh, thank you so much for just hearing this story out and giving your thoughts. So basically my husband and I were debt free except for our mortgage. And he is a hardcore do it yourselfer. Works really hard. He's a diamond in the rough. He we bought 10 acres 23 years ago when we got married with a single wide mobile home on it with the intention to build and you know, life happens and there was five of us in 850 square feet. So him being him built in addition onto the mobile home that has failed. We have extreme mold and it needs to be torn down. He wants to rebuild it and I think that we should either build or bring in a double wide mobile home. We've even looked at moving but with a brand new grandbaby on the way and my mom just recently in assisted living, I don't think that that's just an option. So we're kind of curious, what would you do when you're in this situation, when you really don't owe much on your mortgage and you're looking at adding another mortgage?

[Rachel Cruze]

Yeah. Just question. Why can't you move? You said a baby and your mother. Is it because you don't want to leave the area or the property because you could move somewhere else? I'm not saying that's the option. I'm just making sure that I've. That I heard you correctly.

[Additional Caller/Guest]

Basically, it's family that's here, and we live in an area that's extremely expensive, and we could never purchase what we have right now and replace it. My husband has built a shop on the property that he has worked out of. And so that would mean leaving that and leaving our extra income. We just couldn't replace it. We'd have to move really far away.

[Rachel Cruze]

Sure. Okay. And you guys have. Is it 25 acres?

[Additional Caller/Guest]

We have 10 acres.

[Rachel Cruze]

10 acres. Okay, perfect. And how much is the mobile home worth right now?

[Additional Caller/Guest]

You mean like the current mortgage?

[Rachel Cruze]

Yeah.

[Additional Caller/Guest]

We owe 95,000.

[Rachel Cruze]

Okay. And how much do you guys make a year?

[Additional Caller/Guest]

A year? He's at 80,000 a year.

[Caller]

Year.

[Additional Caller/Guest]

That doesn't include any of the extras.

[Rachel Cruze]

Okay. On average, what does he make extra?

[Additional Caller/Guest]

That one? I couldn't say. It kind of comes and goes, and so we don't really rely on it. And it could be a couple thousand every month or so.

[Jade Warshaw]

So can I ask a question about the addition? So you've got. You had the initial mobile home, then you added an addition. The addition is the only place that has mold. Right.

[Additional Caller/Guest]

As far as I know, we haven't dug too far into it other than the addition yet.

[Jade Warshaw]

So if you were. How many in your family is it just.

[Additional Caller/Guest]

There's five of us.

[Jade Warshaw]

Five of us. So if you were to remove the addition, could everybody temporarily be in the initial part of the house? Or, like. I don't know how large this is.

[Additional Caller/Guest]

It's 850 square feet. Yeah. I mean, it would be tight, but, yeah, we could do that.

[Jade Warshaw]

How much would it cost? I'd love to know the numbers of what it would cost to remove the addition and then what. What it costs to add another addition.

[Additional Caller/Guest]

My husband does all himself. He won't let anyone else do it, so.

[Rachel Cruze]

Okay. Well, still, he may not have an option. I mean, like, you know what I mean? Like, that's. That's where people pin themselves into bad situations, is because, well, he won't do it or, you know, and I'm talking more to him than you, Mary, that, you know, you guys are in a situation that it's like, I don't know, it may have to be an option. You know what I mean? Like, just taking it off completely because of his pride. And he doesn't. Doesn't want to. He just wants to do everything himself, which obviously didn't work. So we need all the options in the world. Right. Do you feel that way? But he, like, won't even. He won't even entertain the idea.

[Additional Caller/Guest]

No, he will. He'll. He'll entertain any of the ideas. He's phenomenal. We just want to make a financial decision. That's correct. You know, because we don't own much on our property. He is more of the type that once it's paid off, he can breathe and he has room, but yet we have no home to live in.

[Jade Warshaw]

Well, yeah, you can't live in mold. So again, again with my other question is, regardless who does the work, what's it cost to tear it off and what's it cost to put a new one on?

[Additional Caller/Guest]

I mean, I guess tearing it down, he would do. So it wouldn't cost anything to tear it down other than taking things to the dump.

