Shortcuts Today Lead to Setbacks Tomorrow

Summary

The Ramsey Show: "Shortcuts Today Lead to Setbacks Tomorrow" – Detailed Summary

Release Date: August 1, 2025

Introduction

In this episode of The Ramsey Show, hosts Rachel Cruze and Jade Warshaw delve into the theme, "Shortcuts Today Lead to Setbacks Tomorrow," emphasizing the long-term consequences of short-term financial decisions. Throughout the hour, they address various listeners' financial dilemmas, offering actionable advice to help them navigate their challenges effectively.

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Caller Segment 1: Steve from Memphis, Tennessee

Timestamp: [00:30] – [09:01]

Situation: Steve reaches out in distress, grappling with substantial student loan debt totaling nearly $60,000. Compounding his financial woes, he accrued an additional $15,000 in high-interest payday and personal loans during a six-month unemployment period at the start of the year. Currently undergoing a divorce, Steve finds his spending spiraling out of control, seeking guidance to regain financial stability.

Key Points & Advice:

• Emotional and Mental Health: Rachel emphasizes the importance of rebuilding Steve’s self-esteem and confidence, which have been eroded by his financial struggles and divorce. She suggests finding "quick wins," such as securing any form of employment to restore his sense of purpose and control.

  Notable Quote:
  Rachel Cruze ([02:00]): “If you were to walk out of McDonald's with a paycheck, you'd feel a lot better and it would help you get moving.”

• Financial Strategy: Jade Warshaw advises Steve to prioritize securing a steady income before addressing larger debts. Rachel concurs, recommending that Steve focus first on maintaining his four essential financial goals: housing, car payments, utilities, and emergency savings.

  Notable Quote:
  Jade Warshaw ([05:12]): “Emergency fund and your four walls are your priorities.”

• Support Tools: The hosts offer resources like Ken Coleman’s material on career development and the EveryDollar budgeting app to help Steve organize his finances and plan his debt repayment strategy.

Conclusion: Steve is encouraged to take immediate, manageable steps to stabilize his income and gradually tackle his debts, ensuring he doesn't fall deeper into financial distress.

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Caller Segment 2: Libby from Tulsa, Oklahoma

Timestamp: [10:41] – [14:02]

Situation: Libby and her husband have successfully completed Baby Step Three by fully funding their emergency fund with $16,000. Libby is eager to eliminate their five credit cards to improve their financial standing but faces opposition from her husband, who fears that canceling credit cards will negatively impact their credit scores and future mortgage applications.

Key Points & Advice:

• Credit Score Concerns: Rachel explains that canceling unused credit cards can indeed impact credit scores due to reduced credit utilization, but Jade counters by sharing personal experiences where paying off debt and closing credit cards did not harm their mortgage prospects.

  Notable Quote:
  Jade Warshaw ([11:10]): “We paid off all the debt, zero credit score, got our mortgage, then our credit score returned and it was high.”

• Mortgages Without Credit Cards: Rachel adds that it’s possible to secure a mortgage through manual underwriting even without traditional credit cards, emphasizing that maintaining a good payment history on essential debts like a mortgage will support their creditworthiness.

• Encouragement: The hosts applaud Libby and her husband for reaching financial milestones and encourage them to continue their debt-free journey by focusing on their goals and utilizing provided resources.

Conclusion: Libby and her husband are advised to proceed with canceling their credit cards, relying on their strong financial foundation and focusing on paying down their mortgage to maintain and eventually improve their credit scores.

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Caller Segment 3: Joe from New York

Timestamp: [15:02] – [20:30]

Situation: Joe shares his experience of financial downfall during the COVID-19 pandemic, which led him to dip into his retirement funds and engage in gambling, leaving him with $50,000 in his retirement account. Now, at age 38, with $16,000 in savings and $170,000 in retirement funds, Joe seeks advice on balancing debt repayment with retirement contributions.

Key Points & Advice:

• Baby Steps Progression: Rachel highlights that Joe is on the path toward Baby Step Four, which involves funding 15% of his income into retirement accounts. She reassures him that his current contributions will accelerate his retirement savings.

  Notable Quote:
  Rachel Cruze ([17:08]): “You have a good couple of years ahead of you, but you need a plan. So stay on the line.”

• Retirement Planning: Jade Warshaw uses an investment calculator to project Joe’s retirement savings growth, illustrating that consistent contributions could result in $3 million by age 60 and $6 million by retirement at age 67, assuming a 10% return rate.

  Notable Quote:
  Jade Warshaw ([19:13]): “From age 38 to 60, that's 3 million bucks. And from 38 to 67, well, that's 6 million.”

• Debt Management: Joe is encouraged to continue contributing to his emergency fund while simultaneously funding his 401(k) to maximize employer matches, ensuring a balanced approach to debt repayment and retirement savings.

Conclusion: Joe is advised to maintain his dual approach of building his emergency fund and contributing to his retirement accounts, leveraging his current financial position to secure a robust retirement future.

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Caller Segment 4: Loretta from Alberta, Canada

Timestamp: [25:59] – [31:27]

Situation: Loretta is contemplating whether to rent a basement suite or purchase a mobile home in a trailer park amidst a job relocation. Her budget caps the mobile home purchase at $130,000, but she seeks advice on the financial implications and long-term viability of each option.

Key Points & Advice:

• Investment Perspective: Rachel advises against purchasing a mobile home due to its depreciating nature, recommending renting instead to allow flexibility and avoid tying up funds in a non-appreciating asset.

  Notable Quote:
  Rachel Cruze ([27:12]): “From an investment standpoint, I would not. I would definitely rent.”

• Cost-Benefit Analysis: Jade Warshaw emphasizes the additional costs of maintaining a mobile home, such as repairs, which would not burden Loretta financially if she opts to rent.

• Flexibility and Future Planning: The hosts suggest that renting provides Loretta with the flexibility to adapt to future changes, such as moving, without the financial strain of ownership responsibilities.

Conclusion: Loretta is encouraged to rent the basement suite to maintain financial flexibility and avoid the pitfalls associated with purchasing a depreciating mobile home, ensuring she can adapt to her new job and living situation seamlessly.

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Caller Segment 5: Hannah from Phoenix

Timestamp: [54:23] – [63:54]

Situation: Hannah and her husband recently became debt-free and are preparing to buy a house. Their lender offered them better interest rates if they can provide their own down payment, but this would leave them $2,000 short for additional expenses like a washer and dryer, utility deposits, and other costs. Hannah wonders if she should take out a small student loan or use credit cards to cover the buffer.

Key Points & Advice:

• Emergency Fund Utilization: Rachel advises using their emergency fund to cover the shortfall, emphasizing the importance of having a buffer for unexpected expenses post-purchase.

  Notable Quote:
  Rachel Cruze ([56:15]): “That makes me nervous that you're going in and buying a house. House.”

• Debt Avoidance: Jade Warshaw reiterates the importance of avoiding additional debt, suggesting that Hannah and her husband might need to delay the home purchase until they can fully cover all associated costs without incurring new debts.

• Financial Stability: The hosts stress the significance of maintaining a robust emergency fund to ensure that unexpected expenses do not derail their financial progress.

Conclusion: Hannah and her husband are encouraged to prioritize building a more substantial emergency fund before proceeding with the home purchase, ensuring they can handle all associated costs without resorting to additional debt.

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Caller Segment 6: Sam in Ohio

Timestamp: [107:00] – [123:56]

Situation: Sam discusses the financial strain in his marriage caused by his spouse's mismanagement of money. Despite a strong net worth of over $14 million, Sam's wife has been handling finances irresponsibly, including hiding a $20,000 windfall and neglecting joint financial responsibilities.

Key Points & Advice:

• Marital Financial Harmony: Rachel and Jade emphasize the importance of unified financial management within a marriage. They highlight that financial secrecy and misalignment can lead to significant marital issues.

  Notable Quote:
  Rachel Cruze ([121:07]): “This is a classic example, people say money fights and money problems cause divorce… It's a lot of deeper brokenness in this.”

• Counseling Recommendations: The hosts strongly recommend marriage counseling to address the underlying issues affecting both financial and emotional aspects of the relationship.

• Debt Snowball Technique: Despite Sam’s substantial net worth, the focus remains on mutual debt repayment and fostering a united front in financial planning.

Conclusion: Sam is advised to seek professional marriage counseling to reconcile financial discrepancies and rebuild trust, ensuring both partners align their financial goals and responsibilities.

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Caller Segment 7: Greg from Albany, New York

Timestamp: [107:03] – [125:52]

Situation: Greg contemplates branching out from his husband’s established automotive business to start his own auto business in a neighboring town. With a budget of $150,000 to $200,000 and considering the high costs of equipment and rents, Greg seeks advice on the financial prudence of such a venture.

Key Points & Advice:

• Risk Assessment: Rachel cautions against taking on significant debt to start a new business, especially when the existing business is still profitable and well-managed. She suggests exploring ways to enhance the current business’s profitability before investing in a new venture.

• Alternative Strategies: Jade Warshaw proposes starting the new business on a smaller scale or as a side hustle to minimize financial risk and build a client base without the immediate burden of high expenses.

• Financial Planning: The hosts recommend thorough financial planning and possibly postponing the business expansion until they can secure a more stable financial footing, ensuring it doesn’t jeopardize their current prosperity.

Conclusion: Greg is advised to carefully evaluate the financial risks of starting a new business and consider scaling gradually or enhancing the existing business to maintain financial stability and avoid overextending financially.

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Caller Segment 8: Christina from Baltimore

Timestamp: [117:08] – [125:52]

Situation: Christina confronts significant marital discord arising from her husband’s financial irresponsibility. Despite being debt-free and managing most household expenses, Christina discovered that her husband secretly received $20,000, exacerbating trust issues and straining their relationship.

Key Points & Advice:

• Trust and Transparency: Rachel and Jade stress the critical need for financial transparency in a marriage, emphasizing that hidden finances can severely damage trust and partnership.

• Counseling and Communication: The hosts recommend engaging in open communication and potentially seeking professional counseling to address the underlying issues and rebuild financial harmony.

• Debt Management: Despite Christina and her husband being debt-free, the hidden financial maneuvers by her husband highlight the necessity of joint financial planning and mutual accountability.

Notable Quote:
Rachel Cruze ([123:40]): “This is a classic example… It’s a lot of deeper brokenness in this marriage.”

Conclusion: Christina is encouraged to pursue marital counseling and establish transparent financial practices to mend trust and ensure both partners are aligned in their financial responsibilities and goals.

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Conclusion of Episode

Throughout this episode, Rachel Cruze and Jade Warshaw provide empathetic and practical financial advice tailored to each caller's unique situation. The overarching theme underscores the importance of avoiding financial shortcuts, emphasizing long-term planning, debt management, and the critical role of communication and transparency in personal relationships. By addressing these issues head-on, the hosts aim to guide listeners toward sustainable financial health and harmonious personal lives.

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Resources Mentioned

• EveryDollar App: A budgeting tool recommended for managing finances effectively.
• Ken Coleman's Material: Suggested for career development and finding purposeful work.
• Fairwinds Banking: Promoted as a supportive banking option for Ramsey fans (Fairwinds.org Ramsey).

Notable Advertisements Skipped:

• Sponsored segments by EveryDollar, Delete Me, Zander Insurance, Boost Mobile, Churchill Mortgage, Aldi, and others were excluded from this summary to focus solely on the content discussions.

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Final Thoughts

The Ramsey Show reinforces the idea that while financial setbacks are challenging, strategic planning, disciplined budgeting, and proactive debt management can pave the way to financial freedom and personal well-being. Listeners are encouraged to engage with the resources provided and seek personalized advice to overcome their financial obstacles.

Transcript

[Dave Ramsey]

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

[Rachel Cruze]

Live from Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruze hosting this hour with my good friend and the wonderful Jade Warshaw. And we will be answering your questions.

[Jade Warshaw]

That's right.

[Rachel Cruze]

About life, money, career, anything and everything. Give us a call. So kicking us off this hour is Steve in Memphis, Tennessee. Hey, Steve, welcome to the show.

[Steve]

Thank you guys for having me. I'm in one of those predicaments in one of those places where I just desperately need help. And a friend of mine said, hey, you guys were the ones to turn to. And so here's my plight. I've got a lot of student loan debt, close to $60,000. And back last year, at the beginning of the year, I was off work for about six months. And so I did the unthinkable and got a lot of high interest loans, you know, loan shark kind of loans the places. Yeah, the worst.

[Rachel Cruze]

And it's hard to get out of that cycle too because of how high the interest is and everything.

[Steve]

And the interest was just astronomical. And it was, you know, just trying to put a band aid on a gunshot wound and it didn't help. And now I'm currently in the process of a divorce and my spending is out of, out of control and I'm just trying to get my life straightened out. And, you know, I'm trying to start with the finances and the family and looking to you guys for some help.

[Rachel Cruze]

Man, it's a lot. Steve, how long were you guys married?

[Steve]

Six years.

[Rachel Cruze]

Oh, wow. Kids involved?

[Steve]

No.

[Rachel Cruze]

Okay.

[Jade Warshaw]

What, what kind of work were you doing before you lost your job and had that stint of being out of work?

[Steve]

Police officer.

[Jade Warshaw]

Okay, and what are you doing now?

[Steve]

Nothing at the time.

[Jade Warshaw]

Okay, so you still haven't been able to turn that around. How old are you?

[Steve]

51.

[Jade Warshaw]

So what caused you, what happened with the police officer deal? What caused you to not get another job in that field?

[Steve]

Just having, I think possibly a lot of the psychological part of it in the environment that we're in nowadays with law enforcement just, you know, trying to do something different.

[George Camel]

Yeah.

[Jade Warshaw]

So you don't want to be in that field anymore? Basically.

[Steve]

Basically, I said. Yep.

[Jade Warshaw]

Okay.

[Rachel Cruze]

So, Steve, one thing about your situation, I would say, and we see it's very common and not to stereotype with gender, male and female, but especially for men, your self esteem is probably at the lowest. It's been, I would assume, in a long time because the providing side of you is nonexistent. The relational side is in a mess as you're going through a divorce. And so there's things in this, Steve, and in this situation, not only from the financial side, which we'll dive in because we want to help there, but just know from your overall health as a person, getting some, some of that, that identity back in you is going to be important in this and building back some confidence is going to help propel you forward because it's kind of like everything has just been stripped from you, you know, slowly but surely. And that I'm assuming, has kind of eroded what you think about yourself. I'm like, that is the formula. Yes. Of just depression and sadness. I mean, like there's just, there's not a lot of hope is what it feels like. But there is, there can be hope. Like that's what I'm saying is I think you can turn the corner. But there, there's turning the corner financially, but also just for you, Steve, of finding these quick wins. So even finding some level of work, not only to bring in an income to pay the bills, but even just for the good of you, just to have some, something that you have to leave the house, you have to go do a task, accomplish something and come home, like bit by bit, those also help and just who you are as a person.

[Jade Warshaw]

Are you getting, are you talking to anybody, Steve? Are you seeing, talking to a counselor or.

