Personal Finance Means Balancing Intensity With Intentionality

Summary

Podcast Summary: "Personal Finance Means Balancing Intensity With Intentionality" – The Ramsey Show

Podcast Information:

• Title: The Ramsey Show
• Host/Author: Ramsey Network
• Episode: Personal Finance Means Balancing Intensity With Intentionality
• Description: The Ramsey Show empowers listeners to build wealth and take control of their lives, regardless of past financial missteps. Hosted by John Deloney and Jade Warshaw, the show features expert advice on overcoming financial obstacles, fostering healthy relationships, and improving mental and emotional well-being.

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Introduction

In the episode titled "Personal Finance Means Balancing Intensity With Intentionality," hosts John Deloney and Jade Warshaw delve into the nuanced balance between maintaining financial discipline and allowing oneself to enjoy the fruits of financial success. Set against the backdrop of the night before a pivotal election, the discussion intertwines personal finance strategies with the emotional and relational aspects of wealth management.

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Key Themes

1. Post-Debt Financial Management:

   • Achieving debt freedom is a significant milestone, but it often leads to unexpected psychological challenges. Listeners are guided on how to navigate life after paying off major debts, such as a mortgage.

2. Balancing Financial Discipline with Enjoyment:

   • The concept of balancing "intensity" (strict financial discipline) with "intentionality" (purposeful and satisfying spending) is explored as a sustainable approach to wealth management.

3. Emotional and Relational Impacts of Financial Decisions:

   • The episode highlights how financial decisions impact mental health and relationships, emphasizing the need for intentional planning to maintain emotional well-being.

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Caller Discussions

1. Chris from Indianapolis [01:40]

Issue:

• At 41, Chris has successfully paid off his mortgage and achieved debt-free status. However, he grapples with a sense of emptiness and uncertainty about his next financial steps, worrying that excess money feels unfulfilling.

Discussion:

• John Deloney: "Money. Having excess money absolutely sucks if you have no one to share it with." [03:22]
• The conversation addresses the "tyranny of accomplishing all your dreams," where reaching financial milestones doesn't necessarily translate to personal fulfillment.
• Solution: Implementing a balanced budget that allocates funds for personal enjoyment and social activities, ensuring that financial success enhances rather than detracts from quality of life.

Conclusion:

• Chris is encouraged to create a budget line for discretionary spending and to actively seek social interactions, reinforcing that financial freedom should enhance personal happiness and relationships.

2. Matt from Chicago [11:28]

Issue:

• Matt has recently paid off significant debt and is preparing for retirement steps. He seeks advice on the placement of a backdoor Roth IRA in his investment strategy, considering taxes and long-term benefits.

Discussion:

• Jade Warshaw: "Backdoor Roth falls into the same category [as match Roth traditional]." [12:26]
• The dialogue emphasizes prioritizing retirement accounts that offer employer matches, followed by Roth and traditional options, and finally, backdoor Roth strategies.
• Advice: Matt is advised to continue utilizing matched retirement accounts before exploring backdoor Roth IRAs, ensuring tax-efficient growth while maximizing employer benefits.

Conclusion:

• Affirmation that Matt's approach aligns with recommended investment strategies, reinforcing the importance of structured retirement planning.

3. Zachary from New Orleans [14:07]

Issue:

• Zachary is actively paying an extra $500 monthly towards his mortgage but struggles with determining whether to accelerate his mortgage payoff or allocate funds towards enjoying life.

Discussion:

• John Deloney: "Nothing good you're going to accomplish isn't awkward at first." [06:44]
• The hosts share personal anecdotes about balancing financial goals with personal enjoyment after years of intense financial discipline.
• Jade Warshaw: Emphasizes the importance of intentionality, encouraging Zachary to assess his family's values and decide how much he wants to allocate towards enjoying life versus accelerating debt repayment.

Conclusion:

• Zachary is advised to maintain his extra mortgage payments while also setting aside funds for meaningful experiences, ensuring a balanced and fulfilling financial life.

4. Susanna from Atlanta [53:45]

Issue:

• At 59, Susanna is navigating a divorce after 37 years of marriage, during which she was a stay-at-home mom. She seeks advice on managing assets, handling the division of property, and ensuring financial stability post-divorce.

Discussion:

• John Deloney: Highlights the importance of viewing divorce as a business transaction, advising Susanna to rely on her attorney and focus on equitable asset division.
• Jade Warshaw: Encourages Susanna to tap into her savings to eliminate debts and secure financial independence, reinforcing her value and contributions despite years as a stay-at-home parent.
• Advice: Susanna is urged to consider selling shared assets, such as the house, and ensuring that her retirement funds and inheritance are appropriately divided to support her future.

Conclusion:

• Susanna receives empathetic guidance to prioritize her financial well-being and emotional health, reassuring her that her efforts to achieve financial stability will pay off in her post-divorce life.

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Insights and Conclusions

• Intentional Financial Planning: The episode underscores the necessity of intentionality in financial planning. Beyond merely eliminating debt, individuals must thoughtfully allocate their resources to sustain personal happiness and foster meaningful relationships.

• Balancing Discipline with Enjoyment: Achieving financial goals requires discipline, but without intentional spending that aligns with personal values and desires, such discipline can lead to dissatisfaction. The hosts advocate for a balanced approach that allows for both saving and enjoying life.

• Emotional Well-Being and Money: Financial decisions are deeply intertwined with emotional health. Proper planning and intentionality in spending can alleviate anxiety and enhance overall well-being.

• Relational Components of Money: Money is not just a tool for financial security; it plays a significant role in relationships and personal fulfillment. By sharing resources and spending thoughtfully, individuals can strengthen their connections and find greater satisfaction in their financial success.

• Empowerment Through Financial Control: Taking control of one's finances empowers individuals to lead lives that reflect their values and aspirations. This empowerment is essential for long-term happiness and stability.

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Notable Quotes

• John Deloney: "Money. Having excess money absolutely sucks if you have no one to share it with." [03:22]

• John Deloney: "Nothing good you're going to accomplish isn't awkward at first." [06:44]

• Jade Warshaw: "Money is supposed to be relational. And when you take that part out of it, it kind of is like, why did I do all this? What was it all for?" [07:54]

• John Deloney: "Intentionality is that magic word." [18:26]

• Jade Warshaw: "We need somebody who's going to set you straight, and you need good people who are older than you, who have lived more life than you to set you straight." [73:22]

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Conclusion

"Personal Finance Means Balancing Intensity With Intentionality" offers listeners profound insights into managing finances beyond debt elimination. By emphasizing the importance of intentional spending and maintaining meaningful relationships, the hosts provide a comprehensive roadmap for achieving not just financial success but also personal fulfillment and emotional well-being. Through real-life caller scenarios and expert advice, the episode serves as a valuable guide for anyone seeking to harmonize financial discipline with a fulfilling life.

Transcript

[Jade Warshaw]

Hey, guys, this Christmas, we're giving away cash. So enter the Ramsey $5,000 Christmas cash giveaway. For your chance to win big this holiday season, go to Ramsaysolutions.com giveaway to enter. Now.

[John Deloney]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, get out of debt, do work that they love, and have actual amazing relationships. I'm John Deloney, joined by my good friend Jade Warshaw on the night before the election.

[Jade Warshaw]

Oh, I'm gonna have popcorn. I'm gonna have drinks. I'm treating it like it's a whole event.

[John Deloney]

I'm going to the woods, and we are turning off the Internet. I'm gonna put my hands and feet in things that are real, like dirt and leaves.

[Jade Warshaw]

I mean, here's why I'm treating it like entertainment, because regardless of what happens, I'm going on with life and I'm going to do the things that I know to do, and I'm going to love my family and I'm going to go to work.

[John Deloney]

Like Jade, I don't think you've been spending enough time in the news because depending on what happens, America is either going to make it or it's over.

[Jade Warshaw]

That's what they tell us.

[John Deloney]

It's over. So, alas, now I'm with you.

[Jade Warshaw]

Yeah. I'll throw some popcorn to you out in the woods so you have, you know, the way back.

[John Deloney]

That's. Hey, we'll need that. Taking your calls live. 38-825-5225. Triple 8-825-5225. Let's roll out to Indianapolis, Indiana, and talk to Chris. What up, Chris?

[Chris]

Hey, Ramsey family, how are you?

[John Deloney]

We're good. What's up, man?

[Chris]

Hey. I'm blessed. I'm good. I'm fortunate to be where I'm at, and I'm just kind of struggling with step seven a little bit where I feel like I've been able to pay off my house. I'm 41 years old, and I'm at a place where I can start doing some good stuff for me and for everybody around me. I'm struggling with that, and I don't exactly know how to do that, where I just keep hiding my money away. And I, it's. It's going into the stock market, and I don't know how to compartmentalize that.

[John Deloney]

In counseling, we call this the tyranny of accomplishing all your dreams. Because here's what. Here's what you probably found out. You cross this finish line and you don't owe anybody any money. Right.

[Chris]

I'm debt free.

[John Deloney]

You cross this finish line, and you are, quote unquote, a millionaire. Right?

[Chris]

Yeah.

[John Deloney]

Close enough. And now every time you walk by the mirror, you're still you. Fair.

[Chris]

Yeah. Yeah. We're over expecting and underachieving.

[John Deloney]

Well, it's not even. It's not even over expecting or underachieving. You're doing both. You've. You've achieved, you've expected, and you've achieved. It's that you thought this was going to feel different, didn't you? You thought somehow it would fix you from the inside out.

[Chris]

Right?

[John Deloney]

So what is it about Chris's life that you've set up that you don't love?

[Chris]

I'm a little bit of a hermit, and I just feel like I don't know exactly how to be good to myself or other people at this point where I'm able to have a little bit of free income to. To do some good. And I'm like, well, where does that go? That's just a big question mark for me.

[John Deloney]

Money. Having excess money absolutely sucks if you have no one to share it with.

[Jade Warshaw]

Well, I was going to ask, what was the purpose for you when you. I mean, you're on baby step seven. That's no easy accomplishment. What led you to do all of that in the first place?