[Jade Warshaw]

Okay, so free. Okay. And then.

[Additional Caller/Guest]

And rebuilding it. I think it cost us maybe 5 to 7,000 to build it.

[Jade Warshaw]

Okay, so then that would. That's the equation we're solving for. How could. Quickly now if you have to. That's why I asked, can everybody stay in the main side? Because you got to get out of the mold. So it's like getting that done and then doing the math of how quickly can you save 5 to $6,000 with the margin that you have because there's no other debt. You should have a decent amount of margin laying around. I mean, maybe not a decent amount, your family of five on 80,000, but.

[Rachel Cruze]

Do you work, Mary?

[Additional Caller/Guest]

I homeschool my kids.

[Jade Warshaw]

Okay.

[Additional Caller/Guest]

Yeah. So. Yes, I do.

[Rachel Cruze]

Yeah. No fair. Fair. I shouldn't. Yes. I phrase it that way, but I.

[Jade Warshaw]

I say I'm still going to ask the same question. Because you work full time, your husband works full time, Both of you are going to have to do something on the side to bring in income in order to save up this five to $7,000 as quickly as possible. Because you guys are going to feel each other's presence and single part of.

[Rachel Cruze]

That mobile home, his side business. I mean, you said kind of like. Well, it's like around a thousand, maybe two thousand a month, but we don't really count on it. I would be Counting. I mean, I would. I would make it a goal to say we need to save at least $2,000 for the next three months. That's 6,000. So then we can start the addition, and that'll be a couple of months to do that. And so, you know, life looks different come, you know, May June, if you guys actually buckle down and say, hey, no, no, no, we are going to work extra to make this actually happen.

[Additional Caller/Guest]

Yeah. The one thing that concerns me is the fact that once you get into a mobile home and you take parts out of it and you add new parts in, it's not.

[Caller]

Leg.

[Additional Caller/Guest]

Insurance doesn't cover you if your house burns down.

[Jade Warshaw]

So that means. So what you're saying is your husband can't do the work. You have to hire a professional.

[Additional Caller/Guest]

I don't think legally you can build an addition onto a mobile home.

[Jade Warshaw]

But he did, and you were living with that, and you wouldn't have said it. I'm. Don't get me wrong. I'm not saying that you need to do something legal, but where was that logic the first time, I guess, is what I'm asking.

[Additional Caller/Guest]

My husband does things on his own terms.

[Jade Warshaw]

Got you. So, Mary, help me with this. When you called in with the question question, Rachel's first thing was you, you need to move somewhere else. And you were like, that's impossible. So now we're. Now we try to go into your world and say, okay, well, then let's just rebuild. And you're like, well, here's the problem. So what do you want to do?

[Additional Caller/Guest]

I mean, I'm open to anything. That's why I was called.

[Jade Warshaw]

Well, you're not open to anything because you're not open to moving, and you have no. I'm. I'm. Well, I'm. Listen, I'm on your side, but I'm just saying what you said back to you. You. You're not moving is too expensive, and you're concerned with the legality of the addition. So there you have some qualms. So you're going to have to choose. Is there an option that we didn't think of is, are you thinking, hey, scrap the mobile home and let's build our own home. You tell us what you're thinking of doing so we can help you get there.

[Rachel Cruze]

That's probably what I would look at anyways, Mary, to make it a goal to. To build something. It'll obviously be more expensive, and it would be adding on a mortgage. So I want you guys to. To do that. But having something that, you know because mobile homes, I mean, depending on the market. Yes, sometimes they do go down. And so having something from a financial standpoint that's really steady for your family long term I think is a, is a great goal. Is there, is there a building plot for, on that land, on that 10 acres? I mean, I'm sure there is, yeah.

[Additional Caller/Guest]

Right where we're sitting.

[Rachel Cruze]

Okay. So yeah, so maybe it's you guys moving somewhere part time.

[Jade Warshaw]

I don't know.

[Rachel Cruze]

I mean, I don't know, Mary. I'm just trying to think of things.

[Additional Caller/Guest]

That's what I was kind of leaning towards. Okay, but is that financially a good choice when you're almost paid off on your mortgage, do you want to add another 30 year mortgage?