[Steve]

I am.

[Jade Warshaw]

You are. Okay, good. That's, that's excellent. And I think that's really going to help with the areas that, that Rachel highlighted because that's something that's going to take. Yeah. Time and conversation and some real work in your day to day life. But on the money side of things, let's, let's see if we can help you there a little bit. So you've got the 60,000 in student loans. How much in that payday and personal loan deal do you have?

[Steve]

Right. At 15,000.

[George Camel]

15.

[Jade Warshaw]

Are you current or is anything in default?

[Steve]

It's in default. Those are charges.

[Jade Warshaw]

They're. Oh, they're charged off, so they're, they're not coming for you anymore. Okay, and is that it? Do you have a car? Are you getting around any, Any?

[Steve]

I have a car and it's two months behind right now.

[Jade Warshaw]

It's two months behind. Okay. And tell us about your living situation.

[Steve]

I rent.

[Jade Warshaw]

Okay. And is that current?

[Steve]

It is right now, yes.

[Jade Warshaw]

Okay, so here's. And you know this, I'm not going to tell you anything you don't know, it's really hard to live with no income. And until, until you say, I'm going to do something, there's not anything that we could do to change this free today. So are you doing anything to bring an income?

[Steve]

I've ubered some and doing the, you know, that's minimal income, just kind of day to day stuff.

[Jade Warshaw]

But nothing that you're putting 40 hours of effort into?

[Steve]

No.

[Jade Warshaw]

Yeah, I can hear it in your voice and I'm sorry for you. I can hear that you're just not motivated. But you called us and that does show that there's some light of hope there. And if I were you today, because here's the thing. Before you were, you know, a police officer, you had your wife, you had your kids, you, you had this life. But there is something that work can provide, even if it's a job that you don't want to do. And it can provide something for you to do that it can provide for you to get up, get out of your sweatpants, you know, put, put a nice shirt on, brush your teeth, you know, and go somewhere and then it'll start to build up that confidence in you. Because here's what I don't want to happen, Steve. The longer that you wait with no job, the more your confidence will start slipping and slipping. So today, go over to Target, go over to Walmart, go over to Applebee's, go, go anywhere, I don't care. Go into McDonald's and dress yourself nice, brush your hair, do all of that stuff, look as good as you've looked in a year and go in there and get a job and you're going to walk out of there feeling like, feeling much better. And when you get that first paycheck, you're going to feel a lot better. And that's going to help you, you know, get moving. Yeah.

[Rachel Cruze]

And that's for the short term, Stephen. We'll hook you up with some of Ken Coleman's material because he has two incredible books just about how do you find the work that, you know, you're wired to do? What are the things about you, Steve, that are innately like how you were created also situationally, the people you know around you, like, all of, like, there's some things that can happen in life that for the next 30 years, Steve, until you, until it's 80 year old, Steve, we're talking to, this could be the next best decade or two of your life. That's right. And you have to make that decision. And so for the short term, exactly what Jade said. You have to be bringing in an income. And then you want to cover your four walls. So you want to keep food on the table, you want to keep that rent paid. I don't want you getting behind on that. I want you to catch up with your car loan and get current on that and then make sure all your utilities and everything. So those are your four goals, month to month.

[Jade Warshaw]

And then don't worry about the student loans right now.

[Rachel Cruze]

That's right. And then beyond that, which may take you, you know, it's probably going to take you, I don't know, two to three months to kind of get to that. So by mid, mid fall, Steve have a goal to say, okay, now in October, I'm gonna start, start working my way out of debt, which is these payday loans, all of this start there and then be tackling the student loan debt. So you have a good couple of years ahead of you, Steve, but you need a plan. So stay on the line. And our team's going to pick up and we're going to give you Ken Coleman's material. We're going to throw in the EveryDollar app as well so that you can start getting on a budget and knowing where your money, the new income that you're going to make, Steve, where it's going to go. And we believe in you. You can do this. You can do this.

[Ken Coleman]

Okay, Rachel, the Internet officially knows too much about all of us.

[Rachel Cruze]

So much, George. I mean our names, our addresses, even our relatives names. And what's crazy is even if you opt out, data broker websites can still get your info.

[Ken Coleman]

Don't like that. And just a year ago, get this, the average person had about 300 pieces of personal data floating around online. Now it's over 600. It has doubled in a year.

[Rachel Cruze]

You guys, that is so concerning. Because that info then can be used in phishing, scams, impersonation, and even harassments. That's why George and I both use and love Delete Me.

[Ken Coleman]

Yes, Delete Me scrubs your personal info from hundreds of these data broker sites, not just once, but all year long. And there's real privacy experts behind the scenes doing this, not bots. So this is digital hygiene. We all need.

[Rachel Cruze]

We all need it. And then they will send you a detailed report showing exactly where they found your data and what they removed. And you can even request custom removals if you have something specific you want them to look out for.

[Ken Coleman]

Exactly. And this is not being paranoid, this is staying protected. And so far, Delete Me has removed my info from 240 listings and saved me 94 hours of time it would have taken me to do it.

[Rachel Cruze]

I love it. And you guys, in a world where strangers can Google your grandma and get enough info to scam her in just two clicks, delete me gives you peace of mind.

[Ken Coleman]

Yes. So go to joindeleteme.com Ramsey for 20% off. And that discount brings their annual plans down to about nine bucks a month. So go check it out. Joindeleteme.com Ramsey.

[Rachel Cruze]

Up next in Tulsa, Oklahoma, we have Libby on the line. Hi, Libby. Welcome to the show.

[George Camel]

Hi, guys. Thank you for taking my call.

[Rachel Cruze]

For sure. How can we help today?

[George Camel]

So I just need to settle a debate with my husband.

[Rachel Cruze]

We love debates.

[Jade Warshaw]

We do.

[Rachel Cruze]

This is great.

[George Camel]

Yes. So we just finished up. We actually wrote our last check to do our emergency fund on Sunday. So we are fully done with baby step three.

[Rachel Cruze]

Oh, wow.

[George Camel]

I am ready. Yeah. So I am so ready to cut up these credit cards. We don't use them. We have five of them and just cancel. But my husband is so skeptical because we've always been taught the high credit score. I mean, that's what you're supposed to have. And we're still so young. I'm 23. He's 26. And we have a mortgage right now. But of course, it's not our home that we want to be in long term. So, you know, maybe in like, three, four years, we're going to want to move. And so I think that's maybe his worry, that without a credit score, you can't buy a mortgage. But I try to tell him, I was like, hey, we're going to have a credit score with our current mortgage now. And then once we get into a home, you know, we'll like, aggressively pay it off, and then we'll have no credit score. Like, I'm so content with it. But he is very iffy and just.

[Rachel Cruze]

Scared, which is, I'll say this, Libby. I don't know if you guys are considered Gen Z, but it's a very normal Gen Z slash millennial thought process. So your husband's not crazy. All the things. He's just misinformed and doesn't have all the information.

[Jade Warshaw]

And even if you don't know anybody who did it, it's like, yeah, it makes it even. It's like, I never. None of my friends have ever done this. My parents have. You know, and I, I will say, you know, what you're saying is 100% accurate, though. You can. And it will be that way. If you have a current mortgage now and that's your only line of credit at first, when you first pay things off, you might see it dip, but over time it does kind of jump up again. My husband and I were in that same boat. Paid off all the debt, zero credit score, got our mortgage, then our credit score returned and it, it's high. And then when we went to buy our second house, obviously since we did have a credit score, it was based on that and it was totally, totally fine because it was just the only trade line. And you know, you pay your mortgage every single month. And so it is. It was still in the seven hundreds or whatever it's supposed to be. So I think the best thing you could do is really a person like that if you can just show them the information you find or show them.

[Rachel Cruze]

The math and even Libby. Oh, sorry, Jade.

[Jade Warshaw]

No, that's okay. That's all. That was all.

[Rachel Cruze]

Well, even if you guys didn't have a credit score, you could still get a mortgage with manual underwriting. So there's still a way to get a mortgage without a credit score. Because mortgages are the one type of debt that we would say like there's parameters, but it's a reality for most people. And so, and let me. The truth is if he kept the credit cards open, I think it will actually ding.

[Jade Warshaw]

You don't use.

[Rachel Cruze]

So. So then he's going to say, hey, let's use them. Even though it's the quote unquote, probably pay it off every month mentality, which so many people have. But the truth is you're still going to be in relationship with credit cards like that. That's the. So you would do. You would be better off just paying your mortgage on time, closing the credit card accounts, getting rid of them and just having that line of credit through, I mean meaning through, through your mortgage. That that's what it's calculating. So yeah, we're on your team Libby, but thank you.

[Jade Warshaw]

Yeah, yeah, Libby, we are.

[Rachel Cruze]

We're on team Libby. And if you hold on the line Libby, we'll give you George Camel's book to be able. It's called Breaking Free from has a whole chapter dedicated to this. And I think your husband would love to read it. George is like one of the best at just like making money kind of fun and relatable and especially in this book, these topics. I think your husband would appreciate it. So we're going to send you that book. You guys read that chapter. Read the whole book. But read that chapter Together. And it's kind of a line in the sand for sure. When you say, hey, we're not going to use debt.

[Jade Warshaw]

Like, this is.

[Rachel Cruze]

This is part of the game.

[Jade Warshaw]

And you guys are really over the hump, too. Like, I feel like you're in baby step four.

[Rachel Cruze]

Yeah. Don't.

[Jade Warshaw]

Don't get me wrong. Like, you need to cut up your. Your credit cards instantly, but I know, you know, folks keep it around during baby step two. Baby, they still are. Like, just in case, Jade. I'm like, don't do it.

[Rachel Cruze]

Yes. But at this point, y'.

[George Camel]

All.

[Rachel Cruze]

Yeah, yeah. You have an emergency fund? Sure. Good. You're good. All right, let's go to Joe in New York. Hey, Joe. Welcome to the show.

[Steve]

Hey, ladies. Thanks so much for taking my call. First time caller, longtime listener. Appreciate what you do.

[Rachel Cruze]

Awesome. Thanks so much.

[Steve]

Like, yeah, just to give you, like, 30 seconds of quick context, I was doing really well. I had a nice little nest egg. And then right around when Covid hit, I had a pretty rough season of backsliding where I actually dipped into my retirement and lost a lot of that through, like, gambling and a lot of really stupid things and squandered a lot of money. And very grateful to say that I have not gambled in many, many years. And not only that, but, like, I no longer have the desire to. So good. But I was down to Basically my last 50k in my retirement. And in a city like New York, that's not exactly a ton. Now I'm on baby step three, building up the three to six months of emergency fund. I have about 16k in savings and about 170k in retirement. And at this point, I've basically been contributing to the emergency fund. I really want to get to 6 months while also simultaneously funding my 401k to get that company match that I currently am able to take advantage of. So my question is basically, should I continue to be doing these both at the same time, or should I focus on one at a time? And then also, is 170k good for retirement currently at age 38, which I currently am, because I read recently that it should be about 2 to 3 times your income at age 38. And I make about 130k per year. So I just want to get your.

[Rachel Cruze]

Well, I would say on that end, when we get to baby step four, you'll be funding 15% of your income to retirement, which is almost double what the average American contributes anyways, because most Americans don't have the margin to contribute 15% because they have debt. So that's why the baby steps are in the order they're in where you eliminate debt, have some padding of that emergency funds and then you actually have margin in your Life to fund 15%. So regardless of whether it's good or not, you're going to catch up so quick because it's 15% that you're going to be contributing. So are you single, married, kids single currently?

[Steve]

Would love to be married at some point, but sure.

[Rachel Cruze]

Okay, so 16k for you. What would be a three month emergency fund for you?

[Steve]

It's actually right around three months right now. It gets to about 25 to 30k.

[Jade Warshaw]

And what's your income right quick?

[Steve]

About 130k, give or take with bonuses and stuff.

[Rachel Cruze]

Okay, I'm going to say this, Jade, have a different take than me, okay. If you, if you have a different opinion. But because you are single, Joe, and you're, and it sounds like you have a pretty solid income, you know, you don't have, you know, multiple people that are dependent upon your income. That's where I normally tell people, three months because it says three to six months. So that range, you're kind of in the three month range to me says now that you have three months, I would be okay with you going ahead and contributing to retirement 100%. And if you had some margin, you could continue to throw it at the emergency fund. But if you were married with three kids, you guys had private school, you're paying like you had a big, I agree, a lot of dependence. I would would say don't fund retirement, get to that six months quickly and then fund retirement. But where you are in your stage of life and circumstances, I'm good with 16k. If that's three months for you, I'm good with that. And then I would, I would be funding retirement and then any extra margin you have for any more padding in the emergency fund, just throw at it.

[Jade Warshaw]

Joe, did you say you're 38? What? How old did you say you were?

[Steve]

38.

[Jade Warshaw]

Yes, 38. Okay, good news. I bring good tidings. So I was just playing around with the math. I was listening to what you said. You said you have 170,000 in your retirement right now. So I just plug that into an investment calculator. And then let's say you're putting away 1600 bucks a month, 15%. Does that feel right? And then let's say rate of return 10%. You should be getting that in good growth stock mutual funds. So let's say you Just put that amount. Your. Your income never goes up. Nothing ever changes. Let's say you do that from age 38 to age 60. That's 3 million bucks. And then let's say you keep going until, you know, age 67, like fully retired, that's 6 million. That ain't bad.

[Steve]

Right.

[Rachel Cruze]

And that's with it not increasing your income is going to increase in your 40s and 50s, which means that 15% is going to be more dollars going in.

[Jade Warshaw]

And I know you're in New York City, but you get the idea here.

[Rachel Cruze]

Five to six million. Does that feel right for you for retirement?

[Steve]

It feels great. Yeah. And that's why I was questioning that thing I read where it said it should be.

[George Camel]

Yeah, I know.

[Rachel Cruze]

I see that stuff too, Joe, honestly. And I think it's. That's so subjective to me.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

Because again, majority of Americans are only funding 4, 5, 6% of their income. They're not funding 15%. And so they're doing math on a small percentage of investing compared to a salary. You know what I mean?

[Jade Warshaw]

Yeah, I do. And I actually think it's better to look at your rate of return and say, hey, if I can pull what I'm gaining off of this and not touch the nest egg and live off of that, I feel like that's a better framework of thinking. So if you can live off of, I don't know, 8%, which is better, which is lower than your rate of return, then you're, you're winning.

[Dave Ramsey]

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

[Ken Coleman]

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

[Dave Ramsey]

That's a gut punch.

[Steve]

And.

[Ken Coleman]

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

[Dave Ramsey]

Me, too.

[Ken Coleman]

They don't know what to do next.

[Dave Ramsey]

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

[Ken Coleman]

That's exactly.

[Dave Ramsey]

These are the two options. And take care of your dadgum family, man.

[Ken Coleman]

Term life insurance can replace, pay off debts, cover funeral expenses. So your family can actually have the opportunity to just be sad.

[Steve]

Yeah, to just miss you.