[Chris]

It was just kind of ingrained in me. My parents were really good about coaching me, and it was just. It was ingrained in me to save every little bit that I could and to work hard.

[Jade Warshaw]

And so it was just you following directions. There wasn't really a. A deeper meaning for you?

[Chris]

I think so. And I'm like, I'm gonna have a midlife crisis.

[John Deloney]

How old are you?

[Chris]

I'm 41.

[John Deloney]

You're 21? I'm 41.

[Matt]

41.

[John Deloney]

Sorry. Jesus. 21. You're gonna change the game on me. Are you married?

[Chris]

No.

[John Deloney]

No. Do you want to be?

[Chris]

Someday.

[John Deloney]

Okay. So what does fun look like, man? What does joy look like? What does giving look like for you these days?

[Chris]

It's like being able to loosen the belt a little bit. And I don't feel like I'm allowed. Like, I've been through so much of that where I'm just like, keep it tight.

[John Deloney]

And whose voice is that, Chris?

[Chris]

Probably my own.

[John Deloney]

Most of us now. Most of us have voices that are in our heads that we don't challenge. And it's important to every once in a while to stop and say, wait a minute, I'm having some gummy bears. Who's who's saying I'm a piece of crap, right? Am I making a healthy choice? No, but am I a terrible. Like where does that voice coming from? Whose voice is that, Chris, that says there's always something bad around the next corner? Who's saying that? Is it the news? Is it your mom? Is it politicians? Is it an old coach of yours? Somebody has ingrained and is continuing to sit on your shoulder and pump information into your head that says if you spend this money, do you know what's going to happen next? Do you know? Do you know? Do you know? Do you know what's going to happen next? Whose voices?

[Chris]

I don't even know.

[Jade Warshaw]

I'd spend some time with that because John is teaching right now. I would really sit down and spend some time with that because he's not wrong.

[John Deloney]

Here's what, here's what most people who have a scarcity mindset and this is going to sound ridiculous to the rest of the world and I don't care. Chris, you want, you want to path out of this for real? Are you being serious about your question?

[Chris]

Yeah.

[John Deloney]

All right. You're going to have to put a budget line in. Money I will spend on myself, money I will take myself out to eat with and most importantly, money I will invest in taking with doing stuff with other people.

[Chris]

Yeah.

[John Deloney]

Now I am a fellow prepper. I'm a fellow scarcity minded guy. Okay? I grew up, money was scarce. It was tough to come by. It was a lot of tension in my house that is in my nervous system. So one of the rules I have when I buy a concert, I could go to concerts by myself all day long. And I know it's not good for me and it's not fun, but I do it anyway. So now when I buy a concert ticket, I buy two nice. Or I buy four A because I've been blessed and I want friends to go with me and have. And if they can't afford it, who cares? I want to take a group of guys. I want to go have a blast. Right? See what I'm saying? So you have to put that in your budget and you have to hold yourself accountable the same way you held yourself accountable to getting out of debt. It's the same level of discipline and the same awkwardness.

[Chris]

Because that's a big part of it is that it all feels kind of awkward at this point where I'm like, well, now what?

[John Deloney]

Nothing good. Nothing good you're going to accomplish isn't awkward at first. Should go back and listen to the Very first time I answered a call on this show, it like redefines awkward, homie. It was so bad.

[Jade Warshaw]

True for all of us.

[John Deloney]

By the way, James sent an email, was like, fire him now. Fire him now.

[Jade Warshaw]

He still sends that email every week.

[John Deloney]

Still sends that email a lot. Do you have a couple of guys in Indianapolis you can. You can start meeting with once a week?

[Chris]

Monthly.

[John Deloney]

Monthly, yeah.

[Chris]

Like, I'll work on that weekly. Yeah. I like that.

[John Deloney]

That's my challenge to you. My challenge to you is to find a group of guys that you can start doing life with. And by the way, most romantic relationships come from one or two places. You run into somebody at work or you run into somebody that your buddy says, hey, you need to meet my friend so and so. Or my friend's friend so and so. A lot of it comes on the Internets, too, that don't do that. Meet people in real life, hang out with your buddies. Will you make that commitment?

[Chris]

Yes.

[John Deloney]

Jade, what am I missing here?

[Jade Warshaw]

I don't think you're missing anything. I think the key here is money is supposed to be relational. And when you X that part out of it, it kind of is like, why did I do all this? What was it all for? And so I think that's the part that's missing. Most of us have some sort of relational connection to our money and why we spend the way we spend and why we develop the habits that we develop. And it was kind of interesting because when you were talking about it, it really just sounded like someone told me to do this, so I just went out and did it. And you never found your personal and relational connection to what it is and why you're doing it. But John just laid out a beautiful plan for you, and I love that.

[John Deloney]

Here's what. Here's what stinks about my life. Statistically speaking, Maybe I got 45 years left. Maybe.

[Jade Warshaw]

Oh, gosh, John, this is getting dark. Yes.

[John Deloney]

But listen, I got about 45 years left, and money's going to allow me to stay alive and to be super generous and to have some great memories.

[Jade Warshaw]

That's right. That's right.

[John Deloney]

And after that, I'll be gone. Right. And so what are we actually going to do with this stuff? We're going to serve each other. We're going to take care of our neighbors, and we're going to have a lot of laughs.

[Jade Warshaw]

Yeah. That's why it says where your money is, your heart is also. It's a relational component.

[John Deloney]

This is the Ramsey show. We'll be right back.

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[John Deloney]

Welcome back to the Ramsey Show. 888-825-5225, ticking your calls live. Guess what? Christmas will be here before you know it. Yeah, and that means Ramsey has some epic Christmas deals happening right now. If you're looking for something to bring your family closer together this season, we've got you covered. Some of our most popular questions for humans decks are now just 12 bucks. These are good for sitting around at the holiday season, putting your screens down and not just staring off into space or talking about politics or whatever.

[Jade Warshaw]

Please never that.

[John Deloney]

Listen, questions for humans decks are just 12 bucks. The limited edition holiday decks for Thanksgiving, Christmas and New Year's, they always sell out. They're back. Jade's book Money's not a math Problem is also on sale now. It's you can get it for 12 bucks. Listen, buy gifts that actually help people this year, not gifts that are going to end up either in the trash or in just some some back closet pile that someone's got to get rid of someday. These deals are a great way to stay on budget while getting giving gifts that can make a real difference. Go to ramseysolutions.com store and if you're listening on YouTube or the podcast, you can click the link in the description. Check them out. All right, let's go out to Chi Town and talk to Matt. What up, Matt? How we doing Man.

[Matt]

Hi. It's an honor to talk to you, Jaden. John.

[John Deloney]

It's an honor to talk to you, man. What's up?

[Matt]

Thanks to y'all teaching, we're wrapping up baby step three, getting ready for four, five, six. Yeah, yeah, yeah.

[Jade Warshaw]

Sorry.

[Matt]

Paid off 192k day. 192k in debt. We have 410 on our mortgage. Nice. Our household income is 300k, 200 of which is from my job and 100 of which is from my wife's.

[John Deloney]

Wait, slow down. You'll just blow by that.

[Jade Warshaw]

I know that's lots of dollars.

[John Deloney]

What do you do for a living?

[Matt]

I'm a software engineer and my wife is an amazing nurse.

[Jade Warshaw]

Wow. You're debt free. 192,000 you paid off. How long did that take?

[Matt]

We started in March of this year. 128 was an RV that we learned we didn't need.

[Jade Warshaw]

Okay. Okay.

[John Deloney]

Wow.

[Jade Warshaw]

Wow. Congratulations. I'm happy for you. This is good.

[Matt]

Thank you so much. Okay, so as we get ready to turn retirement back on, we want to know where the backdoor Roth falls into this. We've heard it's match Roth traditional. We've also heard to match out traditionals.

[Jade Warshaw]

In 456, so it falls in the same category. You're right. Match beats Roth, beats traditional. So if you have a match with your traditional 401k, you would start there. If you had a Roth 401k, you could start there. Which one is yours?

[Matt]

We both have a match. We just weren't sure if the back door fell into the same order because of the taxes that we'd have to pay to open like the post tax and convert. So it would be slightly over the 15%. So just double checking that it was still match backdoor Roth and then traditional.

[Jade Warshaw]

I would still do it that way. I do do it that way. Let me just put it like that.

[John Deloney]

Excellent.

[Jade Warshaw]

Does that answer your question?

[Matt]

It sure does, man.

[Jade Warshaw]

Congratulations. Ding ding.

[John Deloney]

Yeah.

[Matt]

Thank you all for that.

[Jade Warshaw]

You bet. Thanks for the call.

[John Deloney]

No, dude. Hey, listen, we talk a lot on a podcast or like on the YouTubes. You're the one actually grinding this out on a day to day basis, making a budget, looking at your spouse and y'all saying yes and no and we're in and we're not like you're the one making this thing work. I'm proud of you, dude. Hey, while I have you, can I ask you a quick question?

[Matt]

You bet.

[John Deloney]

That's totally unrelated to anything. Thumbs up or thumbs down on AI. Are we doomed or are we going to be all right? You're a software engineer, so you're the smartest guy I know on this topic.

[Matt]

Oh, man. I think we're going to be okay. I have no worries after finding the Ramsey, you know, plan, though. So either way, I'm going to be okay.

[John Deloney]

So if they take your job and you find yourself in a Illinois coin field or cornfield, you're going to be okay.

[Matt]

That's going to be a. Okay.

[John Deloney]

Dude, listen to that guy. See, James, we're going to be all right. It's all going to work out for us in the end. All right, let's go out to New Orleans, Louisiana, and talk to Zachary. What's up, Zachary?

[Zachary]

Hey, what's going on, guys? Thank you for taking my call.

[John Deloney]

You got it, dude. What's up?

[Zachary]

Just got a quick question about paying off my mortgage. I'm on baby steps 4, 5, and 6 right now, and I'm currently putting an extra $500 a month towards the mortgage. My wife and I bought it a house back in March of this year. We put 15 down on it and been putting 500 down every month since we started making payments. I'm just curious if I should be doing more.