[Jade Warshaw]

Well, it's not that, what, what you could consider and I, this is just, I'm throwing something out there because I like Rachel's idea of getting in something permanent that can go up in value. But the truth is you don't have the money to do that today and you're living in a situation that's not healthy because of the mold. What if you kept the land? What if, if you rented somewhere for a while to save up to be able to build on the land. People do it every day. And going, rent, renting for a while is not going backwards.

[Rachel Cruze]

No, and it would be, you know, he could still keep his shop, you know, there on the land. But yeah, you guys are going to.

[Jade Warshaw]

Have to get creative, figure something out.

[Rachel Cruze]

For a long term plan to get this to work. So it's not, yeah, it's definitely not one plus one just equal vehicles too. And this is like the easy route. There's gonna have to be some give and take from you guys from location standpoint maybe for a little while while you guys save some extra work that you're doing. But again, you're thinking the long term thinking here for housing is the key, not just in the next six months.

[Host/Announcer]

Buying and selling a home is a big deal and you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey trusted real estate agents. They're handpicked pros who know their stuff, listen to your needs and have your back from the first call all the way to closing day. To find a Ramsey trusted agent near you, visit ramseysolutions.com agent ramseysolutions.com agent.

[Rachel Cruze]

Up next we have Michael in Seattle, Washington. Hi, Michael. Michael, welcome to the show.

[Caller]

Hi. Thanks for taking my call.

[Rachel Cruze]

Absolutely. How can we help today?

[Caller]

My question Is we are expecting our firstborn in March next year.

[Rachel Cruze]

Aw, Congratulations.

[Caller]

Thank you. And my question is, am I able to afford or is it wise for me to stay home with the baby?

[Jade Warshaw]

Well, let's look at it from. Are we talking obviously a financial perspective. So does your. Your wife work?

[Caller]

Yes.

[Jade Warshaw]

What does she do and what does she Earn?

[Caller]

She's an HR manager and she earns 170.

[Jade Warshaw]

Okay. And what. What do you do today, and what are you earning today?

[Caller]

I'm an engineer, and I make 1:35.

[Jade Warshaw]

Okay. Do you guys have debt?

[Caller]

We have some debt on a rental property and that's it. Oh, and. Or mortgage.

[Jade Warshaw]

Okay. So if you were. So you have some debt on the rental and then your mortgage. What's your mortgage worth?

[Caller]

The. The note, it has 450 left, and the house is worth 585.

[Rachel Cruze]

Okay.

[Jade Warshaw]

What about the rental? I'm just curious.

[Caller]

Rentals. 225 worth 225 left on the note is 150.

[Jade Warshaw]

Okay. Okay. Okay. You know, if you. If you were to have crunched the numbers and said, okay, like, we can do. Do you have three to six months of expenses?

[Additional Caller/Guest]

We do.

[Caller]

We have about 30k.

[Jade Warshaw]

Love it.

[Caller]

In. Yeah. And set aside.

[Jade Warshaw]

I mean, yeah, if you crunch the numbers and you're like, okay, we'd be going down substantially, but we can live off 170 and we can continue to do, you know, baby steps for. And, you know, I don't know how I feel about this rental. Maybe that's not the question for today, but if you can do it budget wise, there's really not a problem. Yeah.

[Rachel Cruze]

Have you all done a mock budget at 170 just to see, like, what she brings home every month? Do you guys comfortably live there? Can live on that?

[Caller]

We have not done a mock budget, but we can probably live off 170. And I know probably is not a good term.

[Jade Warshaw]

Yeah, you got to do real numbers.

[Caller]

Right.

[Jade Warshaw]

Because usually the home is the problem.

[Caller]

Problem was. Yes, that was my primary question is, can we afford the house? Is this advisable? Should we pay down the mortgage?

[Rachel Cruze]

How much is her paycheck a month? How much is her paycheck a month?

[Caller]

Now it's like maybe 6,000, but that's got some investing taken out of it and other things.

[Jade Warshaw]

That's fine because you are in baby step four. So that. That would have to. The investing would have to stay taking. Taken out of it. But how much is your mortgage?

[Caller]

Mortgage is 4,600.