[Dave Ramsey]

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

[Rachel Cruze]

Buying or selling your home, it's a big deal. And with all the clickbait headlines and conflicting data out there, it's really hard to know what's actually reality when it comes to the housing market. And so we're here to make the latest trends easy to understand. So the median home prices have stayed safe, steady in the last month around $441,000. And the number of homes for sale hit 1 million for the second month in a row. So buyers now have more options, more negotiating power while sellers are facing more and more competition. So we're seeing it kind of that be the market, which is great. Again, if you're trying to get in, there's a lot of people out there that are trying to be first time home buyers. You have some leverage, you guys, to go in and negotiate. So the average 15 year fixed rate has held steady at 5.95% since last month. And again, if you are debt free, you have fully funded emergency funds and at least 5% for a down payment. Go ahead and get into the market. Owning a home and homeownership should be part of your financial plan. So if you do want to see more about these market trends and get some free tools, if you're wanting to buy or sell your home, go to ramseysolutions.com market or if you are listening on podcasts or YouTube, we'll put the link down below or in the show notes so you can check it out. But this is, yeah, homeownership is something that a lot of people want in and it's obviously very expensive. It's just gone up. But when you see this as a buyer, like there's some good things there, right? I think there is. Average days on the market right now I think is like 59 days. It's almost getting to two months. And so some things are just stabilizing. We keep seeing. And so again, it's kind of becoming a buyer's market. So get in there.

[Jade Warshaw]

And that's good.

[Rachel Cruze]

I down.

[Jade Warshaw]

I'll say, you know, whenever I post about housing, Rachel, on Instagram or social. Yeah, it's the one thing that if I post, I get. Usually folks are on my side. If I post that, it's like, jade, you're out of touch. You don't know what you're talking about. I just feel like we can, we need to reframe. Like, I just want to take a moment and say, like, when we're saying you can get in the market, if we're saying, hey, 25% of your take home, like, no, we're not saying this to keep you out of buying a house, and we're not saying it to discourage you. We're simply saying, hey, if you get in a house, we want to make sure that it's something that you're going to be able to afford long term, that it's something that's going to be a blessing to you. Because how many times, Rachel, do people call in, they've gotten into something that's they can't afford it and, oh, 100%, you know, or go ahead.

[Rachel Cruze]

Well, the problem, too is you sit down with a mortgage lender and the number they show you of what they quote, unquote will give you to borrow, you're like, wow, give you 50, that's amazing. And then you go and go on Zillow and start shopping with that number, and you're like, oh, my gosh, we're out. Yes. Our formulas, they are more conservative, which means your home's going to look a little bit older and probably more conservative than what the bank would do. But again, we want you to have margin and peace in your life. And when you get that, when your rent or mortgage starts crossing that 40% into 50%, and then we get this all the time. The health scare happens.

[Jade Warshaw]

Yes.

[Rachel Cruze]

Someone wants to stay home with the kids and go down to one income. Like, it locks you into a lifestyle where there's no flexibility. So, again, expectations are going to look different than they would have been in 2019.

[Jade Warshaw]

But that might be a townhouse.

[Rachel Cruze]

Yes. I mean, yes. Or you're going to drive 15, 20 minutes further out. Or it's going to be a house that doesn't have the brand new nice kitchen, or it's not a new build or whatever it is. It may look different, but I would rather it look different than my expectations.

[Jade Warshaw]

And have peace and you're in the.

[Rachel Cruze]

Market than get something that I can't I. I have no wiggle room in my lifestyle, and I'm locked into this idea of, like, this is what we make and this is what we can afford. Yeah. So.

[Jade Warshaw]

And what's on social media is not reality, by the way.

[Rachel Cruze]

Yep.

[Jade Warshaw]

Amen reminding.

[Rachel Cruze]

Amen. Hallelujah. Lord have mercy on our souls. All right, let's go to Lori. Ooh. In Alberta, Canada. Up there in the north. Hey, Lori, welcome to the show.

[George Camel]

Hi, ladies. Thank you so much for taking my call.

[Rachel Cruze]

Absolutely. How can we help today?

[George Camel]

Sure. My question would be, should I opt to rent a basement suite or should I purchase a mobile home in a trailer park?

[Jade Warshaw]

Basement suite. Can I say. Oh, when you said trailer park, what was it? Out in the woods?

[Steve]

No.

[George Camel]

So I'm currently. I have a job opportunity that would require me to move to a location I used to live in. And so it would be in the city. It's a small, small city, but the trailer park is right smack in the middle of it. So it would be close to amenities and everything and quite close to my job. So it would be very convenient. But at this point, a mobile home in a trailer park is kind of all I can afford. I kind of aimed at my highest purchase price being 130k based on my budget.

[Jade Warshaw]

How safe is that, though? That feels unsafe to me. Am I wrong? I might be. I don't know.

[George Camel]

I mean, you'd be surprised. Sometimes it can be safe, and especially if it's in the middle of the city, I'm not as concerned for my safety, so. And yeah.

[Rachel Cruze]

Yeah. From an investment standpoint, Lori, I. I would not. I would definitely rent.

[Jade Warshaw]

Basement rental. Yes.

[Rachel Cruze]

Yeah. Buying that, usually it's going to go down in value. You're buying an asset that's not appreciating, it's depreciating. And so being able to take your time, get into the market a little bit. But I would rent until now for sure. Do you think you'll be in that city long term?

[George Camel]

That's the idea. And I'm looking for a bit of permanence. And renting has always really scared me, even though it does provide a consistent rent payment. I'm not under any illusion that the mobile home would appreciate in value. It would really just be a place for me to just kind of lay low and hunker down until I can purchase something that would be more beneficial, investment wise. So, again, it's really good for that. Permanent and also flexibility.

[Rachel Cruze]

Sure. So I would. Yeah, the permanence thing can come. I would say give yourself some Time be patient with that. And then also renting is not bad. And I feel like renting gets such a negative connotation. But to me, with having a plan, not, not saying I'm going to be a renter for the rest of my life, but I'm going to rent for a season until X, Y and Z. You can fill in the blanks there. It's a, it's a, it's a sign of patience for me. Like when people say we're renting, I'm like, yeah, there's something about it not being permanent that's great. So you can actually save up and get what you want. That is.

[George Camel]

Sure.

[Jade Warshaw]

And there's still the, the, the cost of maintaining the mobile home. Right. It's. That is more keeping with buying a home. Because what happens if something happens with the, I don't know, whatever the plumbing setup is, what happens if something. You're on the hook to have to repair those things, Whereas if you're renting, that's something that's going to fall on your landlord to take care of. So there's part of that too, where I feel like you're going to end up saving money long term, not just on repairs, but also the depreciation. That's not going to fall on you.

[George Camel]

Okay. Yeah. And then those have been things I've kind of thought about and, and whatnot. But I thought I'd get your guys's perspective on. On that.

[Rachel Cruze]

Yeah, absolutely. Well, thanks for the call, Lori. And Yep, again, for sure. I would, I would rent. That's what I would do.

[Jade Warshaw]

You know, there's, there's camper and like, mobile home folks, like, people call in and a lot of times that's what they want to do. And I, I get it, but I don't get it. Like, it's just, it's going down in value.

[Rachel Cruze]

That's all I can say for sure. And having something that is stable, it may not feel permanent, but at least you know that you take a bunch of money.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

That you're gonna end up losing. Right. That you're actually kind of staying more in the positive.

[Jade Warshaw]

Yes.

[Rachel Cruze]

Financially is the goal. And, you know, it's a new job, which is great. And I know you said you used to live in that town, so you're familiar with it, but for a lot of people that are moving, the transit world, Jade, I feel like people are moving constantly for jobs and they're, you know, going across country and all of it. So you guys, if you are someone that is moving to a New area rent even if you can't afford a home, like I would say, yeah, for a year. And if you think you know the area of the city you want to live in, just rent for a year and make sure, okay, this is what we like. We like the areas, we like the school, we like the community. Because some people, they kind of just pick a city and they pick a place and they're like, here, we can afford this, let's just do this. But give yourself patience. And again that's what renting does, especially if you're in a season of transition or there's something new happening. Just have the patients in rent for nine months to a year and then you can look at buying.

[Jade Warshaw]

You get to see what that side of town is like all throughout the year. Right? You might learn something that you're like, oh crap, this is like right where the airplanes fly over. Or you might learn, you know what I mean, you might learn those, that, those sorts of things. So that's very, very valuable.

[Rachel Cruze]

And it is hard, Lori, I think, you know, having the patience and what we're talking about at the beginning of the segment, even with the housing market, it is hard in today's world. Like it takes a lot of maturity to delay gratification even with a big purchase like a home. And I'm telling you guys, the more you can practice that and just have that patience, have that longer timeline, you're going to get what you want and in a really peaceful way. That's not locking you into something that, where you have no options if you want to change something about your life. So that's our goal.

[Jade Warshaw]

I rented for 10 years before I.

[Rachel Cruze]

Bought Looky there, worth it. And you're, you're alive. Look at you.

[Jade Warshaw]

I'm living. I'm alive and well.

[Dave Ramsey]

If your phone bill is more than $25 a month, either you're okay setting money on fire or you're just paying attention. That's because the big three mobile providers have hidden fees and so called customer service that ignores you when things go wrong. Boost Mobile is different. Boost gives you unlimited talk, text and data for just $25 a month. That's it. No games, no junk fees, no oops, your price just went up. And they've got a 30 day money back guarantee just in case you decide you love paying way more somewhere else. So switch [e-mail] Ramsey restrictions apply. See boostmobile.com Ramsey for details.

[Rachel Cruze]

One of the best things that you can do to help us and let's just say help the world is to make sure to, like, subscribe and share the show with your friends and your family. Because the truth is, this is why we get up every day to do and talk about your life and your money, and we want to help people. And the more the word gets out, hopefully, the more people get encouragement in their own lives and some direction. And one of the areas of their life that a lot of people need direction is when it comes to their purpose, when it comes to their career, their jobs, and one of the best people on the planet. We actually gave his book away in the first segment.

[Ken Coleman]

Oh, thank you. My kids need new shoes.

[Rachel Cruze]

Yes.

[Ken Coleman]

Oh, that's right. I missed that part. It's the promo indirect money we gave it.

[Rachel Cruze]

Yes. It's Kate Coleman. And he was walking by the studio literally just now, and we were like, ken, come in for a segment. Because we saw on the board, the next call has to, you know, do with jobs and all this.

[Ken Coleman]

Brush my teeth today.

[Jade Warshaw]

Listen, you got the Outsiders vibe going on. You got the black.

[Ken Coleman]

I know this is as casual as you'll ever see me on the show because I was not planning on James calling me in from the bullpen, but look at that.

[Jade Warshaw]

Glowing. Come on, Ken.

[Ken Coleman]

I'm getting a lot of vitamin D these days.

[Rachel Cruze]

That's what we need this summer. All right, well, let's see.

[Jade Warshaw]

By the way, real quick.

[Ken Coleman]

This is America's greatest combo right here. I mean, female power is just exploding off of you. I said this to you all when I walked in.

[Rachel Cruze]

Yeah.

[Ken Coleman]

I said, if I was a fan of the show, this duo would be my favorite.

[Jade Warshaw]

Wow. That means something.

[George Camel]

I'm.

[Ken Coleman]

I got to tell you, I. I am woman. Hear me roar. I feel that.

[Jade Warshaw]

No, so we are woman.

[Ken Coleman]

I know, but that's the phrase. I am woman.

[Steve]

Hear me roar.

[Ken Coleman]

These are the two women that correct me almost as much as me as my wife.

[Jade Warshaw]

That's right.

[Ken Coleman]

This is what I'm used to.

[Jade Warshaw]

Actually, Stacy won't mind.

[Rachel Cruze]

We had dinner together last Friday night with the spouses and Stacy. Yeah, we. We felt definitely.

[Ken Coleman]

By the way, if you want to see my dinner outfit, go to my Instagram page at Ken Coleman.

[Jade Warshaw]

Listen, after this, you're not prepared for.

[Rachel Cruze]

It, we'll pull it up on you.

[Jade Warshaw]

Who want to win? Yeah. Throw it on there.

[Rachel Cruze]

If they can get it. His golfing outfit.

[Ken Coleman]

It's next level.

[Rachel Cruze]

Which actually appeared in Happy Gilmore 2.

[Ken Coleman]

Didn't know that.

[Rachel Cruze]

It's in the movie, so. All right. All right, let's go to Tyler in Houston, Texas. Hey, Tyler. Welcome to the show.

[Steve]

Hey, guys, thank you so much for taking my call.

[Rachel Cruze]

Absolutely. How can we help?

[Steve]

Yeah, so I recently just got married and moved into a new home with my wife. And I got a job offer recently as well. That would be a 35% payback. And yeah, so it's exciting. However, my wife does not want me to take it. So I think that we don't have any debt right now, for context. And I do enjoy what I do right now. This other opportunity I think I would enjoy as well, but I don't know.

[Ken Coleman]

Why doesn't your wife want you to take it?

[Steve]

It's a pretty far commute.

[Ken Coleman]

How much?

[Rachel Cruze]

How far?

[Steve]

Which.

[Jade Warshaw]

About an hour each each way.

[Steve]

So. Yeah.

[Jade Warshaw]

So an hour in the morning to get there, an hour coming back home.

[Ken Coleman]

Wow, that's rough. Do you guys have littles.

[Steve]

Yeah.

[Ken Coleman]

Little kids running around the house? No kids.

[Steve]

Nope. Nope. No kids.

[Ken Coleman]

So first of all, personally, I would never sign up for a two hour commute that gets old really fast. No matter how great the is and how great the money is, that gets old fast. It's a quality of life issue. But what is her just to dig a little bit more. What is her specific reason as to why she doesn't want you to take it? Understanding the commute? What is she. She worried about? Less time with you?

[Steve]

Yeah. Okay. I think that. Yeah, Yeah, I think that. I mean, we've done distance our whole relationship. So just now.

[Rachel Cruze]

And y'.

[Steve]

All.

[Rachel Cruze]

How long have y' all been married?

[Steve]

I think that my. Oh, very. Like less than a month.

[Ken Coleman]

How sweet. Ye.

[Rachel Cruze]

You know.

[Steve]

Yeah.

[Ken Coleman]

She might change her answer a couple of years from now. Who knows? Okay, a serious question. Does this job. We know that it's a 35% pay bump, but does it also move you significantly up the career ladder that you want to climb?

[Steve]

So that's tough, right? Because I'm in consulting right now and what I would be going into is an internal role and it's a manager position. And so it does move me up. But I think that I can also make the case to stay at my current job because it's like I am getting a lot more experience probably here.

[Ken Coleman]

Okay, great.

[Steve]

So let me ask another one if that makes sense.

[Ken Coleman]

It makes total sense. If the money was the same, would you even be considering this opportunity?

[Steve]

No.

[Ken Coleman]

Okay, so the current job has actually got you more positioned long term. Ladies. I think this is an easy one for me. Wifey's not happy about it. New wifey. New wifey.

[Rachel Cruze]

Okay, this will be fun. Let's Do a game on account. You do it on account of three.