[Jade Warshaw]

It depends on. It depends on if you want to. Listen, that 500 that you're doing extra every month is just busting your amortization schedule in the face like Mike Tyson. You're going to be done with this before you know it. And so at the end of the day, this is about you being intentional with your wife. You guys sitting down and saying, how much do we want to do? You know, you're at the point where you should enjoy some of the fruit of your labor a little bit. And I. I can't tell you what that number is, but you can sit down with your wife and decide. I like that you already have a regular kind of rhythm of how often that you pay. And at this point, it's about margin. How much margin do you want to put towards this and how much do you want to put towards living and enjoying your life?

[Zachary]

Well, I guess that's the problem that I'm having is finding that line between how much do I want to enjoy what we've accomplished versus how much, you know, how quickly do we want to pay down the house?

[Jade Warshaw]

Okay, then let me tell you a story, because the best way to think of this is just in context of your life. So for my husband, Sam and I, it took us seven and a half to ten years to do the first three Baby steps. Okay. And those are the most intense baby steps. So by the time we got to baby step six, we were like, yo, we've already spent a decade going hard in the paint, so we do less. Like, for us, that line is a lot less. It's like we're going to enjoy our life a little bit more. We're still being intentional over here, but we're not sweating to do this. So I like to ask people, listen, how long did it take you to do the first three baby steps? Because if it didn't take you long, if you had a windfall or you. So you sold something, fine. Yeah. If you want to go a little bit more intensely now, that's fine. But if you've already spent years with your head down, there is a part of that that I want you to take a breather and enjoy life. Does that make sense?

[Zachary]

Yeah, it does, because it took me probably about three to four years because I was starting a new career when I started the process. And so it just, over time, as I started to make more and more money through promotions and stuff, it took a while because I didn't have much margin to begin with. And so I guess now it's like a cash flow with cash flow, the wedding and the honeymoon.

[Jade Warshaw]

Yeah, good.

[Zachary]

All of that. So I guess now it's. It's finding that, you know, that happy middle ground of still being intentional enough but enjoying everything we've accomplished.

[Jade Warshaw]

Yeah. So after. Let's. Let's keep the $500 going after that. What would you say your margin is for. For fun money? Like, after you've done all the things that make you a financially responsible adult.

[Zachary]

So it ranges. I'm actually a Lyman with a local power company here, and so it just depends on the overtime. Some months it could be after everything's said and done, we've got a thousand to fifteen hundred. Sometimes it could be more.

[Jade Warshaw]

Okay, good. I think as long as you are. You guys are prioritizing your values as a family at this point. If you guys value getting away just you and your wife once a quarter, and you're doing that. If you value taking a nice family vacation every year, and you're doing that, I think as long as you're doing the things that you value as fun things, family things, memorable things, the. The things that feel you make you feel like what I'm doing, the time I'm spending on my work is worth it. Right. Because you want to feel like I'm working for something, and now it's worth it as Long as you're doing those things, if you have money above and beyond that. Yeah. Put it on the mortgage.

[Zachary]

Okay.

[Jade Warshaw]

Above and beyond the 500 is what I'm saying. Yeah.

[John Deloney]

Jay, let me say this. And Zach, this is to you too. So everybody listening. But those from those seasons, for me, have ebb and flowed.

[Jade Warshaw]

Yeah.

[John Deloney]

There's been seasons when I need to take a break, right? Yes.

[Jade Warshaw]

Yes.

[John Deloney]

And then there's been seasons when I wake up and I'm like, I can't leave anybody anything, and I re get insane again.

[Jade Warshaw]

Yes.

[John Deloney]

And for me, it's the same as yesterday. I was feeling extra stressy about the election stuff and all that. I was in Kroger, and I literally made this choice. I am going to feel bad tonight, and I'm going to buy a bunch of junk food right now. And so my rule of thumb is I don't ever want to fall off the wagon. But occasionally, I'll park the wagon, climb down and roll around in the mud, and then I'll climb back in. Right.

[Jade Warshaw]

I think we need that as human beings.

[John Deloney]

I think the key here is intentional. Like you and Sam, like, decade. We are intentionally going to slow this thing down and we'll live our lives now. Yes. And on the other side, for the. For me, I'm going to intentionally dump gas on this thing because I am losing sleep over it. I want it gone. Right. But I think intentionality is that magic word.

[Jade Warshaw]

You're exactly right. I think you're talking to everybody. That's such a relatable thing. There's that moment where that Terminator 2 red light turns on in my brain, and I'm like, we're dropping all the extra money on the mortgage. And then there's times where I'm like, I need new recliners. Like, I'm not playing this game right now. I need. Mama needs to live. Like, so. That is a very real thing when you're in baby steps four, five, and six. Just. It's okay. It doesn't have to be balls to the wall. You can chill out a little bit.

[John Deloney]

A little bit. This is the Ramsey Show. We'll be right back.

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[John Deloney]

Welcome back to the Ramsey Show. I'm John Deloney, joined by Jade Warshaw taking your calls on money and life and relationships and work, all of it. 888-820-55225. Let's go out to Dayton, Ohio, and talk to Kane. What's up, Kane?

[Matt]

Hey, how's it going?

[John Deloney]

Doing all right, man. How about you?

[Matt]

Pretty good. I got proposed a business offer to take over a business from an older gentleman who has no kids and wants to retire. I wouldn't have enough to put it all down, but I was just wondering what some calls would be of that.

[Jade Warshaw]

Okay. Were you working in the business before? How did you come across this offer?

[Matt]

I actually reached out to do some private work through Facebook. The guy also has some rentals and he needed some employees. And yes, I have got my EPA certifications for refrigeration, and I was a plumber for three years for a construction company.

[John Deloney]

So what's the business?

[Matt]

It's a H vac and plumbing business. Kind of a smaller town, but there's three of them collected together and there's quite a bit of work for that company.

[John Deloney]

Okay.

[Jade Warshaw]

Okay. How's it doing? I mean, have you looked at the numbers? And is it profitable? And if so, how well are they doing?

[Matt]

No, that's. That's kind of what I was. Another thing I wanted to get into. I hadn't went across that bridge completely. I'm gonna shadow them tomorrow and see how it's going. I just. If it is profitable, I did all this research. Maybe you can tell me if I researched it. Right. But roughly two to three times the business. Yearly profits is usually what a business like that would go for.

[Jade Warshaw]

Okay.

[Matt]

Being a smaller business.

[Jade Warshaw]

Yeah, you're right about that.

[John Deloney]

It's a net present value is what they call it.

[Matt]

Okay.

[John Deloney]

What I would not do is go down to a local bank and get a loan and buy this guy out, or I wouldn't go call the SBA and take out SBA loan and try to buy it.

[Jade Warshaw]

Yeah.

[Matt]

This guy said that the guy that he originally started from, they did it as a private deal. He put, I think he said, 20 grand down and skimmed the profits off to him.

[Jade Warshaw]

Yeah.

[Matt]

As payment until the business was paid for and then it was essentially his.

[Jade Warshaw]

That's. That's not a bad idea. If you just say, hey, I want to receive a salary from the business, but you're paying all the profits back to the seller until he receives the full amount. You could structure something like that because.

[John Deloney]

That way you're not in debt to him. You can and you will have made a salary for your work over X number of years. And let's say you have to walk away or the economy implodes, or whatever happens, you won't be stuck with a worthless business. And yet the bank is still calling the note on your loan.

[Matt]

Okay?

[John Deloney]

Do you get what I'm saying?

[Jade Warshaw]

This is also better for the seller because this is better for the seller because anybody who's going to come in with maybe cash or credit or some sort of investor is probably going to lowball them because they have debt on it. As opposed to you who's saying, hey, I value the business that you're in. Let's work together, keep the valuation that you have. Does that make sense?

[Matt]

Yeah, that makes perfect sense. And I just kind of wanted to make sure that I didn't go down the wrong rabbit hole of looking into this.

[John Deloney]

I'm going to make up completely, I'm going to completely fabricate numbers here. Okay? So don't use my math. Just kind of get the spirit of what I'm saying. Let's say after all expenses were paid, this business pay is sitting on $350,000 cash. End of every year. You've already done your depreciating assets, you put money aside, you've got all that stuff taken care of, you paid all your bills and you decide, I'm going to take them 100k a year as a salary, as the owner, as the president of this company, I'm going to pay him. And let's say we decided on a million dollar sale price. I'm going to give him $250,000 over four years. And at the year four, this will have, this will be signed over to me. I'll own the whole thing.

[Matt]

Okay?

[John Deloney]

That's different than going to a bank and saying I need a million dollar loan, 100% and I'm going to write him a million dollar check and then I'm going to hope that I make that back over the next four years.

[Matt]

Okay. And as well as hope the market doesn't crash in that particular business, it.

[John Deloney]

Let's say, let's, here's the worst case scenario for you and for him. Worst case scenario is the market crashes in two years. Nobody wants a plumber anymore.

[Jade Warshaw]

Yeah. Business, which by the way, if we're.

[John Deloney]

In that world, I don't want to be in that world. Right. I think we're always getting plumbers. Right. But let's pretend that happens and that happens. In two years, you will have made 100 grand a year as the president or CEO, whatever you want to call yourself of your, of this company. He will have made 250 grand a year. So he would have received $500,000.

[Matt]

Okay?

[John Deloney]

And that's under the made up numbers I'm just using. Then it all falls apart, it all goes away. And you, you come to him and you say, hey, I'm tearing this contract up. I'm walking away. And he says, I'm going to sue you. But he still has a half a million dollars that he has earned over two years. You have been paid for your wages. And there's not a bank saying, hey, I want my money back.

[Matt]

Right?

[John Deloney]

Do you get the difference? And now he may look at you and say, go jump in a lake. I'm not doing this. We're going to structure a dollar amount and you're going to owe me this dollar amount, Jade. And I would just tell you four years, five years, six years, who knows what the world's going to look like? That's another presidential election away. Let me put it that way. Who knows what the world's going to look like? So I would not invest. I would not put myself on the hook like that downstream.

[Matt]

Right, Right. And I, that kind of really solidifies my answer. I was leaning towards it, but I just, you know, I am doing the baby steps. I haven't particularly went through it, but I do have enough for six months wages and I am investing 11% retirement.