[Rachel Cruze]

Ooh, 4,600.

[Jade Warshaw]

Impossible.

[Rachel Cruze]

Yeah, that's you know, that's almost. I mean, that's. Well, yeah. Then you guys. You can't live off 1500, can you, a month? Because if she brings home 6000.

[Jade Warshaw]

No, you can't. I'm going to answer it for you and your mortgage.

[Rachel Cruze]

Right, Michael? But for real, like, that's. That's not right. Right. You can't live off that.

[Caller]

Yeah, she. She must bring home more than that. I'm sorry. I'm getting my numbers mixed up.

[Jade Warshaw]

Okay, well, that's. It's important to do that budget. And I also want you to consider.

[Rachel Cruze]

Yeah, she makes 170. She's not bringing home 6,000.

[Caller]

Yeah, no, she. It's more after. Even after.

[Rachel Cruze]

After tax and everything.

[Jade Warshaw]

Everything.

[Caller]

More. Yeah, it's more like 10,000.

[Rachel Cruze]

Okay. That would make more sense.

[Jade Warshaw]

And then you said that she is. Do you know what percentage is going towards investing.

[Caller]

Yeah. 30.

[Jade Warshaw]

Okay. So that could come back down. So you'd have some extra money there. So that's looking better. But I also. You have to consider this rental. And I would probably say if you do this, that you might have to sell the rental, because if for some reason you don't have renters and you're on the hook for that mortgage for a time, that's gonna put you up a creek. Do you agree?

[Caller]

Yeah, yeah, absolutely. Yeah.

[Rachel Cruze]

And that'll give you a $70,000 cushion, too, with the equity, which is just nice during this time.

[Jade Warshaw]

Yeah. Because do you. Are you really making anything off the rental or are you just kind of breaking even?

[Caller]

Breaking even?

[Jade Warshaw]

Yeah. I'd sell it immediately and keep that cushion.

[Rachel Cruze]

I'm just curious, Michael, what caused you to be the one to stay home and not her? I know she's making. I mean, yeah, she makes 35 more than you do, but I don't know, is that Was that a. Was it a career decision?

[Caller]

She loves her job, and after the baby, she definitely wants to continue on with her career. Yeah, I like my job, but don't love it, if that makes sense.

[Rachel Cruze]

Okay.

[Jade Warshaw]

Yeah. Yeah.

[Caller]

And, yeah, I'm just wondering if I can stay home with the kid, because I feel like I would be a better dad than I am an employee.

[Jade Warshaw]

I love it.

[Rachel Cruze]

It's great. Okay, perfect. Well.

[Caller]

And if we sell the rental, what. What should we throw that equity to?

[Jade Warshaw]

Technically, it go at this stage, it's go towards your mortgage. That's where you're at in the baby steps. I mean, once you guys are doing 15% and you're putting a little extra for the kids, college. Right. 529. Once the baby is born, then any extra money would go towards the mortgage and you really wouldn't do any investing on top of the 15.15percent until after the mortgage is paid.

[Rachel Cruze]

So.

[Jade Warshaw]

Yeah, I mean right now if you're, let's see, you're at 30,000 saved. Yeah. I mean that's good. If you wanted to. Is that a full six months? Like full budget? Six months?

[Rachel Cruze]

Yeah.

[Jade Warshaw]

Expenses.

[Caller]

That's just our cash aside, not our other assets.

[Jade Warshaw]

So if you said she's bringing home 10 grand, that feels like three months of savings. I'd probably beef that up to six. If you wanted like a, like a robust three to six months since only one person's working and then. Yeah, the rest of it, you could put it towards the house. That's what I do.

[Caller]

Okay, so pay down the mortgage as fast you can and tighten up the budget.

[Rachel Cruze]

Yeah.

[Caller]

And it would be okay.

[Rachel Cruze]

Yeah, I think that's great. Yeah. I mean the numbers aren't crazy. I mean the mortgage, 4,600 going to 10,000 is like a little bit like a. Oh, but I mean, if that's what you guys are choosing, then, right. I mean it's close to, it's really high. I mean, 40, 45%.

[Jade Warshaw]

Let's, let's give you some clarity because you said you still have to do digging on the numbers. If you get the numbers and it's over 30%, you got problems. Like 30 is like.