[Ken Coleman]

What is our answer, yes or no?

[Rachel Cruze]

Take the new job. So take it or pass?

[Ken Coleman]

Say leave or pass.

[Jade Warshaw]

Oh, pass.

[Rachel Cruze]

Pass.

[Ken Coleman]

Take it or pass?

[Rachel Cruze]

Take it or pass?

[Ken Coleman]

All right, count us down.

[Rachel Cruze]

Okay, ready? One, two, three.

[Steve]

Pass.

[Rachel Cruze]

Yeah.

[Ken Coleman]

This is rare, by the way.

[Rachel Cruze]

Tyler, we're all in agreement.

[Ken Coleman]

I'm only disappointed that Jade didn't harmonize there.

[Rachel Cruze]

Pass. But.

[Ken Coleman]

But if I. If I could just give you the. As to why. Number one, new wife. She's not thrilled about it. That's. That's one good reason. Two, it's two hours of commute every day that's going to suck the soul right out of you into the vents in your car. And three, it doesn't actually get you ahead. If we look 10, 15 years down the road. That's why we're all so.

[Rachel Cruze]

Yeah, it's the 35% bump and you have.

[Jade Warshaw]

But he has no debt.

[Ken Coleman]

You have to consider it.

[Rachel Cruze]

Yeah, yeah.

[Ken Coleman]

Oh, that's a good point, Jade. He doesn't really need it.

[Jade Warshaw]

Yeah, he has no debt. There's nothing on fire here.

[Ken Coleman]

Just curious, do you expect to get a bump in. In the days ahead, months ahead, year ahead, where you currently are if you stay on this track?

[Steve]

Yeah, yeah, yeah. I just. I just got a promotion and I. I think that.

[Jade Warshaw]

Good for you.

[Steve]

Generally, it's. It's looked like my peers. My peers have been getting pretty decent raises year over year.

[Rachel Cruze]

Tyler, how old are you?

[Steve]

I would feel 24.

[Rachel Cruze]

Okay. All right.

[Ken Coleman]

Question for the ladies. I got. So, Tyler, listen up here. This is huge.

[Rachel Cruze]

It's a great ego boost, by the way.

[Ken Coleman]

It feels great.

[Rachel Cruze]

No one's gonna pay me this much. More like.

[Jade Warshaw]

Yeah, you got.

[Rachel Cruze]

Considering I'm great.

[Jade Warshaw]

Yeah, yeah. You gotta roll it around.

[Ken Coleman]

So, Tyler, pay close attention here. I'm gonna get some expertise from two married women here. He's 24. They've been married a month. How does he reveal this. This decision to his wife? We know what she wants. Any kind of brownie points he can get out of this deal.

[Rachel Cruze]

Brownie points? Manipulate the situation.

[Ken Coleman]

Manipulate.

[Rachel Cruze]

Make him look better.

[Ken Coleman]

No, no, he's just gonna tell her. Why so cynical?

[Steve]

I don't know.

[Ken Coleman]

Come on, give this guy some tips on how to share this information. His wife's going to be thrilled.

[Jade Warshaw]

Okay, I'll go first.

[Ken Coleman]

Thank you, Jake.

[Jade Warshaw]

I love if. I've talked to Sam Warshaw about something, and I know that he is really thought about it. Like, he's really thought it through.

[Rachel Cruze]

Yeah.

[Jade Warshaw]

It wasn't Just. All right. We'll just do what you want to do or like what? I love knowing that. So I think if you just share with her. Hey, honey, I thought about what you said, and I even went to the extent of calling some professionals, and I called in this show. Let's just say you're right.

[Ken Coleman]

Marvin Gaye.

[Steve]

Whoa.

[Ken Coleman]

Wow.

[Jade Warshaw]

Let's get it on.

[Ken Coleman]

Oh, boy, it's hot in here all of a sudden.

[Jade Warshaw]

I'm just saying.

[Steve]

A little warm.

[Ken Coleman]

A little warm.

[Jade Warshaw]

That's romance, right There.

[Ken Coleman]

It is. Thank you for understanding what I just said.

[Rachel Cruze]

And you know what? And I'll say that, Tyler, I think Jade is exactly right. Cause it's not this, like.

[Ken Coleman]

Ah, see?

[Rachel Cruze]

It's not that this. Okay, if you don't want me to, I won't. There's. There's something attractive about saying, hey, I've put my own thoughts to this.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

I've kind of calculated what do I want? And then as I match it against what. What my wife says, and scripture is very clear about having a wife that is wise and listening to her. There's a reason that it. That it talks about that.

[Jade Warshaw]

That's right.

[Rachel Cruze]

Because all these guys are like, oh, she. She doesn't really understand. I'm gonna just do my thing. Not good. That's not good. But that beautiful balance of having a spouse that you love and respect.

[Ken Coleman]

Oh, Tyler, I like this. Speak up, young man.

[Rachel Cruze]

What is it? What is it?

[Steve]

If I could just. If I could just add one thing. She is going to be in school for the next two years. And so for dental hygienists, and we're not having to take debt for that. But I will say that she's not going to be bringing in an income. And if kids are in the future, like, in two years, like, you'll be okay just thinking about the next baby step.

[Rachel Cruze]

You'll be okay.

[Ken Coleman]

Tyler, you're having second thoughts after all this wisdom we just dropped on you?

[Steve]

I just. I just want to cover my bases.

[Rachel Cruze]

No, I appreciate it.

[Ken Coleman]

No, I love it. But we covered it, man.

[Rachel Cruze]

We say to have babies, even if you. If you have debt and you're working your way out. Tyler. So even if you were at a different level financially, we'd still say to have kids.

[Ken Coleman]

So I'd like to point out, with Jade's Marvin Gay recommendation, babies maybe coming.

[Jade Warshaw]

A little sooner than we thought they might. Listen, Jade.

[Ken Coleman]

Wow.

[Jade Warshaw]

Wow.

[Ken Coleman]

See?

[Rachel Cruze]

You're welcome. Welcome, Tyler.

[Ken Coleman]

See, you actually thought that was manipulative. But you both gave great advice to that young Married man.

[Jade Warshaw]

Thank you.

[Ken Coleman]

Speaking of Marvin Gaye, we've got the outfit ready.

[Rachel Cruze]

Where's the outfit here?

[Jade Warshaw]

Speaking of smooth Marvin Gaye. There we go.

[Ken Coleman]

Look at all I'm gonna tell you folks on the putt putt course, I'm as fresh as a new pair of sheets.

[Jade Warshaw]

Fresh as the other side of the pillow.

[George Camel]

Yes.

[Dave Ramsey]

Buying a home these days can be a real dog eat dog situation. Just when you think you've found the right, somebody else swoops in with a better offer. So you need an edge. Home buyer Edge from Churchill Mortgage can help you win against the competition with the ultimate triple threat for home buyers. One, your pre approval is handled by real humans, not just a computer. So you're positioned like a cash buyer even without the cash. Two, sellers love a sure thing. So Churchill backs your offer with a $10,000 seller guarantee. If your loan falls through, the seller gets 10, which takes away their fears about financing and gives them another reason to say yes to your offer. And three, Churchill secures your rate for 90 days so you don't have to worry about the interest rates going up while you find the right home. It doesn't cost you anything extra. And if rates drop, so does yours automatically. With home buyer edge from Churchill, you're not just another buyer. You're a top contender. Go to Churchillmortgage.com to arm yourself with the ultimate start home buying Edge today. That's ChurchillMortgage.com this is a paid advertisement.

[Ken Coleman]

Homebuyer edge and seller guarantee are available for qualifying borrowers and select loan types only and are not available in all states or locations. NMLS ID 1591 nmlsconsumeraccess.org/al housing lender.

[Rachel Cruze]

Live from Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create amazing relationships. I am Rachel Cruz hosting this hour with the amazing Jade Warshaw and we are here to answer your questions about life and money, relationships, career, anything and everything. So give us a call. We're going to start off with Jacob and Indianapolis. Hey Jacob. Welcome to the show.

[Steve]

Hey, how are you guys doing?

[Rachel Cruze]

We're doing great. How can we help?

[Steve]

So I have a quick question about money and when to get started with the snowball effect. So my girlfriend and I are expecting our first child but we got the news that she is going to have down syndrome and they're preparing us for many major surgeries right out of the gate. Yeah, we are. Currently I have about 20,000 in debt and my girlfriend has about 170,000 between student loans, cars, and just like a thousand on a credit card.

[Jade Warshaw]

Okay.

[Steve]

I don't. I was a gazelle intent for a while trying to get everything of mine paid down. And I feel like the surgeries is kind of put a major halt on that.

[Jade Warshaw]

Yeah. And it should. That's. This is something that's coming up that is really, really important. And we would say, even if this weren't the case, that you should put a pause on the baby steps just because there is a new life coming into the world and you don't know what the cost of that is going to be. So you have good instincts to put paying off debt on hold. My question to you, Jacob, would be, do you know what your out of pocket max is for the insurance for her insurance?

[Steve]

No. We kind of just recently found out about the surgeries and we're trying to figure out if it would be better to kind of do a shotgun wedding.

[Rachel Cruze]

I was gonna ask, when are you gonna get married? Yeah, when are you guys gonna get married?

[Steve]

We were. The baby wasn't planned, so we were planning on doing it like sometime next year.

[Rachel Cruze]

And things have changed. And I'm gonna say this too, Jacob. Things have changed with this diagnosis. I mean, having a baby is one thing, and then having a child with special needs, which I have, I have multiple friends, honestly, that have down syndrome children, and they're the most precious, wonderful kids and babies in. In the entire world. But like you said, it does come with a financial major responsibility. So getting, I think a level of stability for you and your girlfriend together as a team is going to be huge. And. And marriage does that. Like when you guys say, yeah, we have created this life together, and we are. There's a level of stability in that, Jacob, that I would do. And then once you guys get married, then you're able to combine finances and tackle all of what's ahead together in such a united front that I think is going to help from like an. From an energy, emotional perspective. So. So yes, I would do a shotgun wedding.

[Jade Warshaw]

And. And your insurance is better than hers, is that what I heard you say?

[Steve]

Yeah, yeah. I'm with the union and she's kind of doing dental. Like she's dental hygienist. And most of most dentists don't provide insurance.

[Ken Coleman]

How.

[Jade Warshaw]

How old are you guys?

[Steve]

25.

[Jade Warshaw]

Okay, so she's not on her parents. Is she still on her parents insurance?

[Steve]

She is, but we were talking with her dad about all of this and he was kind of leaning us towards getting online.

[Jade Warshaw]

Okay. Got it. And so your homework, one of your biggest pieces of homework coming off this call is, yeah, you gotta find out once you move her onto yours, what the max is for her and what the max is for the two of you, because that's going to inform what you need to have saved, because you're going to hit that with these surgeries. So whether it's 8 or 10 or, I don't know, 12,000, you're going to need to figure out what that is and get that saved up. So if you were to put your money into an every dollar budget, what would. What's your margin every month that you could put towards savings?

[Steve]

I'm doing a lot of side things right now, so it varies, but just off of like my paycheck from my hourly job, it's probably about like $700.

[Jade Warshaw]

Okay, so 700 bucks a month. And how many months pregnant is she?

[Steve]

She is five.

[Jade Warshaw]

Okay. Okay. So you've got. I mean, you've got half the pregnancy just about to. To try to stack this up as much as possible. And now is a good time. Yeah. If you can pick up extra work, because I really would love. It's just gonna be a level of peace for you to go into all of this knowing, hey, the money's there. All we have to do is just emotionally be there for each other.

[Rachel Cruze]

From a bandwidth perspective, Jacob, right now is the time to work 80 hours a week, because by the time she comes into the world, you guys are gonna be hands on deck for a while. I mean, it's. You're gonna. You're gonna be distracted, and rightfully so. I mean, you. It is your child, and so anyone would be like that, and you're gonna want to spend more hours with the baby. I mean, like, there's, there's just. It's gonna change your life completely. And the. And right now, your life from a schedule perspective hasn't changed. So I would up it. I would do what I can right now. And then you guys take care of that baby. And then once you kind of get some grounding and some footing and some real answers and some reality, there may be some medical bills. And then you guys are gonna have to tackle all of your debt together after you guys feel settled, which for you. And in this situation, it may be a little longer than just. We usually just say when mom and baby come home and everyone's good, you throw everything at the debt snowball and you keep moving. But for you guys, it's probably gonna be stretched out a little bit longer. And. And that's okay. Don't feel bad about that is what I'm saying. Because this is such a precious life and it's such a sensitive situation that you give yourself the grace to be fully present in there and do what you guys have to do. But again, like Jade was saying, the more you can have going into this financially, the more peace you guys are gonna have.

[Jade Warshaw]

And when that baby comes, let me just say, you know, ask for what you need because your friends and everybody's gonna come out of the woodwork and they're gonna say things like, let me know if there's anything I can do, need me. And they kind of like throw the ball out there and you. It's a loop. Yeah. You slam it and say, you know, I could really use somebody to. We could really use some meals in the freeze. Freezer. We could really use someone to help. I don't know your wife's name, but help my wife clean the house. Don't be afraid to ask, because when people say that they truly do want to ask, they just don't always know what to offer. So just tell them what you need.

[Steve]

Okay. And one other thing. Since I kind of have like the lesser amount I have roughly like 19 to 20,000, do you think it would be wrong of me to kind of talk with her and be like, hey, let's knock all of mine out once we get past these stages?

[Jade Warshaw]

Oh, and then, yeah, if you guys.

[Rachel Cruze]

Are married at that point, then I would combine everything and do the debt snowball and I would pay off her thousand dollar credit card first. You guys line up all of your debts together and pay them off regardless of whose it is, smallest to largest. So hers. You know, she might have some student loans in there, I don't know. But you guys listed out smallest to largest. So I would. If she has a couple of ankle biter debts, like a thousand dollar credit card here, two thousand dollar loan to her mom or whatever, I would knock those out first and then get to your 20. But I would do the debt snowball once, you guys, and combine everything once you're married and. And again once. Yeah, you guys get some grounding and some realistic kind of reality of the baseline once your daughter comes. But gosh, Jacob. Yeah, our hearts are with you. But also, I know she's going to be such a gift and I commend you guys for going forward with this because I know for a lot of people, they don't. And there's just something in me as a mom. I just, I admire that for you guys.

[Jade Warshaw]

Amen.

[Rachel Cruze]

So you guys are gonna love that little girl. Really? Well, she has some great parents. Parents. Switching banks can be a hassle, and I totally get that. But when Winston and I opened up our Fairwinds account, we were shocked by how quick and easy it was. It just took a few minutes online. We didn't have to block off an entire afternoon or track down paperwork. And the next day, we got a personal call from a Fairwind specialist just checking in. I couldn't believe it. When I answered my phone and I was talking to them, I was like, y' all are the nicest people. Now, if you're working hard to save money, get out of debt and build a future, you should have a bank that supports that, not fights it. That's why I recommend Fairwinds. They created these smart checking and savings bundles specifically for Ramsey fans. Plus, they have a great app and you have access to over 33,000 fee free ATMs and more than 5,000 shared credit union branches across the country. So you can have access and withdraw your money just like you're used to. No matter where you live, don't settle for a bank that slows down your progress. Make sure you choose one that helps build you up and helps you win with money. Visit Fairwinds.org Ramsey and open your smart bundle today. Fairwinds.org Ramsey Fairwinds.org Ramsey. Ramsey.