[Jade Warshaw]

What is the amount of the business? What is he selling it for?

[Matt]

Like I said, I hadn't quite gotten into that. Maybe I should have had that information before I called you guys, but I'm gonna job shadow him tomorrow and kind of after the day, you know, make sure that he is really a profitable.

[Jade Warshaw]

I wouldn't, not after the day. I would do this for a little while.

[John Deloney]

Yeah. How, how old are you, Kane?

[Matt]

I'm 22.

[John Deloney]

Okay, I'm going to say something and not at you. I'll say it with you. Okay.

[Matt]

Okay.

[John Deloney]

You're wandering into what I'd call adult land. Big boy, big girl land. Okay.

[Matt]

Okay.

[John Deloney]

And that's when you say things like, I need to see the last four years of your books or the last five years of your books. I need to see all the outstanding debts. I need to see any notes you have called and I'm going to have an accountant look over it all.

[Jade Warshaw]

And can I, can I can. I'm rolling the Canoe back for a minute. Everything that John said and everything that I've said about structuring this deal is accurate. I don't like this for you. I'm just gonna come out and say that because I, I want to go on record as saying for you at your age, I'd like you to get your feet wet starting your own business first before you just up and take on something that there's so many learning curves, I think in business. And I would love for you to learn those with lower stakes before you come in and learn them with high stakes where there's really a lot of money on the line. And there's a time frame. Yeah. And there's a time frame where you're having to kind of. Yeah, like if this is the salary that I'm paying back, I'm getting my salary, I'm paying him back. There is going to be a term to that and you are going to have to make good on that depending on how you structure it. So Mama Jade doesn't like this for you yet. I'm just going to say that.

[John Deloney]

So let me ask you, what do you think? What's the difference going to be between you running out and getting your own business?

[Matt]

The clientele market is pretty stiff. The reason why they're loyal to him, so to speak, is because he takes service calls. So if the furnace goes down at midnight, he will be there at midnight. And he's a one man show. So that's kind of how this business proposition came about.

[Jade Warshaw]

But the thing about it is at midnight, here's the thing, you can be amazing at your job. You can know H Vac very well, you can be good with customers. It doesn't mean you're good at running a business.

[John Deloney]

Yeah.

[Jade Warshaw]

And that's the part that I want you to learn on your own. First, are you, are you an organized person? Are you good with operations? Are you good with logistics? Are you good with handling, you know, all of those ins and out payroll? Like, are you good with that stuff? Because if it's a one man show, it, it is requiring you to wear all those hats. And the truth is no one gets it all right the first time. Like there's quite a learning curve there. And I, like I said before, I love for you to learn that with lower stakes.

[John Deloney]

And dude, I'm going to re recant on my support too. Here's why. This is a, you just said this is a one man shop.

[Matt]

His wife actually writes down the payroll and they take it to an accountant.

[John Deloney]

So. But it's a one employee shop. So what you're buying is his book of business. His book of business. You do not need to do that. You need to open up a local Facebook marketplace ad and say I will be there 24 7, 365 midnight 2am I will be there. And you're gonna get a few calls. You're gonna show up at midnight and you're gonna start your own business. You don't buy somebody's clients from them in this one man shop kind of way. I mean, you can do that. I wouldn't do it if it was a big company, maybe. But I'm recounting on my offer.

[Jade Warshaw]

I am too.

[John Deloney]

This show is sponsored by Better help. This month is all about gratitude. And most of us have people in our lives that we're grateful for. One of those people for me, is the wonderful Marilyn Fanon. She gave me a chance. She taught me poise and professionalism and she challenged me. But there's one person that we often don't take time to think. Ourselves. We don't always acknowledge that we're barely surviving or that we're moving forward or that we're working towards a better life and better relationship relationships. And in a world where everything seems to have gone bonkers, it's not always easy to be grateful. So here's my reminder to thank the people in your life, including you. And sometimes to do that, we need some professional help. We need to talk to someone trained to help us discover true gratitude for ourselves and others, especially in the holiday season. That's why I recommend BetterHelp. BetterHelp is 100% online therapy and you can talk with your therapist at just about anywhere so it's convenient for your schedule. You just fill out a short online survey to get matched with a licensed therapist and you can switch therapists at any time for no extra cost. This season, let the gratitude flow with BetterHelp. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H E L P.com DeLoney welcome back to the Ramsey Show. 888-255-2225. We are on election e eve.

[Jade Warshaw]

Indeed. Did you want me to say more?

[John Deloney]

No, I just like to feel the tension. People are driving. They're squeezing their, they're squeezing their, their steering wheel a little bit tighter.

[Jade Warshaw]

Oh, yeah.

[John Deloney]

Or they're like doing construction work and they're just turning the wrench a little bit harder.

[Jade Warshaw]

I should have went dun dun dun.

[John Deloney]

I know. This could be the last podcast ever produced the Ramsey Show Question of the day is brought to you by why Refi? Talk about that was a great transition. Love that James trains us on our transitions. I think I nailed that one. J. Why Refi refinances defaulted private student loans that other places won't touch and it gives you a low fixed rate loan built just for you. Charice K lowered her payment from $2,000 to 680 bucks a month. With Y Refi you can do something similar. Go to yrefi.com ramsey today to learn more. That's the letter Y, r, e, f, y.com/ramsey. And this may not be available in all states.

[Jade Warshaw]

That's a big deal. Wow. Okay. Today's question comes from Maggie in Utah. She says, my husband and I are in our early to mid-50s and he plans to retire at 60. I'm not sure when I will retire. We have about 3.5 million in assets. Our children are 16 and 21. When is the right time to sit down with one or both of our kids to go over our assets in case something happens to us? I think our 21 year old son would not be affected by the news and go on about his life as usual. If we tell our daughter who's 16, I'm afraid she will get stars in her eyes about all the things she could buy. We don't plan to die soon, but you never know what could happen in life. Yeah, I think that's a great question. I wonder. It's all really going to be based on what your, what your will is and what you plan to do with this money. I mean, obviously I would not have this set up, John, that if something happened, like if something happened to Sam or I, the kids aren't getting all of this money lickety split.

[John Deloney]

Correct. Right.

[Jade Warshaw]

It is something that will come in increments at certain age points with other certain things in intact. Like to Dave Ramsey's point, you can't be on drugs to get this money. Right. And so I'm not sure what your plan is, Maggie, but I want to make sure that's not the case because an 18 year old suddenly getting a million dollars is, doesn't usually go well.

[John Deloney]

Yeah. I, I'm reading this as she's wondering when do we sit down and tell our 16, 21 year old that we have three and a half million dollars in assets and here's how we're going to divide this up, I think.

[Jade Warshaw]

And, and to my, to my point that I'm trying to make is I want to make sure they have the right plan in place first.

[John Deloney]

Yes.

[Jade Warshaw]

So that when they do tell them it's not hey, and by the way, when you're 18, you're going to get a million dollars. So I think the way to avoid stars in the eyes is to say here's what's going to happen. Like if, if we were to pass away, here's what would happen. You would be gifted the money to pay for school. And at this age you'd be given the money to have a down payment on a home. And at this age you'd be given, you know, and walk through it so that at every point in time it's you're receiving this money and here's what it's for as opposed to. And you're just going to be Scrooge McDuck rolling in bills. Right. So I think it's all about how you have it set up, how you speak about it. And truly all of this is about what you've been teaching over time, right from the time they were eight years old, you know, or younger about how to handle money. And so the hope is that the 16 year old will have some level of okay, you know, and as she gets older, even more level of okay. This is, I have to be a manager here. This is not the key to unlock my whole life and I get to be irresponsible with this.

[John Deloney]

Yeah, I think the age appropriate is the words that manage here. And quite honestly, I would not sit down. I probably it depends on your 21 year old. I think I would tell my 16 year old that hey, if we ever, if mom and something happened to dad and I or mom and I, you're going to go live with so and so.

[Jade Warshaw]

Yeah.

[John Deloney]

Until you turn 18. And we've put together some, some things. They would sell the house so that you can afford to go to school and what else? Like they'll sell the house and you'll be taken care of and we'll cross that bridge when we get there.

[Jade Warshaw]

Details don't need to be talked about.

[John Deloney]

21 year old, I think a little bit more. Hey, if we ever passed away and you wanted to keep this particular rent house, we'll talk about that but you'll let us know and we'll begin to slowly balance those things out. My 14 year old knows if mom and I were to die, we have some things that would sell that we take care of his schooling and he'd be going to live with so and so. My 8 year old knows you're going to be Going to live with so and so.

[Jade Warshaw]

Right.

[John Deloney]

Like it's just age specific.

[Jade Warshaw]

I think Rachel Cruz says, share, don't scare.

[John Deloney]

That's right.

[Jade Warshaw]

And I like that.

[John Deloney]

So sitting down with your 8 year old and being like one day mom and I are gonna die, like that's a lot, right?

[Jade Warshaw]

Yeah.

[John Deloney]

Letting them know, hey, we have a plan if something ever happened.

[Jade Warshaw]

Yeah, you're all good.

[John Deloney]

We're gonna be and we want you to just be able to be sad. And then Rachel and Dave has been pretty open about his story. They didn't know the full extent. They knew mom and dad were well off. They did not know really. Dave Ramsey well off.

[Jade Warshaw]

Yeah. Big pockets.

[John Deloney]

Until they had graduated and they were married and they were moving on with their lives and then they sat him down, but they had a detailed plan and then there's some different levels of specifics you can get into there. So share, don't scare. And developmentally appropriate. I don't know that the dollar, dollar, dollar amount. I don't know that you ever need to sit down and go through each detail. Unless you want to say like, hey, this house right now is worth about this.

[Jade Warshaw]

Oh, I think at a certain age I probably would.

[John Deloney]

Yeah.

[Jade Warshaw]

Like depending on your wealth.

[John Deloney]

21, 25.

[Jade Warshaw]

Yeah, I, I mean to Dave's point, they kind of, they have a rhythm. For them it's yearly now.

[John Deloney]

They do now.