[Rachel Cruze]

And that includes back her 50, her match, like her, her retirement and all of that. Right. That's added back into the salary. So don't take that out. Add, add the retirement back in. That gives you a bit little, a little bit buffer health insurance, you can buffer back in, you know, so some of this is like, this is just after tax. It's not after health insurance and retirement. So add those numbers back into her salary and if the mortgage is more than 30% of what she's bringing home, that gives us pause.

[Jade Warshaw]

Yeah, 25% is the rule. But you can make it work on 30, but it just know it's going to be tighter. That's why we said that. But that's what you're getting to. If you're getting Upwards, Michael, of 35, 40, you have to just say no, at least for a season until you can, I don't know, get maybe get this house paid off. Or maybe it's you working part time and closing that gap on the mortgage and, you know, working it out like that.

[Rachel Cruze]

Yep, for sure. No, it's a good question. I think that's always a hard dynamic, Jay, that we get a lot of people wanting to go down to one income, usually because of a family and they've set their lifestyle as a two income lifestyle. And yeah, you take one away, the mortgage suddenly is a larger part of your percentage and all this stuff. That's one reason the rule of thumb of living below your means in general is a great idea.

[Jade Warshaw]

That's right.

[Rachel Cruze]

Because when you overextend yourself even beyond two salaries. Right. You're going into debt and all of this then pulling back is that much harder. So. And if the bank, if you go to buy a house, you guys, the bank is going to offer you a lot more money.

[Jade Warshaw]

That's right.

[Rachel Cruze]

Than what you need to take. And so you really do want to be more conservative on these numbers so that it gives you options and choices. Yeah. And if you know you want to be starting a family soon and one of you wants to stay home and you're looking to buy a house, remember this. Right. Like don't build your life around two incomes if you know that it's probably not going to be two incomes for the next couple years. But all that's really, it's really hard though. And then to do a mock budget because we get this question a lot. If they can be a stay at home parent.

[Jade Warshaw]

Yeah. Run the numbers for real and live.

[Rachel Cruze]

It out if you, if you have the opportunity and the time to try it. Yeah. Live one month with the budget. That would be. And see how it all feels. Because sometimes people go down to one income thing. It's going to bring peace and it actually brings more stress. And for a season, you know, work to get out of debt and put yourself in a better financial situation and then come back home and there's more margin and more peace and more enjoyment. So yeah, a lot of different ways to look at it and a values conversation too of what you want for your family for sure. But also we got to be adults and make the math work.

[Host/Announcer]

How many times do you end up with too much month at the end of day? The money, even if you can cover the bills, there's nothing left over. You work your butt off and you still feel broke. That's normal for most people. But you do not have to live that way. You can completely transform your money and your life with every dollar. Our world class budgeting app is better than ever now. Every dollar coaches you to find extra margin every month so you can make real progress and change your family. The Average person finds $3,015 in just the first 15 minutes. That's extra money you could use to beat debt, to build wealth, to finally breathe again. Don't settle for living normal with money. Start every dollar for free by downloading the.

[Rachel Cruze]

Our scripture today comes from Isaiah 54:10. Though the mountains be shaken and the hills be removed, yet my unfailing love for you will not be shaken, nor my covenant of peace be removed, says the Lord, who has compassion on. On you. The singer Pink. We got Pink. We got. We got the Book of Isaiah and the singer Pink.

[Jade Warshaw]

Love it.

[Rachel Cruze]

Pink said you can't move mountains by whispering at them.

[Jade Warshaw]

Okay, Pink.

[Rachel Cruze]

All right. I guess that's true. Guess we just be a little more aggressive towards those mountains.

[Jade Warshaw]

Maybe, I don't know. Also a mustard seed, I thought.

[Rachel Cruze]

But conflicting with Pink, Bible Pink, you're. I don't know. We don't know where we get our clothes. We just, we take them. Listen, we take.

[Jade Warshaw]

She's a fabulous singer. Yeah, Give her that.

[Rachel Cruze]

And a great. She dances, she does all the, like, aerial trips.

[Jade Warshaw]

We'll give her that. Not quotes.