[Jade Warshaw]

Fairwinds is federally insured by the NCUA.

[Rachel Cruze]

Up next, we have Hannah in Phoenix. Hi, Hannah, welcome to the show.

[George Camel]

Hi, how are you guys?

[Rachel Cruze]

We're doing great. How can we help today?

[Jade Warshaw]

Today?

[George Camel]

So my husband and I became officially 100% debt free a month ago.

[Rachel Cruze]

Nice. Congratulations.

[George Camel]

Yes, thank you so much. And during this process, we have been working really hard to, you know, save to buy a house. And about a month ago, our lender gave us a call and said that he was going to be able to give us a down payment assistance and so to go ahead and use our savings to, you know, get rid of, rid of the last of my husband's student loan debt. And so we went ahead and did that. And then he gave us a call earlier this week and said that he will be able to give us a better interest rate if we can come up with the down payment on our own. And so we could do that, but it would be living like really, really tight. Well, and also depending on how much they're willing to give us for concessions as well would affect it. So, you know, if they do decide to only give us 2% concessions. Then we would be about $2,000 short. Plus the house doesn't have a washer and dryer, so, like, we need extra money for that. Plus, like, you know, utility deposits and that kind of thing. So I was wondering, do you think it would be better for me to take out a small student loan and put it in a separate account to use just in case I'm a full time engineering student, or just kind of try to put it on our credit cards or. What do you think we should kind of do for just like that $2,000 buffer, you know, temporarily?

[Rachel Cruze]

Can I be honest? It makes me nervous that you're going in and buying a house. House. And $2,000 is going to make or break the situation. Mm, that's not good. That feel tight to you? Yeah.

[George Camel]

I'm sorry, what?

[Rachel Cruze]

Doesn't that kind of feel tight to you?

[George Camel]

It does feel tight to me, but it. I mean, we had not have an emergency fund.

[Rachel Cruze]

Do you guys have an emergency fund?

[George Camel]

Yes, we have $7,000 right now. And then by the end of the month, we'll be closer to $12,000 in saving.

[Rachel Cruze]

Okay, why don't you use that then? Use that money.

[Jade Warshaw]

What's your income?

[George Camel]

That's gonna all go towards the down payment. My husband brings home about 15 to 2,000 dollars a week. So 1500 to 2000.

[Jade Warshaw]

Okay, so you've got. Okay, so you got 6,000 bucks. And you're. I think that your emergency fund is not even at the three month level. Level, which means even with. Do you see what I'm saying? I have to agree with Rachel. I think that you're not ready to do this just yet. I think you could be ready in like six or eight more months, but I don't think you're ready yet. And I think that, like, if you.

[Rachel Cruze]

Can'T afford a washer and dryer. Hannah. I mean the. I mean genuine. I'm being genuine. Of like, oh, my gosh, what are you gonna do if the heating and air goes out? What do you. I mean, like, what do you like, that's. That's a small expense. With a home, like, so we always say to have at least three to six months of exp. Is saved in the bank with at least a 5% down payment with no debt. So are you guys completely debt free?

[George Camel]

Completely debt free. And we would.

[Rachel Cruze]

I'm sorry, you said that about a month ago. I'm sorry. Yeah, you said that a month ago. Yeah.

[George Camel]

All right. My daughter.

[Rachel Cruze]

No, you're fine. Trust us.

[George Camel]

Had more of an emergency fund. But we literally just paid off my husband's entire student loan debt.

[Rachel Cruze]

That's right.

[Jade Warshaw]

Which is amazing.

[Rachel Cruze]

So good. Okay, why don't y' all tap the brakes for six months? What's making you, like, like, rush into this?

[George Camel]

Because I feel like, you know, paying $2,000 a month on rent is the greater evil than living tight and paying $2,000 mortgage and investing in ourselves.

[Jade Warshaw]

I see that, but let's paint the picture for you, because this is so true. First off, the. The first giveaway here is you're already thinking about debt and credit. You just paid off a buttload of money, and you're already thinking about going back to debt and credit cards just for this $2,000 thing. That's a mental. That lets me know, ooh, we're not in a good headspace, then. Two, Rachel is exactly right. If you buy a $400,000 house and then turn around and can't pay a $4,000 bill for heating and air, or if something happens, because something is going to happen, it will happen. That is just the nature of homeownership. It's not to be scary. It's just part of it. Then how much more will you then say, okay, we used debt before. I guess we'll have to use it again? This is a slippery slope. And it's not anything against you specifically, Hannah. This is just how life goes when you're not prepared. And I would just hate that for you. You've worked so hard to get out of debt.

[George Camel]

Yeah. I guess the way that I'm looking at it, though, is that this is just like a temporary.

[Jade Warshaw]

It's not. Not. Not if what I said takes place now. You're in debt again. Here's. I'm gonna be real with you. Here's what it is. You really like the house that's on the hook. You love it. That's what it is.

[George Camel]

I mean, it's a. It's a fixer upper. That's going to be sweat.

[Jade Warshaw]

I know. But you still love it. Otherwise, you wouldn't be putting an offer on it. So that's really. That's the hard part of this conversation is what you're really gonna have to decide between is, do you trust that there could be another house on the market?

[Rachel Cruze]

And if it's a fixer upper, then there will be.

[Jade Warshaw]

Yeah. That you can love and be ready to buy. Because I'm telling you, there will be. The hard part is not making that offer.

[Rachel Cruze]

Yeah. And, Hannah, I think, too, what we fight for on this show, Dr. John Zalone said it, and I think it's so true. We are fighting for peace. We are trying to create peace in our life. And even if you're renting and throwing $2,000 away while you guys save up a bigger emergency fund, you have little kids. You know, we heard them in the background. They're so sweet. You got kids. There could be, you know, doctor's visits that come up, health issues, a job. Like, life just happens. It just does. And to create peace, you think in this moment that this house is it. Oh, gosh, like, if we can just get into this, it's going to be just a better situation. But financially, it's not right now for you guys. And if anything, it's going to turn into a curse, and it's actually going to create. So it can create. Could create so much stress and anxiety you're giving the risk or the gamble that. That could be the reality. And then you look up and you're like, we are deeper in debt because of a washer and dryer. We had to take out a student loan to get $3,000 here. We had this happen. And this happens slowly. You could look up and you're 10, $15,000 in debt again. And then you guys are at this point where you're like, oh, my gosh, like, what have we done? You've gone backwards. And then the house is a fix. You're going to get in there, you're going to find mold behind this wall. The plumbing here isn't going to work. It always costs more and takes longer with the renovations. I mean, it just turns into. I mean, you're setting yourself up for a very stressful situation, Hannah. That's what we see. And I know it sounds like we're being Debbie Downer, and we may be, because we just get. We hear reality on this show all the time. So if we're fighting for peace, it may not be exciting and flashy and fun and what we want, what we're desiring in the moment. But if we can say no to ourselves to be smart and create some delayed gratification and wait till even the spring, January, February, and have, you know, you guys could have. Gosh, you got seven. I mean, you guys could have $20,000 in an emergency fund, have a full down payment that you are so confident that you are great, you know, giving away. And then something happens. You're like, great. We have actual margin in our budget, and we got a $20,000 emergency fund, a $30,000. Do you know what I'm saying? Like that's peaceful to me. You're just set. So it's just like, there's just a lot, there's a lot that could go wrong. So I know it's probably what. Don't. It's not what you want to hear, but that's how I feel. So if you can't afford a washer or dryer, I'm going to say you can't afford a house right now.

[George Camel]

Yeah. But one other thing I wanted to like point out is would there, would you be giving me different advice if you know, we hadn't paid off, you know, that $7,000 student loan and we had that, you know, as a buffer. No. Okay.

[Rachel Cruze]

Oh, oh, oh. If you, if you have, if you had $7,000.

[George Camel]

If we hadn't. Because we'd still have debt towards it.

[Jade Warshaw]

You'd still have debt. So we still would give you the same, hey, pay off the debt, save up three to six months. Yeah. The advice would not change.

[Rachel Cruze]

It'd be the exact same formula.

[Jade Warshaw]

And, and I just. Now that we've uncovered a little bit here and I just gotta ask. So you guys are also doing no more than 25% of your take home, right? I just want to be sure.

[George Camel]

Towards the mortgage.

[Jade Warshaw]

No, no. When you, when after you've put the down payment down, the amount that you'd pay on your mortgage, it's only 25%. Right. Of your. If you take home after tax.

[George Camel]

I believe so I think that the lender said that depending. If you know, we spent up depending on concessions and that kind of thing is going to be between 25 and 30%.

[Jade Warshaw]

Okay. So that I also wanted to bring that up. That is out of. I don't want to say it's the most important number to know, but that is of huge importance to know going forward when you do get a house. That's what you want to know. You want to make sure you're no more than 25%. Cuz again kids life happening, you need that margin.

[Rachel Cruze]

Yeah, absolutely.

[Jade Warshaw]

Gosh, Hannah, I'm sorry, but I'm not sorry. Cuz it's the right move.

[Rachel Cruze]

I don't know if she's going to take our advice, but we wish you well, Hannah.

[Steve]

We wish you well, Sam.

[Ken Coleman]

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[Steve]

Foreign.

[Rachel Cruze]

The Ramsey Show Question of the day is brought to you by why Refi feeling stuck with defaulted private student loan payments? Well, why Refi can reduce your payments and help you regain control of your finances. Take the first step toward getting unstuck. Visit yrefi.com Ramsey that's the letter Y R-E-F-Y.com Ramsey may not be available in all states.

[Jade Warshaw]

All right, today's question comes from Ty in Texas. He says, my girlfriend and I have been discussing marriage and engagement rings.

[Rachel Cruze]

Love it.

[Jade Warshaw]

We're both 24 years old. I make $70,000 a year and have a small amount of student loan debt that we can knock out easily after the wedding. What do you recommend spending on an engagement ring? Am I being cheap for wanting to purchase a lab grown diamond? I'm fine with spending a bit more on a natural stone, but don't want my girlfriend to think I'm cheap. Okay, well, there's two parts to this question. Part of it is preference. Right. I don't. I mean, if she doesn't. Some people don't care about diamonds, per se. They care about the look of the ring. So she cares more about the look of the ring and she's willing to do a lab grown diamond to get a lot of people.

[Rachel Cruze]

A lot of people are doing that these days. Yeah. And they look beautiful. I'll be honest. You can't really.

[Jade Warshaw]

You can't really tell.

[Rachel Cruze]

No, I don't think anyone's asking. If I see someone's engagement ring, I'm always like, oh, beautiful. You're kind of looking at the size, right? You're like, dang, that's a big ring. I don't know. And it's like always because.

[Jade Warshaw]

Is that lab grown?

[Rachel Cruze]

Yeah. No, it is.

[Jade Warshaw]

I'm cutting you off.

[Rachel Cruze]

Yeah, that's right.

[Jade Warshaw]

You're cut off. Okay.

[Rachel Cruze]

But if she wants a natural. So I wouldn't guess on the engagement ring with what she wants. You guys are. Yeah. Ask her and just know that if it's a real one, it's probably gonna be smaller or you're you know, get more bang for your buck if you go lab grown. So just. I would, I would ask that, but how much?

[Steve]

Much?

[Rachel Cruze]

Yeah, we usually say a month's salary. So whatever you make in one month, that would be the amount that we would spend.

[Jade Warshaw]

Can I say that that's the minimum?

[George Camel]

Yes.

[Rachel Cruze]

Yes, you can. Jaden. I think like the diamond. The diamond, like world or the ring world, the engagement world. I think they say three months.

[Jade Warshaw]

Yeah. Yeah, they do. They do.

[Rachel Cruze]

I think that's what they. That's what that say is average.

[Jade Warshaw]

I tend to love that. But at the same time, like you said, you've got debt. There are. There are. I'm, I'm being silly. There are more things to consider. You do have some debt to pay off. You guys do have a wedding possibly to fund. I don't know who's paying for the wedding. So do think about those things and if, you know, if you got a little extra cash.

[Rachel Cruze]

Yeah.

[Jade Warshaw]

Throw it on there.

[Rachel Cruze]

Bump it up. Are you, Are you against upgrading rings later in life?

[Jade Warshaw]

You know what, it's funny that you say that. First off, I forgot to wear my wedding ring today, which is bananas.

[Rachel Cruze]

In one of our breaks, she was like, I forgot my wedding ring.

[Jade Warshaw]

Yeah, it's crazy. And so I put my aura ring on it. But, you know, I had the thought when I first got engaged, it was like, oh, you can always upgrade your ring. But I don't know about you. I, I, you grow a connection to it. And I'm like, I love my ring. It's got its inclusions and it's, you know, it's not perfect, but I love. I could never imagine not wearing that ring at this point.

[Rachel Cruze]

Yeah, that's fair.

[Jade Warshaw]

Like my, the actual diamond.

[Rachel Cruze]

Yes, Yes.

[Jade Warshaw]

I don't know.

[Rachel Cruze]

Totally, totally. I know. I've heard people do creative things. They like, we'll take the diamond and make a necklace or like, do other things like, with it.

[Jade Warshaw]

That's a good idea.

[Rachel Cruze]

But that's. That's an option too, Ty. So.

[Jade Warshaw]

Yeah, that is. That's a great option.

[Rachel Cruze]

That's fun, though. That's a fun season of life. The whole engagement ring shop and all of it. Oh, my gosh.

[Jade Warshaw]

So good.

[Rachel Cruze]

All right, let's go to Sam in Ohio. Hey, Sam. Welcome to the show.

[Steve]

Hello.

[Rachel Cruze]

Hello. How can we help today?

[Steve]

I had a question. I. Falling out of Phil. Philosophical alignment with my better half on. On finances and those.

[Rachel Cruze]

Okay.

[Steve]

Wondering how to line that back up.

[Rachel Cruze]

Oh, what's the where are you guys not aligned? Which part?

[Steve]

Well, we were Self employed. We had a company for a long time and then 20, 21, we had some tragedy hit and so we shot one leg of the company down. And I continued to be self employed. I'm trying to short. I continued to be self employed and she brought her back to Ohio from another state to be closer to her kids. So we should, we shut a whole thing down and she ended up taking a job at a plant. And you know, throughout 25 year company, you know, throughout the years, we always practice delayed gratification and whatnot. Now we're at a point where she's, you know, after my stepson was murdered, after that happened, she kind of checked out. I mean, you look and you talk to her and she's like, okay, the same person, but she just, she doesn't care about money or anything anymore. And yep, now I've to change some things with. We ended up winding that business down, got a different one going. And I've created a lifetime residual income and I have homes in three states. Washington, Ohio and Florida.