[Jade Warshaw]

But like depending on what that is, maybe it's every couple of years you're like, hey, as you see big changes in your wealth or in your state, whatever that is. Yeah, it might be worth it to do that. But I think as much transparency as you can at the right age is a good thing. Yeah.

[John Deloney]

Kids want to know are we going to be okay and what are we going to be taken care of. I think she's right to think. Yeah. If you tell a 16 year old, hey, if we die, you get $1.7 million, bro.

[Jade Warshaw]

Sleep with one eye open.

[John Deloney]

I wouldn't tell them that. You're out of your mind. I mean, you're out of your mind. Oh, let's go out to H town and talk to Eric. What up Eric? How we doing?

[Matt]

Hello.

[John Deloney]

What's up?

[Matt]

What's up guys? So I'm 21, I make 110. I'm going to make 110k this year.

[Jade Warshaw]

Okay.

[Matt]

And my problem is I have a 21 year old car that isn't running as well as used to.

[Jade Warshaw]

Okay.

[Matt]

So because of that I'm looking at a something a little more fun. A BMW 330. I.

[Jade Warshaw]

Okay.

[Matt]

I'm stuck on if I should give in and enjoy a newer. Well, it can be used by the use a newer vehicle. It's a 2021.

[Jade Warshaw]

Okay.

[Matt]

Or if I should keep the money because I would cash it out, keep the money to further invest. Since I do invest pretty aggressively. I'd say.

[Jade Warshaw]

What percentage are you putting away.

[Matt]

Investments? Probably at least.

[Jade Warshaw]

Off your gross.

[Matt]

I'd say at least 30%.

[Jade Warshaw]

30%. Okay. How much will the BMW cost.

[Matt]

After taxes? It should come out to about 29, 30.

[Jade Warshaw]

Okay.

[Matt]

30K.

[Jade Warshaw]

Okay. And tell us more about your. The rest of your financial snapshot. I want to know how long you've been making this income. I want to know if you have any debt and I want to know your living situation.

[Matt]

Okay, so last year I made 103. This year 110.

[John Deloney]

What do you do, man?

[Matt]

I cut hair. I. I'm a barber.

[Jade Warshaw]

Wow. Are you one of the barbers that I see on the Internet that makes hair out of no hair that you like?

[Matt]

I could.

[Jade Warshaw]

Oh, wow. Anyway, I've seen some things on the Internet.

[John Deloney]

110 cutting hair. I'm sorry, you make 110 grand cutting hair?

[Matt]

Yes.

[John Deloney]

I love this country.

[Jade Warshaw]

Way to go.

[John Deloney]

Way to go, dude.

[Jade Warshaw]

So. So you're on the uptick. That's. That's really, really great. And it's just your business, you've been investing 30%. Do you have any debt?

[Matt]

I did go on a trip recently. I ran up a credit card.

[Jade Warshaw]

Oh, I don't like it. Okay, how much did you run it up?

[Matt]

It's like 4,500.

[Jade Warshaw]

Okay, that's a lot.

[John Deloney]

But what kind of trip did you go on?

[Matt]

I went to Japan.

[John Deloney]

Okay, you're living that life, 22 years old. Jeez Louise, man.

[Jade Warshaw]

Any other debt?

[Matt]

No. Well, I do have two investment properties in Ohio.

[Jade Warshaw]

How can we forget about that in Ohio? Okay, so you're just to remind people you're in Texas and so tell me about these investment properties in Ohio. Oh, wait, I'm. Okay, wait a minute. I'm against the clock. I'm gonna tell you what my thought for it is for this. I don't think you've learned enough about how to manage your money properly yet. I think you're doing really good financially with your income. But I want you to learn more about how to manage debt and the right way to buy real estate. For me, you buying this car right now feels reckless because you have it learned everything you need. And it's a slippery slope for you so I'd say no right now. Keep diving into the Ramsey material.

[John Deloney]

Get a Camry, my man, and sell those rental properties in Ohio. But congratulations on being $110,000 a year, Barber. This is the Ramsey Show. We'll be right back.

[Dave Ramsey]

What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should, too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities with one unified business management suite. There's only one source of truth for the visibility and control you need to make quick decisions. NetSuite's real time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's Next, download the CFO's guide to AI and machine learning at netsuite.com Ramsey it's free at netsuite.com.

[John Deloney]

Ramsey live from the headquarters of Ramsey Solutions just outside of Nashville, Tennessee, it's the Ramsey show, where we help people build wealth, get out of debt, find work that they love, and learn how to have great relationships and emotional and mental health. I'm John Deloney, joined by my great friend Jade Warshaw. We are taking your calls on election eve.

[Jade Warshaw]

Ah, yeah.

[John Deloney]

Triple eight, eight two five five two two five. Jade and I were just making bets.

[Jade Warshaw]

I. Yeah, we were talking about if you had to put actual cash because you, by the way, you can bet on the election, which is sick and sad, but if you had to put cash money on the line, who do you think would win? It was an interesting conversation.

[John Deloney]

And back in where the personalities were, our offices are. Ken Coleman and Rachel Cruz are back there and they are lit up like a Christmas tree. This is like their. This is like, this is their Super Bowl. Ten Super Bowls into one. And for me, I'm going to get off the show today and head to the woods and I'm not going to come out until this whole thing is over. So it's the opposite of that for me.

[Jade Warshaw]

That's funny.

[John Deloney]

To make sure my chickens are okay. And that they're still producing eggs in case.

[Jade Warshaw]

I will definitely watch and I will. We will all be okay.

[John Deloney]

Of course we are. We're all.

[Jade Warshaw]

We'll be okay.

[John Deloney]

Unless this other candidate wins.

[Jade Warshaw]

And then it all comes down.

[John Deloney]

Let's go out to Sacramento, California and talk to David what's where. There you are. What's up, David?

[David]

Hi there. Hi. Thank you so much for picking up my phone call. But anyways, my question is this. I'm about to close my escrow and the current interest rate that I'm locked in is really high. It's like 6.875.

[Jade Warshaw]

Okay.

[David]

And my loan officer tells me, hey, don't worry about it. In about a year, you know, two years down the line, interest rate was going to go down. You're going to refinance. So that's fine. And I want to put it. I have the potential to put in a lot of money like upfront because from the calculation from your show teaches me, teaches me how these things works. Right. And so it's just mathematics.

[Jade Warshaw]

Yeah.

[David]

And so my, my loan. So I'm shopping around, I'm shopping around like through with two different loan officer along with my realtor, and they all wonder why would you want to put money up front?

[Jade Warshaw]

Because they're not financial advisors. They just want to get you in this house and they're think they're filtering it through what they would do. A lot of people, you know, it's human nature. If you give advice, you're kind of giving advice based on what you might do.

[John Deloney]

And a lot of these loan officers for homes, they. Most of their life is people trying to scrape together and mow lawns to get. Get that 2.999 up to 3%. Like there's. It's so hard to find people who actually save money like you, Dave. It.

[David]

Okay.

[John Deloney]

It's just rare.

[David]

So I just want to make sure that I'm, you know, my math is not wrong somewhere where they. So they suggest this, save your money now and wait until you refinance. Let's say right now I'm at 6.8.

[John Deloney]

Right.

[Matt]

Okay.

[David]

Wait until it. Let's say it goes down to four. And then put in all the money in when you refinance to a 4% and I'm punching my number. I'm like, no. Still it won't benefit me by putting it in later in life versus now. Even if later in life is also.

[Jade Warshaw]

And you can't predict the future. That's the truth. We can speculate and say here's what we think will happen. But the truth is, I mean, Fed, the Fed lowered interest rates and it had an averse, an adverse effect on the home market temporarily, I think, I think there's a lot of things that affect that. But right now those home loans went up just slightly. You know, those interest rates and so you never know what's going to take place. We're in an election cycle. You don't know. I mean, I, I would tend to agree. Yeah. I think over time mortgage rates are going to go down and you'll be able to refinance, but you truly don't know. You have the money here and now and you have the ability to affect how you want your mortgage to feel here and now. And so if you want to put as much down possible, I vote for that. Because when you put as much down possible, yeah, it's definitely lowering your payment, it's ensuring equity, and it's getting you to the point of payoff a lot faster. And then, yeah, in two years or whatever, if you want to refinance to get that lower rate. Yeah, it's up to you to do so.

[John Deloney]

David, how much are we talking here? Like how much cash are you sitting on that you're debating on whether to put down or not?

[David]

I would all the minus, minus my closing costs, I have about $65,000, you know, sitting on the side collecting at, only, at only 4%, you know, in. Yeah. Okay, so it's only, it's only collecting at 4% while, you know, my interest rate is at 6.8 right now. So it's more beneficial put it in the house instead of just let it sit there at 4%.

[John Deloney]

What, what's the total purchase price of this house?

[David]

The total purchase price is 485 and I'm putting down 25% already, but I want to put in more. But they're like, why, why would you want to do that?

[Jade Warshaw]

I think, I think they just don't understand that way of thinking. Most people are not thinking about the idea of paying off a mortgage.

[John Deloney]

Yeah. It's just not people's mind.

[Jade Warshaw]

The minimum possible to get in the house is enough for you. Is a lot of times where people's mind is at.

[John Deloney]

And can I, can I, can I throw an alternative in there that will just throw a wrench in all this for you, David.

[Matt]

Okay.

[David]

Okay.

[John Deloney]

It's a different calculation that I do. I am not a number savant. I'm just not, I'm just not quick like Dave. I've sit by Dave I sit by Jay. They just do math in their head. It's amazing. I just, I can't do that.

[Matt]

That.

[John Deloney]

Okay, here's the different calculation I make. What job do you have? What do you do for a living?

[David]

So I, I'm basically, I am in clinical trials.

[John Deloney]

In clinical trial. Okay, so you do, you do R and D, you do research?

[David]

Yeah, yeah. Research, yes.