[Rachel Cruze]

All right, let's go to Tracy in California. Hi, Tracy. Welcome to the show.

[Caller]

Hi.

[Additional Caller/Guest]

Thank you so much for taking my call.

[Rachel Cruze]

You are welcome. How can we help today?

[Additional Caller/Guest]

I left teaching. I was an elementary school teacher several years ago. And now it's time for me to go ahead and apply for my pension. And I have a couple of options that are quite different. And I wondered if you could help me decide.

[Rachel Cruze]

All right. What are your options?

[Additional Caller/Guest]

Well, I can retire now at 60 on my application, and I will go forward with a monthly pension of about $1,700 a month. Or I could back date to age 55 and that would lower my monthly to 1135. But I would get about $73,000 to cash out about 50 grand after taxes.

[Rachel Cruze]

50 grand in addition to the 1100 that you'll get monthly?

[Additional Caller/Guest]

Yeah, that'll still go forward.

[Rachel Cruze]

Okay. What other retirement do you have saved?

[Additional Caller/Guest]

And so my husband and I are debt free thanks to the Ramsey plan, you guys. Yeah. And so I have about 360 in retirement investments.

[Rachel Cruze]

Okay.

[Additional Caller/Guest]

And his, his accounts have about 500,000 in retirement investments.

[Rachel Cruze]

Good for you guys.

[Additional Caller/Guest]

And then he will get, he will get his pension. That'll be about 7,800amonth plus Social Security and Medicare.

[Jade Warshaw]

So.

[Additional Caller/Guest]

Yeah, well, medical and then Medicare Sunday.

[Jade Warshaw]

But what's that amount too? Yeah.

[Rachel Cruze]

So 78 total for him.

[Jade Warshaw]

Yeah, that was including his Social Security and everything.

[Additional Caller/Guest]

No, Social Security will be on top of that.

[Jade Warshaw]

And how much will that be?

[Additional Caller/Guest]

We're guessing not much. We're guessing probably 3,000 smo. 3,000 cert. And you'll.

[Jade Warshaw]

You have some Social Security as well?

[Additional Caller/Guest]

No, I will not. I didn't qualify for that.

[Jade Warshaw]

Okay, that's 10,800. What's your once. Your. What's your monthly budget? What's it take to operate your lifestyle?

[Additional Caller/Guest]

Yeah, well, we live in a very expensive part of California, so right now with pets, etcetera, we're probably at about nine.

[Rachel Cruze]

Okay.

[Jade Warshaw]

Okay. So if you had it, his is 10,800. It takes nine to operate the budget. And that's not you ever touching a nest egg. And then if you had the 1700, would that be more than enough? Well, because I'm almost wondering. This 50,000 could be helpful for you as a nest egg. And if you can get by on the.

[Rachel Cruze]

I probably would take the lower payment, but getting the lump sum of the 50 because then you get to invest it, Tracy. Right. With a pension, you don't have a lot of control over where they're investing it. So if you get this 50,000, you guys could put that in a great index fund or something, you know what I mean? And you don't. You may not even have to touch a lot of this retirement just because of his pension and yours. But if you need to, that's why it's all there. But if you got that 50,000, you guys are in the upwards of, you know, a little over $900,000 on your own, which is incredible. And with your house and everything. I mean. Yeah. You guys are baby steps millionaires. Tracy, you're exactly what we talk about. I mean, you're a teacher. I mean, it's just. It's phenomenal. So I almost would want more control over the pension and the amount or. Sorry.

[Jade Warshaw]

I would.

[Rachel Cruze]

I want control. If. So, I would want it as soon as possible so that I can turn around and invest it in something that I know, you know, I'm pretty guaranteed of what I'm putting the money into. The pension. You don't really have a lot of control over that. So I would. I would opt for the latter. Getting 1100 with the lump sum of. Of what? It'll be 75, but 50 after taxes.

[Jade Warshaw]

Yeah. This. The extra 700 is incidental for you, I think.

[Additional Caller/Guest]

Okay. Yeah. I just. I guess we. I didn't consider investing because we already had money put away. So, you know, I didn't know that that's what we should do with it. And I was afraid that if it comes to us, it'll be gone. You know, whereas the larger monthly pension would continue for my life.