[Jade Warshaw]

And so you're doing, you're doing well financially, but you're saying she's checked out mentally and she's doing behaviors with money.

[Steve]

She's checked out financially as well. She doesn't care, care about the money. She wants to keep working at this job.

[Rachel Cruze]

Okay.

[Steve]

She just gives all her, her money away to her kids, which is another basket of problems.

[Rachel Cruze]

Okay.

[Jade Warshaw]

And is she seeing anybody? Is she getting help? I mean, what you described is traumatic. Yeah, on the highest level.

[Steve]

Yeah. Well, it is. And we recently, you know, right after that, we went through a period where we, we had to take care of my parents. And then both of them passed away. And so like the last three, four, four, five years have been a whirlwind. So yes, we split apart, got back together. We are in counseling, but I kind of feel like she's just kind of telling the counselor what he needs to hear kind of thing. And I want her to get on the right page.

[Rachel Cruze]

What are you wanting from her, Sam, from a financial perspective that you're, you guys are not aligned on? Is it giving money to the kids? The fact that she doesn't initiate conversations with money, she doesn't care. Like, what's the.

[Steve]

Well, well, you know, I mean, at this point, I don't want her necessarily to be working anymore.

[Rachel Cruze]

She want to work?

[George Camel]

She.

[Steve]

Well, yes and no. Yes and no. But I'd say yeah, she, well, she wants to keep, keep, keep the thing because she keeps finding funding her kids.

[Jade Warshaw]

Well, what's wrong with her working. You tell us what.

[Steve]

Well, what's wrong with it? And this is the only thing is, you know, I'm at the point where we're at the point now where we were working for before, where it's time to stop working. And then every two or three months, we were going to be in a different home, different climate. I mean, my kids are on the other side of the country. Country and my grandkids.

[Rachel Cruze]

So, Sam, real quick, we're kind of running out of time. I want to make sure we can help you with how, what you called in with. So what's your, what's your net worth? Do you guys have a lot of debt? Do you have a lot of surplus? Like, where are you at net worth wise?

[Steve]

Net worth in, in equity, a little over 14 million.

[Jade Warshaw]

Okay, so you're saying she doesn't need to work, she can stop. You think probably it's better for her mentally to stop? Stop.

[Steve]

I, I, I don't know. Yeah.

[Rachel Cruze]

Her motivation for working, you don't like, because it's just her giving money to her kids and enabling her kids is what you think, right?

[Steve]

Well, well, that, that, that, that's part of it, but the other part is this is a time in life where we're going to be doing something different, you know, traveling.

[Rachel Cruze]

Gotcha. Okay. I gotcha. I gotcha.

[Steve]

You know.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

So, yeah, it's painting what John Deloney would say. You're, like, putting pictures to words that you guys, you had a picture of what this time of life was going to look like. Like, and here she is working a 9 to 5 and giving the paycheck to the kids. You're like, no, no, you're supposed to be unplugged. We've worked really hard and done really well financially, and we should be traveling and all of that. So, I mean, from what I just wonder within her, because you said she's, she's changed some. She's there, but she's not fully there. You've said that a couple times on the call, which makes sense since the tragedy. So I just wonder for her where the healing is for her, because there's a, there's some level of security and safety that, that this way of functioning is giving her.

[Jade Warshaw]

Yeah. Or an outlet of some kind.

[Rachel Cruze]

And as a husband, you're seeing it and saying, like, there's other ways to deal with this in a healthier way that also could add to our quality of life as a couple. And so, I mean, honestly, Sam, I think that this would be a conversation about what's going on within you and what you're desiring and wanting and then, you know, helping. Encouraging her to continue to get some healing. And it may be more than just couples therapy like her. Her stuff may be really deep because of the tragedy that happened, which makes total sense. The more healing she has, the healthier those outcomes are going to. If you're tired of living paycheck to paycheck and you feel like you just can't get ahead, make sure to check out one of our free everydollar trainings. So we do these trainings every single week throughout this month and they're all hosted by one of the Ramsey personalities. I've done a couple. Jade, I know you've done some.

[Jade Warshaw]

I'll be there Monday.

[Rachel Cruze]

Yes. So we are so enjoying these you guys. And there's like hundreds of you guys, sometimes over a thousand, but they're completely free. And we're able to show you how to stick to a budget and even find $9,000 dollars of margin within your money. And that's great margin to help you get out of debt.

[Jade Warshaw]

That's a lot of money.

[Rachel Cruze]

Do it all. So if you have any questions that you want answered, you can even sign up and ask that question live in the Q and A because we do a live one as well. So you can go to ramseysolutions.com webinar and sign up. And we will be doing those. Yeah. Every week in this coming month.

[Jade Warshaw]

Oh yeah. Love it.

[Rachel Cruze]

All right. Alright, first up we have David in Spokane, Washington. Hi David, welcome to the show.

[Steve]

Hey guys, thanks for having me.

[Rachel Cruze]

Absolutely. How can we help?

[Steve]

Yeah, so I'm currently on baby step one and I'm curious to know if I should be making an exception to the $1,000 in savings and increasing that to for myself around 7,000.

[Jade Warshaw]

That's a big increase. Why would you do that?

[Steve]

Well, my transmission is going on my car. I know it's, it's, I guess a pending expense that I'm anticipating in the next few months.

[Jade Warshaw]

Okay, so let me clarify something and I think it'll help you and I think it'll help listeners. So one of the things about an emergency fund fund that qualify whether or not you use it is if something is necessary, if something is time sensitive like it must be done right now and if it's unexpected, I feel like that's when you go and you dip into the emergency fund.

[Rachel Cruze]

Yep.

[Jade Warshaw]

Now if we know something is coming and we know that it's, you know, we're going to have to get the AC fixed. We're going to have to get the oil change. We're going to have to. Those are things that we would say maybe do a sinking fund for and so that you can prepare for it as you know it's coming versus always having to go into the emergency fund. And I know that's not what you're trying to do, but I just want to clarify that before we give you our advice going forward.

[Steve]

Sure. So is that like separate? Would I be. I'd like to contribute quite a bit out of my paychecks each month to save up because right now I have seventeen hundred dollars saved. So I guess that's more than. That's more than the thousand dollars anyways. So are you suggesting making payments to that sinking fund as if I was making payments to an emergency fund?

[Jade Warshaw]

Yeah. What I'm saying is kind of keep it separate in your mind. Like my thousand dollars is over here. That's my emergency fund. I'm not touching that. I do have something that's coming up that I know has to be done. Done. And I'm going to kind of start putting a little money aside for that as I'm working the baby steps.

[Steve]

Sure. Okay.

[Jade Warshaw]

How much is it going to cost? Is, is the transmission $7,000? Is that what it is?

[Steve]

Well, it's 6,000. I was thinking to have an overhead of a thousand to, to keep into the end of the Right. I guess.

[Rachel Cruze]

How much is the car worth?

[Steve]

Well, the car's worth. I bought it a year ago for, for 10 grand. Oh, and. Well, actually no, let me think about this. 12 grand and I owe six on it still.

[Jade Warshaw]

Oh man, that's.

[Steve]

That's the problem is that. I don't know. Would you suggest maybe even just fixing it and selling it and getting rid of this debt and buying like a beater.

[Jade Warshaw]

Is it still drivable? Like has, has, has it already happened or you're like this is gonna happen so soon.

[Steve]

I know it's going to happen soon. Yeah. It's just been showing signs.

[Jade Warshaw]

Then I might get out of it while you still can before it needs the repair. Cuz you can sell, sell it at this point it's not undrivable. And then take that Money with your 6000 or with your whatever you have saved.

[Steve]

Yeah. I kind of have a guilty conscience selling it to someone, you know.

[Rachel Cruze]

Yeah. Have you taken it to a mechanic and they're telling. I don't. I'll be honest, David. I don't know much about cars. So how do you know it's going out, like, have you, have you had it, you know, in the, in the.

[Steve]

Shop and I work.

[Rachel Cruze]

Okay. Okay. Yeah.

[Steve]

I work on cars closer and. Yeah.

[Jade Warshaw]

Okay.

[Rachel Cruze]

Yeah. Because I don't want you to be dishonest.

[Jade Warshaw]

No, you don't want to do that. I get it. I just. If you're like. It's showing signs. And I'm like, anybody who drives it is going to know what they're getting into if it's showing signs. But. Yeah, I have a hard time with. I mean, you could.

[Rachel Cruze]

How much debt do you have, Dan? Total.

[Steve]

So that's the thing is I have student loan debt. On top of that, I have 29,052 in federal loans and then 4,472 in private loans.

[Rachel Cruze]

Okay, and how much do you make a year?

[Steve]

Well, I just got a second job on top of my full time job, so.

[George Camel]

Yeah.

[Rachel Cruze]

What are you making a month after tax? Like, what are you bringing home a month?

[Steve]

I should be bringing home 4700.

[Rachel Cruze]

Okay.

[Steve]

Without the second job, it's. Right now what I'm at is 4100.

[Rachel Cruze]

Mm. Okay.

[Jade Warshaw]

And are you. You said you work on cars. Would you be doing the work on the transmission? You're doing the work.

[Steve]

No, I do that as a hobby. I'm not. That's not my full time employment.

[Jade Warshaw]

Got you. No, I understand it's not your full time employment, but I'm just saying, is this something you would do. Do?

[Steve]

No.

[Jade Warshaw]

Okay.

[Steve]

That's. Yeah. Transmission's a little bit too hard for me.

[Jade Warshaw]

Yeah. Yeah. This is a tough one, I think. If you think that. Go ahead.

[Rachel Cruze]

Well, if you fix this for 6000, do you think it's going to last you for another five, six, seven years? Like, could the, like would it be a, a great car for a while? It's just got this issue.

[Steve]

It's a Toyota. I mean, everything.

[Rachel Cruze]

Yeah.

[Steve]

Seems to be in working order. And I don't have a reason to.

[George Camel]

Think it for sure.

[Rachel Cruze]

Yeah. I mean, here's the thing. The, the, the magic of the debt snowball is that you create this momentum. It's kind of like this scorched earth. You see progress that's happening and people end up getting out of debt faster than they thought they would. The human behavior changed. I mean, there's just so much psychology and all of this I have happens, and that's the beauty of it. And so to be able to start that as soon as possible is, is huge. But we also say if you know something big is coming up in your life, whether it's A job change, a move, a baby. Like, there's something that's going to create a big expense. We do encourage people on baby step two to pause, save up, to be able to cash flow those situations.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

So I almost. David. And again, you know cars and your car better than I do do. So you make the decision of, do I fix this, sell it and take a smaller loan and or be, you know, free and clear of the six grand, which, if you can, that's amazing. Right? I mean, like, there's something about that, that you're $6,000 less in debt or for you, if you fix it, it's going to be a great car. It should last me a lot longer. Then the $6,000 is almost an investment to fix it, but then you still got 6,000 left to pay off of the loan. So I think it's kind of like one way or the other. I mean. Yeah, but the reality is you're going to need a car. And. And if you see this coming, you know, there may be this instance of like, get the thousand dollars, have a side transmission, you know, fund that you're putting some money in. But if you can throw extra at the debt, um, I would do that as well. I would kind of keep that debt. I would start that debt snowball, start putting some extra just so you see some progress with the debt while simultaneously saving on the side and knowing that you're gonna have to fix this car.

[Jade Warshaw]

I kind of like the idea, you know what. How it is with beaters, it's like once you get to know them, it's like that. This one's mine. I. I know. I know what's going to happen here. I almost like the idea of you sticking with the one, you know, then trading it for another one that's going to have its own new set of issues. Shoes, if that makes sense. Yeah, yeah. I mean, I think you're just gonna have to spend $6,000 to fix it over time and.

[Rachel Cruze]

And save up and pay for it.

[Steve]

And the good news is, is that I can ride my bike to work and. Oh, yeah, grocery store. And so, like, everything I need is right here.

[Jade Warshaw]

You got the spirit.

[Steve]

I've only put 60 miles on it in the last two months.

[Rachel Cruze]

Oh, wow.

[Steve]

I've just been walking and riding my bike, so it worked well.

[Rachel Cruze]

There you go. That's some low mainten. We. We appreciate that.

[Jade Warshaw]

I love that because if I told somebody to ride their bike, people would come for me in the comments.

[Rachel Cruze]

Jay, you're crazy. You're crazy.

[Jade Warshaw]

And I Rode my bike just the other day.

[Rachel Cruze]

That's awesome. Okay, David, Well, I hope that helps. And yeah, great job on starting this process. I'm proud of you for getting a program and a plan in place with your money. That's what we like to see. This is the Ramsay.

[Ken Coleman]

Hey, George Camel here. So you're thinking about buying or selling your home? It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com realestate that's ramseysolutions.com realestate.

[Jade Warshaw]

Live.

[Rachel Cruze]

From Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that we love, and create amazing relationships. I am Rachel Cruz hosting this hour with the incredible, incredible Jade Warshaw. And we are answering your questions about life, money, relationships, career, anything and everything. So you name it, that's it. Give us a call at 888-825-5225. And we are here to help you up first, we have Gus in. Ooh, Spanish Fork, Utah.

[Jade Warshaw]

Okay.

[Rachel Cruze]

Hi, Gus. Welcome to the show.

[Steve]

Hey, thanks, Rachel.

[Rachel Cruze]

Absolutely. How can we help today?

[Steve]

So I just have a interesting question. I guess I am on baby step two right now, paying off all my debt. And for my job, I travel and I do events around the state. And a lot of times I, well, every time I guess I booked my own travel, being hotels, gas and food. And sometimes I costs like, well, close to a thousand bucks. And I'm just curious what you all would recommend doing. Obviously, I know you don't like credit cards. That's what I've been using for this purpose. But I just kind of want to know how I can do this without using a credit card or my emergency fund.

[Jade Warshaw]

Do you have cash or is it beyond the amount of cash within your monthly cash flow?

[Steve]

It is usually beyond that. Just depending on the month, I'll have anywhere from one event. Sometimes we'll do five or six events.

[Rachel Cruze]

Is it, what kind of events are these? Are you being hired for these events or are these your job? And then you get paid like, like how. What is it exactly?

[Steve]

So they're home shows. I work for a utility company and I offer help homeowners get rebates and stuff. So, okay, I go and I talk to homeowners at events, like set up a booth, kind of like a trade show type situation.

[Jade Warshaw]

So it's not your business. You work for the, the company, correct?

[Steve]

Yeah.

[Rachel Cruze]

And they're not paying for your travel?

[Jade Warshaw]

That's what I'm saying.

[Steve]

They reimburse me for it, but I, I pay for it up front because I'm booking my own hotels and everything.

[Jade Warshaw]

Oh, gosh. So yeah, I would. That arrangement needs to change because what happens, happens. What happens if you've racked up a certain amount and A, if they contend the charges or B, what happens if you're, you know, if you lose that job or you decide to move on and they decide they don't want to pay? So I would be sitting down with whoever your leader is and very respectfully saying, hey, here's what's happening. I don't use credit cards and I don't have debt. And so what you're asking me to spend goes beyond my margin every month and I don't have a way to pay for it. For it. Can you upfront the money for me and give me petty cash or give me, I don't know, maybe they have a company debit card and I can use that and then I submit all the receipts along with, you know, the bank statements or whatever it is. That's normal, by the way.