[John Deloney]

Okay, so let's say one of the new candidates comes in and just cuts off NIH funding all of a sudden. Or does something like warp speeds it again. Like Trump's operation warp speed. Right. And suddenly dumps a bunch of money and you get to skip the third step and go straight to market. Like either way, imagine your job goes away and you have to go find other work. What I would, the reason I would vote to put all the money down, aside from the math. And you've done the math, right. And so you're seeing it, it would be quote unquote, making 6 point whatever percent what my APR is because it's only making 4 in this place. And I could put in a mutual fund and there's going to be the TikTok Bros. They're like bro, the gap, the spread, all that. But you're doing the math, right? The additional layer of peace that I would solve for in my house as a non number guy.

[Jade Warshaw]

Boom.

[John Deloney]

Is if I lost my job but my mortgage was only 275 instead of 350, would that lower my payment enough that I could go get down the street and get a regular job and keep my home?

[David]

Okay.

[John Deloney]

Do you see what I'm saying?

[David]

Yeah, I do.

[John Deloney]

And so I, in my house, when I've taken out mortgages, I solve for peace. I care more. I call it a soul tax. I will pay 2% or 4% on the. I will pay that so that I know if I got fired or if my job went away, I could go find another job or two and keep my home so my wife and my kids would not have to move. And I know there's, there's, it can be, that can be stretched out and well, if you keep your 65 grand in emergency fund, then you've got that to spend. I get all that. If I'm going to sign up for a mortgage, I want that payment to be something that I could absorb if and when something happens. Right. And you're in a field, I'm in a field. Who knows what happens to us the day after tomorrow. Right. And so I want to take as much risk off the table on these low level on this side of the barbell. And that is, is my housing covered? Is my four walls covered? Do you have an emergency fund?

[David]

I do.

[John Deloney]

Yeah, dude, I. So that's all I'd say is, dude, I would solve for peace here. You've done the math and you're, you're right on the math. I would solve for peace and put this money down on a house and take out as small a mortgage as possible, make the bank the least amount money possible, possible at your expense and be able to take care of yourself if something were to happen to you. Does that sound right?

[Matt]

Okay.

[John Deloney]

Yeah.

[David]

Sounds good. Thank you so much for your confirmation.

[John Deloney]

You're on it. Okay, here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with. People are unknowingly putting money into tech giants and household brands that don't match up with their core values. But here's good news. Timothy Plan is at the forefront of biblically responsible investing. That means Timothy Plan uses a strategy that lets investors chase competitive returns while staying rock solid in their beliefs. So if you're ready to invest with a clean conscience, it's time to check out Timothy Plan. Request [e-mail] to learn more or contact your financial advisor today to see if.

[Jade Warshaw]

Timothy Plan is right for you.

[John Deloney]

Timothyplan.com investing includes risk, including possible loss of principal.

[Dave Ramsey]

Before investing, carefully consider a fund's investment objective, risk, charges and expenses contained in the prospectus or summary prospectus. Available at Timothy Plan. Read carefully before investing. Mutual funds distributed by Timothy Partners Limited and ETFs distributed by Foresight Fund Services, LLC. Folks, the Ramsey Christmas cash giveaway is here and you could win big. We're giving away $500 prizes each week and one grand prize of $5,000. Enter daily for your chance to win at Ramsaysolutions.com giveaway. It's that easy. Plus, our 50 Days of Christmas deals is on right now. Get up to 30% off bestseller and life changing gifts that won't break the holiday budget. Ramsaysolutions.com store.

[John Deloney]

Welcome back to the Ramsey Show. I'm John Deloney joined by Jade Warshall. Listen, the best way, the best way to make the most of your money is by creating and sticking to a monthly budget. A monthly budget. Nobody likes it when we say that, but it's just the truth.

[Jade Warshaw]

It's the truth.

[John Deloney]

It's reality. Every dollar makes it simple to plan spending, track expenses and save for what matters most to you. All in an easy to use app that fits into your busy lifestyle. Every Dollar is the greatest budgeting app on planet Earth. Keep a pulse on your spending and make progress on your money goals. With Every Dollar. You can download Every Dollar for free F R E E free in the App Store or the Google Play Store. I don't know if Google plays a store if it's just a thing or you can click on the link in the description if you're listening on YouTube or podcast. Every Dollar.

[Jade Warshaw]

Every Dollar.

[John Deloney]

I feel like we need to say that like low key. Every Dollar. All right, let's go out to ATL Atlanta, Georgia and talk to Fancy Nancy. What's up, Nancy? How we doing?

[Susanna]

I'm doing fine, thank you. Thank you for taking my call. I just need some assistance and I know that y'all be able to help me, but I'm a. I'm 59 years old and I've been married for 37 years. I was a stay at home mom and I homeschooled my three kids. But I'm currently in divorce proceedings.

[John Deloney]

Oh, gosh, I'm sorry.

[Susanna]

Yeah. It was due to emotional abuse and anger and rage and he's unwilling to address any issues and so there's no trust and safety in our relationship. So I have actually been in Financial Peace University. He was not involved in our finances and I begged them for three decades to get involved, but he would just ignore me. Although I went through Financial Peace University and I did all the baby steps. We owe 55,000 on our house, which is worth about 430. Otherwise we have no debt.

[John Deloney]

Okay.

[Susanna]

But because we've never been on the same page with our finances, we never really saved anything. And he liked to eat out a lot. So we wasted a lot of our money. But in retirement, if we were together, we were planning on using some money that his parents left us.

[Jade Warshaw]

How much is that?

[Susanna]

And it. It's about 800,000 right now.

[J]

Okay.

[Susanna]

And later on in life he started a 401k which has about 300,000 and I have a small one and we have some small HSAs. But the last major outburst, he basically told me he was going to destro me.

[Jade Warshaw]

Oh, I'm sorry.

[Susanna]

It was.

[Matt]

Because.

[Susanna]

Yeah, sorry.

[John Deloney]

Destroy you financially or physically?

[Susanna]

I. Well, financially I believe he. He never did. He was just more emotional and kind of cruel and stuff.

[John Deloney]

Have you met with the divorce attorney? I'm assuming you're in proceeding now.

[Susanna]

Yes.

[John Deloney]

Okay.

[Susanna]

And we're going to mediation and I just wanted advice on what to think or how to proceed. Because my lawyer, that I think is really good, you know, he said, just come up with a good, better best options, and we're going to get together and talk some more. But my husband talks about, you know, his salary and this inheritance being all his, and I just don't know what to expect.

[John Deloney]

No, I mean, yeah, he's not right. And he's bluster. And so here's what I would not do. If he's not trustworthy in most of the other aspects of your marriage, I wouldn't suddenly go full trust on this bluster. Okay. He is trying to flex his muscles on a situation that he is losing control of. Right. Like. Like, through. Like sands in an hourglass. Right. And so. So I can't give you legal advice. I think your attorney knows the laws of Georgia and knows what mediation looks like in the state of Georgia. And that's different across the board. But I will say from my experience, that sounds about right. You laying out and saying, okay, here's what this looks like and what does it look like to split things? And as part of a divorce, I would make peace with probably we're going to have to sell the house and split those assets.

[Jade Warshaw]

And you should, by the way, and.

[John Deloney]

To get out of that, unless somebody wants to buy somebody else out from this house and the inheritance and the retirement accounts, those things usually get split up in some shape, form or fashion. And after 30 years together and you staying at home for 30 years, taking care of the household, you, generally speaking, are entitled to half of that estate, depending on what. What. What's going on. But I can't give you any details on that. I think your attorney's right on, though.

[Susanna]

Okay. I was going to ask about the house. Like, I don't want to stay there. And he was thinking about buying me out.

[John Deloney]

Great.

[Susanna]

And I just didn't know if that's a good option or not, or we should just sell it and.

[Jade Warshaw]

Okay, that's. I mean, if he wants to buy you out, that's great. You'd still get your cut regardless.

[John Deloney]

6.5 does another for you if you don't want it. Yeah.

[Jade Warshaw]

And then, I mean, essentially based off of what you've said, you didn't say how much is in your 401k. Do you know off the top of your head?

[Susanna]

Well, I never really worked, so. Yeah, it's like 60,000.

[John Deloney]

Hey, Nancy. Nancy, I want you to change that language, please.

[Susanna]

Okay, okay.

[John Deloney]

You. You. You built and held together a home for three decades.

[Jade Warshaw]

Okay.

[John Deloney]

I want you to stop saying that you don't have any economic value in this arrangement because you didn't, quote, unquote, quote, punch a clock in an office. You've been working your butt off for 30 years. You've been keeping the fine. You've been keeping the books. You've been trying to manage the emotional safety of that home for 30 years. Dave gave me a line. He. He. He gave me a. A, A quote. That has really proven instructive here. Okay. Once somebody files for divorce, the marriage is effectively over. It is now a business arrangement. We are untangling business assets. And the reason you hired an attorney is because they will come in, they will know the law. They will be a hired gun on your behalf. That's their job. And they do not bring 30 years of emotional pain and hurt into the negotiations. So I want you to let your attorney do their job.

[Susanna]

Okay?

[John Deloney]

Okay. I want you to keep your integrity about you. And sometimes attorneys want to settle this thing for as low as possible because they're going to take their cut either way. And some will look at you and say, no, no, no, I'm going to do right by you. Okay? Let them do their job. But I want you to throw your head back, throw your shoulders back. This is a business. This is a business deal now, and we're going to do what's right. And you constantly telling yourself, I didn't work for 30 years. This is not true. You've been working a lot. Okay.

[Susanna]

Yeah.

[John Deloney]

A lot. Cool.

[Matt]

Yeah.

[Susanna]

Yes. Yes.

[John Deloney]

Can I tell you something else? Can I give you a homework assignment? Sure. How old are you right now?

[Susanna]

I'm 59. Okay.

[John Deloney]

I want you to write a letter to 63 year old Nancy.

[Jade Warshaw]

And I.

[John Deloney]

Want you to tell her that you're doing hard work right now so that she will be safe. She'll have a place to live that's hers and she'll have some economic stability. And that because of the hard work and the grieving you're going to do right now, she's going to be okay.

[Susanna]

Okay.

[John Deloney]

All right. And I want you to imagine her having a cup of coffee in a safe house, surrounded by her kids, surrounded by some goofy dog. Because you're not a cat person. I can already tell that. Thank God. Right? You're a dog person. But I want you to begin to picture exhaling when you come home, not your chest tightening up. Okay? Okay.