[Jade Warshaw]

Well, I think it's the opposite. I think that $700, if you add it to your monthly budget, it's going to get piddled away on dog food and other things. But the 50,000, I mean, if you turn around in the moment, you get it. If you invest it and put it with your other nest egg, that's going to go to work for you in far greater ways than that $700. Because you weren't going to invest that $700 a month. You were going to likely spend it on lifestyle. Right. And you said that your lifestyle ticks right now on 9000. So with your husband's pension, his Social Security, plus your thousand dollars, you're already at 11,800amonth, which is basically more than what you have now.

[Rachel Cruze]

And that's not touching. Touching your retirement. And you guys have other savings, right? Just. Do you have other savings that's just like an emergency fund on the side?

[Additional Caller/Guest]

Yes.

[Rachel Cruze]

Perfect. Yeah. Tracy, you guys are doing. Yeah, you're doing great. Either way, you're gonna be fine. So just hear me say that if it just. If that just keeps you up tonight, then choose the first one. You know, either way, totally fine. But if it were Jade and myself, this is. This is what I would choose. All right, let's go to Olivia in Wisconsin. Hi, Olivia. Welcome to the show.

[Additional Caller/Guest]

Hi, how are you?

[Rachel Cruze]

We're doing great. How can we help?

[Additional Caller/Guest]

I was kind of wondering if I should be paying off my student loans while I'm still in college or if I should keep taking them out and wait until afterwards.

[Rachel Cruze]

What would you be paying them off with? Do you have income?

[Additional Caller/Guest]

Just other side income. Money? Both my fiance and I work part time.

[Rachel Cruze]

Okay. So if it were me, I would be safe saving to cash flow as much as you can for the remaining college and not take out any more loans and see. Okay, what do we have to cash flow to not go deeper in debt. And then once you graduate, you'll have six months until those payments start hitting. And then you guys can tackle that debt or you tackle. It's your fiance, but I know you guys probably will be getting married. How much do you have in student loan debt?

[Additional Caller/Guest]

I have about 10,000 and he has about 20.

[Rachel Cruze]

Okay, he has 20. You have of 10. And how much. How much do you have left in school? How much time?

[Additional Caller/Guest]

We both have like two and a.

[Caller]

Half years left still.

[Rachel Cruze]

Okay.

[Jade Warshaw]

And what's it. What's it cost per semester?

[Additional Caller/Guest]

Per semester. For me it's about five with like financial aid and whatnot. And for him it averages about 10.

[Jade Warshaw]

Okay. Yeah. So I'd be focused, like Rachel said, on how can I cash cash flow this every single semester so I'm not.

[Rachel Cruze]

Going further into debt and cash flowing my portion. You guys don't need to be paying on each other's tuition until you are married. So that is a, that's a call we get, Olivia, where they're like, I have $30,000, but I helped my fiance get through school and we never ended up marrying, you know, so. So I would be separating these. So whatever work you're doing goes towards your tuition. Whatever work he's doing goes to his. And then once you guys get married, do you all have a date set?

[Additional Caller/Guest]

Yeah, it'll be May of next year.

[Jade Warshaw]

Beautiful.

[Rachel Cruze]

So after May, then you guys can combine everything. Are you guys making enough to. To live off of being full time students?

[Additional Caller/Guest]

Yeah, we make. Yeah, we get. We take out extra loans for that too, as well. So we make about 3,000amonth.

[Jade Warshaw]

Wait a minute. That's not made money if you're taking loans for it.

[Rachel Cruze]

We want to stop that. Do not take loans to be living off of. You guys need to be cash flowing your lives. And if that means pausing school for a little bit, then we may need to do that. But we're not. We don't need to go deeper in debt for lifestyle. So you either need to find and be working more or just.

[Jade Warshaw]

Yep.

[Rachel Cruze]

Pump the brakes on the, on the tuition because you guys may not be able to afford it right now. Thanks for the call, Olivia. Well, Jade, great show so far. Always fun. Thanks to all the guys in the booth. And remember, there's ultimately only one way to finance your peace, and that's to walk daily with the prince of peace Christ Jesus.