[Rachel Cruze]

Yeah, I was going to say that's a pretty like standard practice. If there's a company and it. And part of your job for them is to travel, they usually take, take the initiative to say, yeah, we're paying for your travel for the company. How many people is it in the company that travel?

[Steve]

Well, it's a pretty big company. I think there's, well here even more.

[Jade Warshaw]

Reason for them to upfront you the.

[Steve]

Money like 6 or 7. Yeah. But there's probably, I bet close to 100 around the country.

[Rachel Cruze]

Okay, so that's what I would do. Plan A. If for some reason they don't change their policy but you still love it and you still want to stay. Plan B, Gus, would be that you then than have to have a work account that you're going to have to kind of act like you are, you know, getting out of debt, like with the same level of sacrifice and stuff to put fifteen hundred dollars or so away in a separate account. And that account is There for when you travel. But you have to be. I would make it a goal to be on the front end of it versus being in the hole financially. And, and this is your work. So I almost would pop. Cause the debt snowball and save up that extra thousand fifteen hundred dollars.

[Jade Warshaw]

So you can keep working.

[Rachel Cruze]

Yeah. So you can keep this going, this job. And the arrangement is, is that you spend out of that account. And that's how I would do it. I wouldn't go in the hole and then wait for them to fill the. In the hole. I would be on a. On a solid foundation. Does that make sense?

[George Camel]

Yeah.

[Steve]

Almost like a second emergency fund.

[George Camel]

Yeah.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

That's what I would do.

[Jade Warshaw]

Gus. I had a job that was like that when I worked on cruise ships. You would go travel and some of them would give you a stipend up front, but it was never enough. And so you're having to go through, you know, and go from your own money. So Rachel is. Is actually. Actually exactly right. I mean, some jobs just won't budge on that.

[Rachel Cruze]

Yeah.

[Jade Warshaw]

And if you're fine with it, great. But if you're not, you know. Yeah. I could totally understand wanting to get the money up front.

[Rachel Cruze]

Yeah, yeah, yeah. I wouldn't, I would feel uneasy about charging all of this and then just waiting for them.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

Cuz the c. I mean the credit cards in your name, all of it, like there's just more risk on your end.

[Jade Warshaw]

Definitely don't do a credit card.

[Rachel Cruze]

O. Yeah.

[Jade Warshaw]

You know.

[Rachel Cruze]

How much debt do you have?

[Steve]

So right now I have student loans and my truck and I'm about 46,000.

[Rachel Cruze]

Okay, how much do you make a month?

[Steve]

See, I make 80k here post tax. I make about 3200. Sorry, 5200amonth.

[Rachel Cruze]

Okay, how much margin do you have right now? If you just did like food, shelter, utilities, transportation, health care, like all your main expenses, how much extra do you have per month?

[George Camel]

I'm not entirely sure.

[Steve]

My wife and I, we just had a baby, so I. I need to recalculate that.

[Rachel Cruze]

Okay. Congratulations. That's exciting. I'm surprised you're even coherent talk to us with a newborn. I know it's a lot. Okay, well, Gus, what we're going to do is we're going to give you every dollar premium. And this is our budgeting app. And you and your wife sit down this weekend and you guys create a monthly budget. And the great thing about every dollar is you're able to see all of your expenses because they give you kind of a Template to say, hey, here are the main expenses in life. You guys say, okay, here's what we make every month and here's our expenses. What's our margin? Because you're going to want to know that number as well, Gus, to be able to know how fast you guys are going to be able to get out of debt. But for the interim, I would use that margin. And again, you guys are in debt, so there's no out to eat. There's no saving for vacations. There's no, I mean, there's nothing. Like you're cutting everything, cut subscriptions like it is scorched earth as you're getting out of debt. So when you see your budget, just delete a lot of the line items that you would have done. You're like, here, like, how much margin can we get per month, realistically? And if it takes you a month or two to save up that thousand dollars or $2,000 for your work, I would make that priority number one and then take that extra whatever it is per month, let's say it's a thousand bucks, I don't know that you can get and start tackling this debt. So that's kind of the process. But you need to know that margin number, Gus, for you guys to really get on the same page and know, like, here's what we're shooting for every month and our goal of getting out of debt. And so yeah, if you'll hold on the line, our team will hook you up with a code and you guys can get a year of every dollar premium for free, our treat. That's great. But yeah, this is, this is a tough one. And we've heard a lot about work with like reimbursements and expenses and like, it's, it is a thing. But if you can make it a workaround where you're more in control, that's the better off you're going to be.

[Jade Warshaw]

Come on. These big companies, they need to go ahead and pony up the cash. Wow.

[Rachel Cruze]

So bizarre.

[Steve]

Sam.

[Dave Ramsey]

I was sick and tired of being sick and tired. Bankrupt with a toddler and a brand new baby at home. Scared doesn't even begin to cover it. But I got mad enough to change. I started using God's and grandma's ways of handling money. That journey became the total money makeover, a plan everyday people can use to take control of their money. Millions have changed their lives following the plan in this book and found hope. Start your makeover [e-mail] store.

[Rachel Cruze]

Up next in New Mexico, we have Dee on the line. Hi, Dee, welcome to the show.

[George Camel]

Hi, how are you?

[Rachel Cruze]

We're doing great. How can we help today?

[George Camel]

My husband is going on deployment here shortly and my question is he's going to make quite a bit more than he makes normally. So we don't want to change our budget, but my question is this. We both have student loan debt. That's really the only debt we have. But he has the option of public service loan forgiveness and I have nothing as a stay at home mom. Should we focus on if I'm paying mine with the debt snowball or doing it jointly?

[Rachel Cruze]

The public service payoff. What, what does that entail? Give me some of the details around that.

[George Camel]

If you pay the minimum payment due and you make those 10 years of payments, they will forgive the rest of.

[Rachel Cruze]

Okay, so it's over the 10 year mark. It's nothing specific with the military where they'll pay it off after like six months of deployment. It's over 10 years. Okay.

[Jade Warshaw]

So there's a lot changing with that right now. D. And well, I can tell you this, I can tell you that the current, the current stats on that is very low, like less than 2% actually. Get it, get it. Actually get it done. And now with new administration, we're seeing those tighten up even more. And it's kind of indeterminable what, what will be and what will not be on that. So for those reasons alone, I would not depend on the. That I would just take both of your loans together. Yeah. And list them smallest to largest.

[Rachel Cruze]

And I don't want you in debt for 10 years either. Even if they were, even if they were forgivable in 10 years, I want you out of it. Absolutely, yes. But what Jade was just saying was. Yeah, listing them smallest to largest. So how much do you, how much will he be making when he's deployed? Like what will the margin be per month?

[George Camel]

We're having a surplus of 30. I want to say I wrote down these notes and they're all over now.

[Rachel Cruze]

You're fine. You're fine. That's great.

[George Camel]

Well, he's a police officer in his day life and so his day job and that is, we're just going based on the guarantee. 40 hours. They do a lot of times get over time, but we don't want to budget based on what is.

[Rachel Cruze]

Sure.

[George Camel]

So his actual take home is 36.90 with the police, plus or minus. And then he gets his normally National Guards in pay at about 5:50amonth. But in the National Guard he's going to make on a deployment, he'll make 3758 per paycheck, so. Times two.

[Rachel Cruze]

Okay. And he'll keep his police officer salary going when he's deployed?

[George Camel]

No, no, that will be switching only to the salary. They do keep your job for you, but you don't get get paid, obviously.

[Rachel Cruze]

Okay. Okay.

[George Camel]

And then how much surplus of almost 4600 over the course of that year.

[Rachel Cruze]

Okay. Okay. And how much student loan debt is there?

[George Camel]

Jointly we have 110, 858 and 49 cents.

[Rachel Cruze]

Wait, say 110,000? Yes.

[George Camel]

858 and 49 cents.

[Rachel Cruze]

Okay.

[George Camel]

And those are what, 63,000 or 63,000. And I've got it down to 48,000 online.

[Rachel Cruze]

Yeah, that's great.

[Jade Warshaw]

Yeah. I mean, I go back to what I said before. Just make sure you guys go through these and really do do them smallest to largest as opposed to his versus hers, because then you are going to get that momentum that we want and you're going to get those quicker wins. It's hard to look at a mountain of 63,000 and say, okay, that's what's next. But if you break it up and go, you know, okay, the next one is 4000 and the next one after that is 6000, then it is a lot, you know, easier to handle mentally and money wise.

[Rachel Cruze]

Yeah, for sure. Well, thanks, Steve, for the call and thanks for your husband's sacrifice in yours. Yeah. As a sp. A spouse of someone being deployed who. It's a real sacrifice. So we appreciate you guys so much for what you do for our country. Up next, we have Greg in Albany, New York. All the Albany, Albany, listen to me, Albany. Hey, Greg, welcome to the show.

[Steve]

Hi. Thanks for taking my call.

[Rachel Cruze]

Absolutely. How can we help?

[Steve]

I was curious if there was ever an instance where a whole life policy made sense. I don't understand why they exist because they seem to be, as you guys say, bad investments and bad, not really good insurance policies. So I'm just kind of curious where they came from or why they exist or if there's ever an instance where it might make sense. Sense.

[Jade Warshaw]

Wow.

[Rachel Cruze]

Yeah. I would say the only time I know we've ever told someone to get a whole life policy is if they had a terminal illness and they didn't have insurance in place. It's pretty much impossible to get term life in that case. And for some whole life insurance companies, you're able to still get insurance even if there is a condition. From a health perspective, it's much easier to get whole life than Term life. Because we would say get life insurance. Like we want that for you. And so sometimes people don't qualify for term because of the state of their health. So that would be the only instance we've ever said because to your point, it is like it's such a ripoff product and honestly they, they, they prey on people that don't have all the information because the way they sell it and the way it's presented sounds incredible. It sounds like, like this great product that's going to help. And I'm, you know, so whether it's the side of like, oh, I get, I get life insurance through my whole life or the savings and investing that comes with it and all of it. So the way they package it make it sound like it's a great deal to the consumer or where the truth is.

[Jade Warshaw]

And it's a way. Oh, sorry, I thought you're good.

[Rachel Cruze]

No, it's just very expensive compared to term life and what you could be investing.

[Jade Warshaw]

Yeah. And I think for the companies that do it, I think it's a way for them to get into investing without having a securities license. Like they're able to sell an investment product without actually being a licensed investment.

[Rachel Cruze]

Yeah.

[Jade Warshaw]

You know, professional. So I think that's also where there's a little bit of a, what, I'll say, gray area. Yeah, it's a big red flag.

[Rachel Cruze]

Yeah, for sure.

[Jade Warshaw]

You know, because, yeah, it's still a product and at the end of the day you have to remember folks are trying to make money out here. So I mean, that's really the short end of the answer.

[Rachel Cruze]

Yeah, but it's such a, a well marketed product that people don't look into the fine print and the details and the other options too. Because I do think life insurance is one of those sectors in life that, you know, you can easily prey on fear and greed. And it's like, here's something that's going to be, you know, great for you financially and also, you know, the fear of, oh gosh, if something happens. So we are a proponent of, of life insurance though, so I do want people to hear us say that. But term life insurance is what we promote and you want about 10 times your annual income. If you're a stay at home parent, we recommend getting half a million or even 700,000 on you even as a stay at home parent. But you can check out Zander Insurance. They are the company that we recommend because they do a great job at shopping multiple insurance companies and not just sticking with one to get you the Best rate. It's the, it's the way Winston and I have our term life insurance. We did it through Xander and it's, it's fantastic.

[Jade Warshaw]

And just to clarify, you know the way that the reason that we're saying term life is because 100 then of your premium is going towards your benefit. Right. Whereas with whole life is being divided up. And the reason we don't like it is because they're taking half of your premium, premium which is what you pay every month for the policy. They're putting part of it to your benefit, your death benefit, which is what your family family would receive if you passed away. And the other part goes towards what's called a cash value amount that's being invested. And that investment, the reason we don't like it is because the rate of return on that investment is very, very poor. Like really bad. Some of them are like 4% not good at all. And, and the biggest thing is that cash value amount, you don't get that and your family doesn't. You surely don't get it if you pass away, but your family doesn't get it if you pass away either. So the only way that you get access to that cash, cash value is if you were to borrow against it, which is like, why would you do that? The whole point is to not be in debt. The other way is if you were to just cash out the policy, which if that again, what was the point of even having it if you're cashing it out?

[Rachel Cruze]

Right.

[Jade Warshaw]

And so that's what happens here. It's just, it's not a well thought through product. So for if anybody was wondering, hey, why don't you do this? And if you really were to take this, the amount that goes towards that cash value investment, if you invested it yourself.

[Rachel Cruze]

Yes.

[Jade Warshaw]

In a good growth stock mutual fund, what we would suggest you're going to get upwards of a 10% return, which obviously you can see. Why would you take a 4% return when you can choose a 10% and choose what it's invested in? So hopefully I made a good case.

[Rachel Cruze]

For, yeah, a lot more control. Oh yeah. And you guys, if you don't have life insurance again, please, please get life insurance, please. It is, it's one of the saddest calls that I think we get on the Ramsey show is a spouse passes and the other spouse is left to deal with everything and there's no money. And so set your family up. Well and term life is inexpensive and yeah, use the, use the difference of what you would have paid for whole life to invest it yourself and you'll make twice as much money, which is what we want for you. So this is the Ramsey show.

[Ken Coleman]

Hey, what's up? Dr. John Deloney here. The new dates have dropped for the money and marriage getaway over Valentine's day weekend in 2026. This is your chance to hit pause, pause on everything in your life and reconnect with your spouse over a long weekend in Nashville, Tennessee. Me and my friend Rachel Cruz will be digging into topics like sex, money, communication and more. This weekend is happening on February 12th through the 14th and early bird prices start at 749 per couple, but the prices will be going up soon. Get your tickets [e-mail] events.

[Rachel Cruze]

If you are between comparing quotes and trying to figure out coverage that you need when it comes to your home and auto insurance, it can be pretty overwhelming and it can be very, very pricey. And so if you let a Ramsey trusted pro do the hard work for you, they are the best because they shop rates, bundle policies and get you the right coverage, saving you time and money. So for the smarter way to shop for your insurance, your home and auto, go to ramseysolutions.com bundle ramseysolutions.com bundle or click the link in the description if you are watching on YouTube or podcast, podcast. All right, let's go to Loretta in Ohio. Hi, Loretta. Welcome to the show.

[Jade Warshaw]

Hello.

[George Camel]

Thank you so much for taking my call.

[Rachel Cruze]

Absolutely. How can we help today?