[Susanna]

Okay.

[John Deloney]

Because that's been happening to you for too long, right?

[Susanna]

Yeah.

[John Deloney]

Yeah, we're done with that now. I'm so sorry that this is happening to you let your attorney do their job.

[Jade Warshaw]

Yeah.

[John Deloney]

Am I missing anything?

[Jade Warshaw]

Jade, I think you're going to come out of this okay. With the assets that you guys talked about, you're going to be all right. You're going to need to work with an advisor. And when the time comes, we want you hooked up with a Ramsey smartvestor pro in your corner to help you go through this. But you're going to be all right. The money is there.

[Dave Ramsey]

I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable.

[Jade Warshaw]

Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills?

[Dave Ramsey]

How about next week?

[Jade Warshaw]

Yeah. In the middle of all that grief, like, it's just, it is, it's terrible. And so life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance.

[Dave Ramsey]

And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282. Or go to zander.com hey, folks, Dave here. If you haven't booked your cabin on the live like no one else cruise, now's the time because it's 90 something percent sold out. You do not want to miss joining me, the Ramsey personalities and amazing guest entertainers for the ultimate debt free celebration. We'll be sailing the Caribbean March 22nd through the 29th, 2025, stopping at the incredible Turks and Caicos, Puerto Rico, St. Thomas and the Bahamas. Hurry to secure your spot with a $600 deposit [e-mail] cruise.

[John Deloney]

Welcome back to the Ramsey Show, 888-255-225. Taking your calls live on life money. Your mental and emotional health relationship ships Your work, all of it. Call with just about anything. We probably got an opinion on it. All right, today's Ramsey network app question. So we have the Ramsey network app. It's where you can go to get the show. You can get video of the show. You can get all three hours of the show. It's kind of where all the cool kids hang out these days. But we also have an opportunity to take questions in the network app. And so we've got one from Parker here. Here's what Parker asks. He says, I'm 23 and I'm currently living with my parents, but I want to move out of state to be with my fiance.

[Jade Warshaw]

Okay.

[John Deloney]

I have a job lined up and she has an apartment we're going to be living in while we both work to save up for a home. The problem I'm having is my family. The problem I'm having is my family because they don't like the idea. My parents have always believed in being married before moving in together, and their stance is making it hard for me to make a decision. What can. What can I do moving forward to show them that my moving away doesn't mean I'm betraying anyone? Sounds like a Bon Jovi lyric. I just want to live my life my way. Here's the deal, brother Parker, rock on to the break of dawn. Dude, if you want to live your life your way, go live it.

[Jade Warshaw]

Bobby Brown said it.

[John Deloney]

The fact that you are having this much stress in your decision making means you don't want to just live your life your way. You want to live your life your way and have everybody else in the world go along with the way you think it should all work. And you want people with wisdom to be quiet and just do what you want them to do. And you want people with opinions or who have data or whatever to just shut up and let you do your thing. So if you want to go do it, go knock your lights out. But I don't think that's what you just want.

[Jade Warshaw]

Yeah, I got a hot take on this. You know, like I said, Bobby Brown, it's my prerogative. You can do what you want to do, like you can. But I think this is just what I think. I think when you're brought up a certain way and you. And. And in this case, I'm just gonna side with the parents. I think this is the right way. I think it's a good idea to not live together before marriage. There's so much research around that. Anyway, I think when you are stepping out of of safe boundaries and good boundaries. I think that what you're feeling is your heart going, this is not the right thing. And I think it's easier for you to say it's my parents. I think it's you. I think, you know, this is not a good move for you and you're trying to go beyond it. Under the guise of it's my life, I get to do what I want to do and why don't I feel good about this? I actually think it's your conscience going that this ain't it, Parker. And I think you should listen to that.

[John Deloney]

That's what it saying it.

[Jade Warshaw]

Parker, Parker, this ain't it. And so I think that's what's happening because I know, you know, you talked about the voices in your head.

[John Deloney]

I have multiple voices in my head.

[Jade Warshaw]

Yeah, but you know what I'm saying. The idea that you hear the people who, who you allow to speak in your life, whether in a negative way or in a positive way, you. Their voice lives rent free in your head. Right. Dave Ramsey's voice will always live rent free in my head. When I go to pull something off of a shelf that I have to pay for, I always hear him. Him in there anyway. You hear your parents voice. And so I know if I had tried to strike out and move in with my boyfriend, I would have heard my dad's voice in my head like, whoa. And I think that that's what's going on. And maybe listen to it because your parents raised you. The fact that you're writing into this show lets me know that you have somewhat of a good head on your shoulders. Maybe listen to them.

[John Deloney]

And I think you're. I think it's good to call it. Forget all of the. The wisdom your parents want to pass along to you and whatever, you know, old. They're old fashioned or it's just their dumb church. Whatever you want to say about it. The. The research says couples who play house, they. And again, it makes sense on paper. I'll go with you. Makes sense on paper.

[Jade Warshaw]

Before you think you're testing it out.

[John Deloney]

That's right. Before we do this forever. Let's try it out for. For six months. Let's try it out for you. That makes sense on paper. What it doesn't take into account. And that may work with a car.

[Jade Warshaw]

Yeah, right.

[John Deloney]

It may work with a car, but people aren't cars. And the only way marriages work long term, the only way romantic relationships and partnerships work over time is there has to be a tethered in Commitment that says, this cannot end.

[Jade Warshaw]

That's right.

[John Deloney]

Otherwise, it will talk to anybody who's been married for any length of time and they'll tell you, oh, yeah, if that thing wasn't in concrete, we would have gone our separate ways for any number of reasons. And so it always comes back to this promise, I will be right here, and we'll figure this thing out. And so you end up living separate. Co. Managed. Co. Co. Everything lives instead of creating a new life that has one entity moving forward. It's hard, right? It's hard.

[Jade Warshaw]

I also think it's a. Guys, I think it's, you know, if. If you're. If you're dating someone and you decide, I know I'm going to use old school language here. You decide to go steady or like, hey, it's just us, like, we're not going to see other people, whatever you to say that right there kind of has. That's about the. Before you're married, that's about as far as a relationship goes before you get engaged. Of saying, I'm only going to date you and only you. But our lives are intertwined. So I kind of have the rip cord I can pull if you turn out to be a psycho or you turn out to be not the one for me. Right. But then we've told ourselves, hey, I can take this commitment a step further by saying, come live, Come move in with me, or you move in with me. But it's really the opposite. Because you're saying, you're telling yourself this is me displaying another level of commitment, but it's really you showing a level of uncommitment by saying, I don't want to marry you, but I want to intertwine our lives. But I also want to know that I can pull that same rip cord.

[John Deloney]

That's right.

[Jade Warshaw]

And so for me, I'm like, why would I get myself intertwined even deeper with you if you're still looking for a rip cord to pull?

[John Deloney]

Yeah.

[Jade Warshaw]

Do you see what I'm saying?

[John Deloney]

If you're not ready to go in, don't go.

[Jade Warshaw]

Don't go in.

[John Deloney]

Right. And Parker. So if you're. If you're my friend or if you're one of my grad students, you came in and said, hey, let's just. I need to have coffee and just want to talk, I would say, go marry your fiance and make a line up a. And I hate to say this words line up a business arrangement so that you begin sharing things fiscally, you begin sharing things romantically, emotionally. We are Going to create a life together, a home together. And so if somebody ever yanks this rip cord unintentionally, there is a structured separation here. You're not just trying to figure out how to separate whatever goes on when y'all start buying houses together, whatever people do. But I'd say get married or. Slow down. Slow down. If they're. If that's your fiance, then you've already made this sort of a commitment together. Then wait till it's official.

[Jade Warshaw]

Yeah, I agree. I agree.

[John Deloney]

I know, but I hadn't thought of your. Often we get to blaming everyone else in our life.

[Jade Warshaw]

Yeah.

[John Deloney]

But it's because we don't like looking in the mirror and. And looking at our guts and being like, this isn't right.

[Jade Warshaw]

Sometimes it is that.

[John Deloney]

Remember like in college, when you're dating somebody and you're. All your friends are like, that's not a good idea. And you start to go, that discomfort is because of them.

[Jade Warshaw]

Yeah.

[John Deloney]

It's like, no, because I know.

[Jade Warshaw]

Listen, let's. Let's go down another trail then, John, because I think what it is, is we've also told ourselves that. And this is erroneous. Good friends and, you know, good, supportive people, they support you no matter what.

[David]

No.

[Jade Warshaw]

And they.

[John Deloney]

They tell you the truth no matter what.

[Jade Warshaw]

Okay. And that's the other thing. Like, that's countercultural to go, I feel bad because this person is telling me a hard truth right now. Or they've ingrained a hard truth in me right now. It's easier to say, you know, I. I'm gonna go my own way and I'm gonna do it my way. And this is living my truth. Truth. But then when you feel bad, you're looking at everybody. You're the one making me feel bad. You're the one. You should have supported me. I'm like, no, bro, that's your. That's your conscience that is feeling bad.

[John Deloney]

Is inside out most of the time.

[Jade Warshaw]

Yeah.

[John Deloney]

Right.

[Jade Warshaw]

Yeah.

[John Deloney]

And I think back to conversations. Gosh, I could just name him, like Trevor and Tucker and Christian and Buddy and Craig and. God, I could keep going for days, man.

[Jade Warshaw]

Todd, these are your guys.

[John Deloney]

These are men in my life. Jean Noel. These are men. Chris Melson. These are men who have looked me in the eye over from when I was a little boy all the way to a grown man. And they say, I see something, and you stop.

[Jade Warshaw]

Yes.

[John Deloney]

Or here's another way to look at this. Or I want to challenge you on this. And I am only sitting here because those men loved me. Enough.

[Jade Warshaw]

Yes.

[John Deloney]

To say, hey, stop. And women, too. There's been women, too, in my life who love me enough to say, I'm calling you out. Yeah, right. And it's not. It didn't make me feel bad. Did I feel bad?

[Jade Warshaw]

Yes.

[John Deloney]

I felt bad because I was exposed. Right. I was brought to light. And thank God those, those men and women have called me out over time, man.

[Jade Warshaw]

Let me tell you, if you don't have good friends in your life, who will sit you down and tell you, you need to cool, cool out, or they'll tell you about yourself, you don't have the right people. You need. Good friends, do not always agree with you. And your parents, if they're being good parents, are not trying to be your best friend, they're not always going to agree with you. They're going to set you straight because they've lived a lot longer than you Now. Now, I'm reserving this, assuming that this is some parents who've got some sense.

[John Deloney]

Some parents are a little bit right. So fair enough, fair enough.

[Jade Warshaw]

But you need somebody who's going to set you straight, and you need good people who are older than you, who have lived more life than you to set you straight.

[John Deloney]

So all that to say, listen to your parents, Parker. Listen to your parents. We'll be right back.

[Jade Warshaw]

Just don't understand.

[Dave Ramsey]

If you own a small business and you like the Ramsey show, then you're going to love the Entree leadership podcast. Almost 200,000 listeners tune in every Monday to hear me take calls from real business leaders and give tactical advice based on my 30 years of experience leading. This is not a podcast about business theory. It's real insight from a practitioner who actually does this stuff. Find it anywhere you listen to podcasts or if you're listening on YouTube or podcasts now, just click the link in the description.

[John Deloney]

Welcome back to the Ramsey Show. I'm John Deloney, joined by Jade Warshaw. Let's go out to Orlando, Florida, and talk to brother David. What's up, David?

[Matt]

Hey, how's it going, guys?

[John Deloney]

Doing great, man. What you up to?

[Matt]

Not much. Not much. Appreciate you guys taking my call. God bless. I'm calling to ask about my condominium. I'm not sure what to do with it, so I bought it in 2010 with cash. And the HOA has been increasing since then. It's about 600amonth and. But a couple months ago, the HOA, the condominium company, the. The guys in charge.

[Jade Warshaw]

Yeah. Did you fall out?

[John Deloney]

Oh, we lost.

[Jade Warshaw]

He fell out.

[John Deloney]

Oh, we lost. Him.

[Jade Warshaw]

Well, maybe he'll come back.

[John Deloney]

I think the. The HOA gods were like, stop. And they just cut it off. All right, let's go.

[Jade Warshaw]

Wait. We think he might be coming back.

[John Deloney]

Oh, line one. Okay, let's go out to Los Angeles, California and talk to. Oh, Susanna. What's up, Susanna?

[J]

Hi. How are you both doing today?

[John Deloney]

Good. What's going on?

[J]

So I apologize if my voice is shaky. I'm riddled with self loathing and neuroses.

[John Deloney]

But I am, too, and so is George Camel. You're in good company.

[J]

Thank you. Appreciate that. So I guess just. I was asking how I can. My financial question is, what's the most effective way to tackle my student loan debt to start pursuing my other financial goals? I got my. I got my master's degree last year in social work. I've been working in mental health for the past 10 years. And I don't have a regret with getting my master's because, you know, here in California, you need, you know, you need that degree to, you know, move up in this field. And I did take out a loan. My current debt right now. I hate saying it out loud. It's $41,944.79. The reason why the loan is that big. Just some. A quick background on me. I am a first generation. You know, my parents are immigrants and, you know, they work really hard. But unfortunately, you know, there was never that, you know, like. Like general, you know, like, they were never able to help me out financially, which I don't expect them to, by the way, but, you know, that's kind of my background. I've been working since I was. I've been working since I was 15 years old. I. I haven't stopped.

[John Deloney]

Susanna, can I. Can I interrupt real quick? Real quick?

[J]

Yes, of course. Yeah.

[John Deloney]

Okay. Listen, Jade and I are on your team. Okay?

[Jade Warshaw]

You don't have to explain. You don't have to apologize for anything.

[John Deloney]

Listen. 41K. Jade and I had multiple six figures of student loan debt. You. You're. You're good, man. We should. We would have been calling you for advice years ago. Okay? Okay. And I. I am. I dedicated my life to working in the emotional and mental wellness of other people. I love what you do. I wish you didn't owe 41,000 bucks because it's wearing you out and it's making you exhausted and it makes it hard to show up for clients day after day after day after day because you have your own anxiety and your own stress from that. Dad, I wouldn't wish that on anybody, but we're on your team. Okay.

[J]

Yeah. Thank you both. I really appreciate that.

[Jade Warshaw]

So let's jump in, let's jump into the issue. Is the problem that you're trying to pay these off and you don't know where to start. Tell me about the problem.

[J]

Yeah, so I think it's just mainly that, like, not knowing where to begin. And then on top of that, I'm 31 years old and I, I, you know, I know that there's a timeline that I kind of wanted to follow. I know. Timeline. Sometimes they, they're not, you know, they're not going to be linear. I wanted to be a homeowner definitely before I was 40. I thought, well, a lot of times.

[Jade Warshaw]

When we have those goals, the way to reach them is to kind of reverse engineer it and say, okay, if I want to be a homeowner by the time I'm 40, I'm 39 now. That gives me a nine year spread. What do I need to do to make this happen? Right. And in your case, it's, it's. Let's do the math and let's figure out where the holes are. So if you tell me that you have almost 42,000 in student loans, the first question I'm asking is, is that your only debt?

[J]

So I have two credit cards, but honestly they're very small. It's about like a thousand each. So I know that I can pay off easily.

[Jade Warshaw]

But it does matter in this equation. And the reason that those credit cards matter is because they speak to your habits. Habits. And so I don't want you to just because the balances aren't high. I don't want you to say, oh, I have these credit cards, but they don't matter. They actually matter quite a lot because it speaks to your nature of wanting to borrow money to get the things that you want or need. And so I want you to look at those and go, okay, this is a habit that I've started and I don't want to do this habit anymore. So the first step for you is to break up with those credit cards and say, if debt is causing the anxiety of Deb de. Debt is the problem in my life. I have to stop borrowing money and I have to cut that off at the source. And so my first homework for you off this call would be, let's cut up those credit cards and decide that we're going to live on our, on the money that we make. Fair enough?

[J]

Yeah. Yes, that's fair.

[Jade Warshaw]

So we got the two credit cards the balances aren't particularly high. Is there any other debt that you want to talk about?

[J]

No, it's just that. It's just. Just have to. Beside those two credit cards, it's just the student loan debt.

[Jade Warshaw]

Okay. And then how much are you earning from your job?

[J]

So I make 77 a year. A little bit of change, and then I have a side hustle. I work at a hospital, and that's not always consistent. I work whenever they need me. I'm per diem. But I want to say I bring home like 2000. So I think I'm taking home every. Every month about 6K. And I know that's a pretty good amount. And to, you know, I never, like, have the habit of. Well, aside from school. And the only reason why I got the credit car was because, like, I had people telling me, you know, family members, like, oh, that's the only way you build credit.

[John Deloney]

Yeah.

[Jade Warshaw]

They were wrong. Never.

[J]

Because I was.

[Jade Warshaw]

They were wrong. They were wrong. They jacked you. But here's. Here's the thing. I want to get one last piece of information from you. How much of what are you paying in rent every month?

[J]

My rent is. It's only a thousand, so. Too high. Thankfully. I live with family, so I'm actually a really good Saver. In my 20s, I traveled a lot.

[Jade Warshaw]

How much do you have saved?

[J]

A lot. In a year, I was able to save 30k. And disciplined. Yes, I do. And I put some of it into Ohio Things account, and then the rest, I. I have it in my savings. Again, I. I don't know a lot about any financial things, and I'm.

[Jade Warshaw]

Well, let me tell you, Susanna, let me tell you. Let me help you. The 30,000. And I know this is going to go against every fiber in your being right now, but I'm going to tell you anyway, and you're going to roll this around in your head. And my hope is that you'll decide to do what the people on the radio told you. If I were you, I would be tapping into that 30k that saved because it's not really your money. That money.

[J]

Yeah.

[Jade Warshaw]

Is owed to the student loan companies. And you will feel a lot better if you just give them their money and you'll be able to sleep a lot better at night because right now you're. You're holding. You're holding it from them. You agreed to pay, so you have the 30,000. I take 29,000 of that and I'd pay the vast majority, the big bulk of this, the credit cards and the student loans off. Credit cards are gone today. Most of the student loans are gone. And then how quickly could you pay off the other $10,000 or so of student loans?

[John Deloney]

I can tell you November, December, and January. By February 1st, you could be debt free.

[Jade Warshaw]

Susanna.

[J]

Wow. Yeah.

[John Deloney]

That's 3,000 bucks a month. Right. Would cover the rest of this. And you don't owe anybody in the world. And can I flip that around? Nobody in the world owes you. I mean, owns you.

[J]

Yes.

[Susanna]

Okay.

[John Deloney]

How cool is that?

[Susanna]

That sounds.

[J]

Yeah, no, that's pretty great. And, you know, even before jumping on the call, I was kind of mentally. I've even. I was mentally preparing myself. Like, I think I'm just gonna have to pay this and write this off. The only reason why I didn't start paying off my debt right away was because, you know, I think a while back, they were supposed to forgive student loans for social workers. So I did put it on hold.

[Jade Warshaw]

I can understand.

[J]

Yeah. Now that it seems like that's not happening. You know, and I am in a relationship. You know, obviously we're not engaged or anything. But I did tell, you know, my significant other. I told them, look like, you know, because he's actually really good at saving money and everything. And he's really good support.

[John Deloney]

Well, it's good to have him. It's good to get it all paid off.

[Jade Warshaw]

And you're right. I think that the reason you were steadying yourself and getting ready to do this, because you know, it's the right choice. And I hope you do it today.

[John Deloney]

Go make it happen. Hey, for all of you listening to the show on YouTube or podcast, it's about to end. Head over to the Ramsey Network app to finish the show. And that's where the party is at. To go further with Ramsey, we got calls picked for you. You can filter by topic. All your favorite Ramsey shows in one place. Don't miss what's coming next. Come see us on the Ramsey Network app. We'll be right back.

[George Camel]

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