[George Camel]

So my husband has a job that he loves, provides very well for our family. He brings in approximately 115 a year. Loves his job, however, has a lot of headache with it, kind of he has a high position in the company and so he has a lot of the headache of the company. And so recently we have been thinking about branching out on our own. We just aren't sure if it's financially the right time for our family to do so.

[Jade Warshaw]

What kind of business is it that you guys would branch out to?

[George Camel]

So he has been in the automotive business, auto and fleet, like working on cars for almost 15 years now. He's been working within him Corner now for 10 years, which happens to be my brother. So that kind of makes it a little bit stickier. Oh, yeah, a little bit, yes. But he's also, I mean, they respect each other. We don't think that there would be any hard feelings, however, I mean, the two of them kind of. My brother branched out on his own and six months later my husband started working for him. So they've kind of Built the business from the ground and he just. My brother is a lot of the time not there at the business and so my husband really just kind of takes it under his wings and does that and so. And he does really well with it. He's really good at his job, gets treated well. I mean with nothing bad to say about the company.

[Rachel Cruze]

Sure. So what would you guys be doing? You said you're going to branch out. Have you guys done anything on your own sidewise that you have started and that you were kind of going to merge into or with this person? Be like. Because I don't want it to be a light switch.

[George Camel]

Yeah, no, he'd be in the same business. So we're thinking about starting our own auto business in the same townshop. Basically it would be a couple towns over. So I mean as far as taking clients or anything like that is not the plan we do. We have talked to somebody that is willing to put up a shop and rent it out for us. And so we would be paying rent for that for the company in the beginning. Real estate where we're at is really expensive. So that kind of has been out of the option for us to be buying and building.

[Rachel Cruze]

Sure.

[George Camel]

So we have a place that we can rent. We've looked into equipment and things like that. How we would need to be getting a loan.

[Jade Warshaw]

Oh, that's the kicker. Tell us how much it would take.

[George Camel]

That's the kicker. We are hoping we can do it between 150 and 200,000. And we don't have any debt personally for our family. Like we've paid off all expenses except for our mortgage. And we, we, we have a mortgage we started with 485 years ago and we are down to 240 now.

[Jade Warshaw]

So can I clarify with you because I love that you paid off the debt but it's not going to convince me to tell you to go into 200,000 of debt with the automotive. I want to make sure I have the right thing in, in my head of what it is. Is it. Explain it more. It's not he's working on cars, it's what it it. Or is it that he's working on.

[George Camel]

Cars when they started. He worked on cars for almost eight years that he mechanically would fix them. So we expect in the beginning of us starting our own thing he would need to go back to doing that.

[Jade Warshaw]

Okay. Right.

[George Camel]

And kind of build himself up to where he's at right now. So. And he's more than willing to do that. But right now he is Strictly in the office for the business that he's at. He does talks with customers. He has a great relationship with.

[Jade Warshaw]

Is.

[George Camel]

He's kind of the glue for the clients in the business, basically. And he. He has a gift of speaking with people.

[Rachel Cruze]

Okay, so tell me this, Loretta. What's causing him to not. Does he just want to own his own thing? Is that, like, one of the main motivations? I'm just wondering if he can scratch this itch within the gig that he has so you don't have to take $200,000 of debt because you guys can't afford to start a business right now, the Ramsey way, at least. And. And so is there a shift that he can make within this business? Because it sounds like him and your brother have a really great relationship, the way you set it up, which makes sense. Like, we. I work in a family business. I'm like, there is a way to do it in a healthy way that you respect each other. So is there some shifting that can happen either from pay or his position, or is it that he just wants to completely do his own thing and not have to handle? Because if. If he's good at it, he's going to end up growing his own thing. And I'm scared he's back. Right back in the position he's in now, in a sense, as an owner. But that's even more risk and more stress that you put on.

[George Camel]

Yes. And I think it's not so much he's not looking to get rid of the stress or.

[Rachel Cruze]

Okay.

[Jade Warshaw]

He just wants it to be his.

[George Camel]

Responsibility of the business without actually owning it.

[Rachel Cruze]

Okay. Okay.

[Jade Warshaw]

Can I ask a question? So you said it'd be a couple of towns away. Is it like. Is it a situation where. If he. If he wanted to. If. Let's say you guys move and it's 45 minutes away, could he start kind of building up a clientele in another town whilst he's working elsewhere? If it's not pulling clients. Do you see what I'm saying? If it's. If it's not competing with the other business, can he start small? Is there a way, you know, on.

[Rachel Cruze]

His off days, kind of start doing this. Yeah. On a small scale and you guys build up some extra income from this kind of looking at. As a side hustle.

[Jade Warshaw]

Yeah.

[Rachel Cruze]

Um, could he do that? Like, is there a place. I know you have to have machinery and different things, but, like, is there. I don't know any creative ways to do that?

[George Camel]

In one way, yes, maybe. But in another, we would also have to you would still have to buy your car lists and things like that and those. I mean, you're looking at 20, 30,000 per list.

[Jade Warshaw]

But what if he rented out a place that was already like, is there a way that he can rent out this? This was already an auto body shop and we're just renting it.

[George Camel]

Yeah, I mean, I guess we haven't really thought about it in that way. It's just him leading this company. He has no reservations, if I'm being honest. Like he, and I know, like, he'll thrive if he does this. I'm the one that is kind of holding back. And here's the kicker also in. I'm one semester into nursing school as a mom of three. And so when I made this commitment to do nursing school, we really wanted to go through it without taking any loans. I don't want any student loan debt.

[Jade Warshaw]

And are you.

[George Camel]

No, I haven't. And, but I'm, I'm scared that if he does this and we pour everything into the business and then we'll just get overwhelmed.

[Rachel Cruze]

Yeah. It's a lot. Doing a lot and it's a lot of. Yeah.

[Jade Warshaw]

I think that if I were in your shoes, if this was Jade and Sam, I, I probably would want to have the conversation of. Here's the thing. I understand that you, you're getting anxious where you're at. This was, this is the season that I'm going to school. And I don't think that we can do both of these at the same time. I'd like to finish the course that we set. And if we do that, we might look up and we may have saved a lot more towards your goal. I think we do both of our things, but I think we stay the course. I finish school, we save what we can and then we're able to tackle. Because to your point, he's feeling stressed right now, but he's not in a toxic work environment.

[Rachel Cruze]

Nothing is, nothing's on fire. Yeah. So, Loretta, when you start nursing, when you, how long will it take you to graduate? Two years, four years?

[George Camel]

I'm not going full time because of the kids. I have a three year old that's not in school yet, so we're looking between three and four.

[Rachel Cruze]

Okay. Okay. And then when you graduate, are you going to be working 40 hours a week? What are you going to be doing?

[George Camel]

I'd love to. By then my kids would be old enough. I've always been very career oriented. I love having that for myself. And so as of now, that's the plan. Yes.

[Steve]

Okay.

[Rachel Cruze]

Okay. Yeah. I don't know, Laura. It just.

[George Camel]

It.

[Rachel Cruze]

Because the. Because the ideal would be like, you start working as a nurse and you're bringing in a great paycheck. He's bringing in 115, and you guys, cash flow. But it's going to be a while. So that's. That's the problem. But you called the Ramsey show, and we move at the speed of cash, even at business, and you're moving at.

[Jade Warshaw]

The speed of cash with your degree. And so I think you've set the precedent for that, that you can then say to him, can we please do the same thing with this business?

[Rachel Cruze]

And I will say we kind of threw out some creative options, and you said we hadn't even thought of that. That's the beauty about not living with debt. When you don't have debt as an option, suddenly you have to think of other options outside the box. It forces you to. And so sit down and have some. Yeah, some dreaming. Because it sounds like from a value standpoint, you guys are going against your values on a dream. And that is a red flag for me. Our scripture of the day comes from 2nd Chronicles 20:15. This is what the Lord says to you. Do not be afraid or discouraged because of this vast army. For the battle is not yours, but God's courage is fear that has said its prayers. Dorothy Bernard. Courage is fear. Than a sentence. Prayers. There you go.

[Jade Warshaw]

Okay, I'm with it. It took me a minute, but I got it.

[Rachel Cruze]

Yeah, we'll go there. Some of these quotes, you gotta. You gotta think twice. You gotta read it twice to really let it sink in. All right, let's have Christina from Baltimore. She is up next. Hi, Christina. Welcome to the show.

[George Camel]

Hi. Hello. Hello.

[Rachel Cruze]

Hello. How can we help today?

[George Camel]

Yes. So I am calling because my husband, he's not the best person in regards to finances, the most responsible person in regards to finances. So we've kind of been having some. A bit of trouble on his end for some years now, actually. And due to that, I was the one basically holding majority of the weight. He would contribute, but it was minimal. So I was more so, you know, picking up the weight for us and for the household. And it was under the pretense of when he kind of get things together and kind of get back on his feet, of course things would be better, he would contribute more. But what ended up happening is not too long ago, I actually ended up finding out that he received a nice sum of money and he decided to intentionally not tell me anything about it, how much it was about 20,000.

[Rachel Cruze]

So good night. Wow.

[Jade Warshaw]

Yeah, that's an offense. That hurts.

[George Camel]

Yeah, very much. Very, very much. Like, I mean, I been doing a lot, and we have a son who first year college. I. I've been the sole person who's been, you know, contributing to that and doing everything in regards to that with no help at all from my husband.

[Jade Warshaw]

And what does he do, Christina? What's his. What's his job or what does he do when he is working?

[George Camel]

Well, he's. He's a plumber. And, you know, he also, like, does side jobs. Like, he had his own business at some point, so he also, you know, had that going on on the side, but his main job is a plumber.

[Jade Warshaw]

So do you think that. Do you think that he's earning money and you just don't know what he's earning and he's just giving you bits and pieces, or is he just not working, working? He's just not doing many hours.

[George Camel]

He's definitely working. He makes decent money. And so it's not really the money. That's the issue is his management of the money. That's the issue.

[Jade Warshaw]

Okay, so you have separate funds, and.

[Rachel Cruze]

What'S he doing with it that you're saying it's mismanaged? So is it. Is it. Is he deeply in debt? Is he spending everything?

[George Camel]

For the most part, he pays majority of what you can consider like. Or what he would more so consider, like his bills, kind of his bills that he came into the marriage with. So of course he pays those, whether it's debt or his car note, things like that, which was another issue that we had because his car note is, like, way too high. We agreed before marriage that he would get something else that would bring the car note down. When we got married.

[Jade Warshaw]

How long have you been married?

[George Camel]

It's been six years.

[Jade Warshaw]

So you. I mean, what you're describing is not a combined financial situation. When you say to him, you know, hey, I really. Are you saying to him that you want. What are you saying to him? Are you saying, I'd like to combine our money together so we can, you know, be on one page? Are you saying, hey, Leroy, you got to get busy? Like, you got to. You know, what. What is. What's the conversation that's being had? So we can understand.

[George Camel]

There's been many conversations, but overall, the way things have been going is not at all what they were supposed to be.

[Jade Warshaw]

Okay.

[George Camel]

Initially, we supposed to be doing everything together, even if it's kind of split in the bills half and half. So we Supposed to be doing everything together.

[Jade Warshaw]

And when you bring that to him, what does he say?

[George Camel]

His thing is just, he, the way things are going for him financially, he just feel like he can't. So he's doing what he feel like he only can do. Like, and that, that's his, you know, reasoning.

[Jade Warshaw]

And I, that doesn't have to do with. That doesn't have to do with. So if you said to him, hey, I want all of our money to go into one account, there's a lot of confusion here. You're saying one thing. I, I, I'm not saying I have an expectation. My only expectation is for our money to be together right now. If you said that to him, what would he say?

[George Camel]

Well, at this point, once I found out about the money that he received and did not tell me about, we got into an argument and he did not come home.

[Jade Warshaw]

Okay, so this is not money. This is not a money.

[Rachel Cruze]

And it was his defense. Well, our money's separate. I got my money, you got your money. Did he just see as, like, complete, just ownership of his own thing and didn't feel the need to tell you because of that?

[George Camel]

That's basically what he's saying.

[Rachel Cruze]

Okay, so, yeah. So to Jade's point, Christina, this is a massive marital situation that you have two people in a marriage, and a marriage is a union. It's one. It's a united covenant that we make together. And one person in the marriage is wanting to, to do their own thing. And that's becoming in conflict with the value of marriage of what you were wanting out of a spouse. And so, yeah, I mean, I think in order to save this, this is a classic example, people say money fights and money problems cause divorce, that it's not really the money thing. It exposes the brokenness within the marriage, which is what's happening to you guys. A level of secrecy out of entitlement of his own thing. Over here. You're over here wanting something completely different. So your value and your outlook on how marriage and how we should function is completely separate. And so I want that fixed. Do you guys have kids together?

[George Camel]

We do. Yeah.

[Rachel Cruze]

You do. Okay, so what I would do, I mean, I would work so hard, which I know you are. I can tell. I can hear it in your voice. You're exhausted. You're exhausted. Have you guys done marriage counseling or therapy together?

[George Camel]

No, not exactly.

[Rachel Cruze]

So that would be my next step, Christina. And if he's not willing to do that, I would say you do what you can on your end, and then there Gets to be a place where a spouse ends up not even really even being a spouse. I mean, like, it ends up being partner.

[Jade Warshaw]

Just roommates.

[Rachel Cruze]

Yeah, you become. It becomes a roommate situation. And. And that's where people make really tough calls, and I don't want that for you. My prayer would be that there's redemption and that you guys can find a united front, but you may just need a third party, because even in the call, Christina, I'll be honest. I was trying to keep up with everything you were saying, and it is. It's a. It's a little bit of a spider web situation feeling of what he's thinking about his. I don't know, I can't quite see clarity. And sometimes, Christina, you know, you're living in this mess and in this fog and in this cave chaos and bringing in a professional third party to sit down with you guys and start really working through the issues. Because I think what you're going to find pretty quickly is that it's not money issues. This is being. This is stemming from a lot of other places in his life and in your life, because things are stirring up in you as. As they should and stuff with him. And he's. There's, like, this level of control and protection he's wanting, and. I don't know, for the sake and the health of your marriage. That would be my next step. And I wish always in these calls, Jade, that we can help further. But I think there's a lot of deeper brokenness in this, that you guys are gonna have to have a long timeline to mend and to heal. And I hope that for you, we always want that. We never want to.

[Jade Warshaw]

We don't want people to split up, and we certainly don't want them to split up over what's perceived to be just a money thing.

[Rachel Cruze]

Yes, that's right. That's right. And so for both of you, my prayer is that you guys both want to fight for this marriage, because it's not. It's going to continue to go down this road, and it's just going to get worse and worse and so hitting it head on, both of you. And my prayer is that both of you want to work and find this unity, but I would go to marriage counseling. That'd be my next step, Christina. But I'm so sorry. I'm so sorry. I feel that weight for you, and I want that off. I want you guys to have a clear path of peace and prosperity in your marriage. Well, Jade, thank you for a great show.

[Jade Warshaw]

It was fun.

[Rachel Cruze]

Rachel, thanks to everyone in the booth and thank you, all of you watching and listening to the show. And remember to take control of your money and create a life you love.