There Are No Shortcuts To Building Wealth

Summary

The Ramsey Show (October 21, 2025) — Episode Summary

Episode Theme:
There Are No Shortcuts To Building Wealth
Hosts: Jade Warshaw & Rachel Cruze
The episode’s central focus is on debunking the myth of financial shortcuts. Instead, Jade and Rachel drive home the importance of intentionality, self-awareness, teamwork, and good old-fashioned discipline in the journey to build wealth. Callers share challenges with debt, budgeting, job changes, insurance, and more, receiving practical advice and encouragement rooted in the Ramsey philosophy: slow and steady wins the race.

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Key Discussion Points & Insights

1. Tackling Large and Complicated Debt — “The Debt Snowball” (00:35–09:00)

• Matt from North Carolina details $60,000 in non-mortgage debt (cell phone, medical, two vehicles, credit card, family loan).
  • Jade and Rachel recommend the debt snowball: pay minimums on all debts, aggressively attacking the smallest.
  • Self-awareness is key: Matt admits to lifestyle creep after a raise. “We're both spenders and we realized that yesterday…” (02:33, Matt).
  • Suggestions include selling the truck (preferably private sale), possibly going down to one car temporarily.
  • Quote: “Everything’s a big deal now. It kind of feels like everything’s on fire even though you guys are gonna be fine.” (06:23, Rachel)
  • Action step: Use the EveryDollar app to maintain discipline, budget together, and avoid returning to old habits.

2. Emergency Planning vs. Debt Payoff — Navigating Uncertain Times (10:49–15:46)

• Samantha from South Carolina: On Baby Step 2, paying off debt, but her family is hit by a government shutdown (lost half their income).
  • Should she switch to emergency fund savings?
  • Rachel recommends pressing pause: make minimum debt payments until regular income resumes, but don’t shift fully to Baby Step 3 unless a layoff or specific crisis is imminent.
  • Memorable moment: “There’s more peace in having no debt and payments when things like this strike…” (13:40, Jade)
  • Preparedness is key, but so is sticking to the plan unless true emergency arises.

3. Major Milestones & Home Buying — “Don’t Jump Steps” (15:49–20:32)

• Sean from Maryland: New $100k job, wants to buy a house, but still has $18k student loans.
  • Advice:
    1. Pay off student loans first.
    2. Build emergency fund (3–6 months).
    3. Then, save at least 5% down payment.
  • Avoid first-time buyer programs with poor terms.
  • Quote: “If you start making moves out of order, it causes way more stress down the line.” (18:30, Rachel)
  • Use the mortgage calculator to ensure payment fits 25% take-home rule.

4. Business Lessons — Recovery, Trust, and Transparency (22:32–32:26)

• Lewis from Florida: Pest control business owner, narrowly avoided financial disaster, asks about trusting himself after making big mistakes.
  • The hosts highlight self-examination, communication with your spouse, the dangers of isolation, and ego.
  • Quote: “You can’t out-earn your stupidity.” (31:03, Rachel quoting Dave)
  • Transparency with your partner and learning from the root causes of financial missteps are paramount.

5. Young Professional Wealth Building & House Hacking — Go Slow, Be Careful (34:05–43:08)

• Sebastian from Virginia: 23, new $70k job, no debt, wants to start investing and house hack.
  • Jade & Rachel emphasize:
    • Prioritize emergency fund before additional investing.
    • Invest 15% of gross income; max Roth IRA, then 401k (even w/o match).
    • If house hacking, ensure ability to cover full mortgage without roommates.
    • Avoid overleveraging; patience trumps get-rich-quick.
  • Notable moment: “People that keep wealth, they do it slow and steady. It’s not a get rich quick thing.” (42:39, Rachel)

6. Joint Finances & Gift-Giving in Marriage (44:26–47:36)

• Kim from Tennessee: Newly combined finances, asks how to discreetly buy gifts for a spouse.
  • Suggestions: use gift cards, have trusted friends/family buy on your behalf, communicate around big gift purchases.
  • “It is the true mark of somebody trying to do this all.” (47:26, Jade)

7. Life Insurance for Children — What’s Necessary? (47:36–52:41)

• Kenny from Mississippi: Four kids under six, has $150k policies for each.
  • Hosts clarify: Child life insurance is not necessary beyond $20k (for burial). Life insurance should be for income replacement.
  • “We don’t do it by lump sum. We do it 10 to 12 times your income.” (49:08, Jade)

8. Handling ESPP Taxes vs. Paying Off Debt (54:34–58:40)

• Ashton from TX: Paid down massive debt with employee stock plans, wonders if he should use tax savings to finish car payoff.
  • Rachel and Jade say: If you can cash flow the tax bill, pay off the car and be done.
  • Mind the upcoming April tax deadline, but prioritizing debt freedom is applauded.

9. Learning from Expensive Mistakes & Relationship Boundaries (58:48–66:36)

• Austin from NC: 25, $35k consumer debt, regrets new truck purchase, questions about supporting fiancée financially.
  • Advice: Slow down! Begin aggressive payoff, practice patience, avoid co-mingling finances until married.

10. Merging Finances as Newlyweds — Budgeting 101 (66:36–75:30)

• Ryan from TX: Newly married, $48k debt (mostly his), wants to get on a plan.
  • Combine finances fully, use EveryDollar, attack debt smallest to largest.
  • Both partners must participate in and agree on the process — being “on board” matters.

11. Wills, Trusts, and Estate Planning — What You Need to Know (77:01–80:37)

• Explains when to use an online will (for estates < $1M), key prep questions, state law issues, and when to call in an attorney.
• “There are times you can just do these things yourself, but when things get complicated…bring in professionals.” (80:05, Rachel)

12. Insurance Choices — Health Insurance & HSA Dilemmas (80:37–86:25)

• Gina from FL: Frustrated by unused expensive health insurance, wants to drop it and invest the premium.
  • Hosts strongly advise against going uninsured; insurance is for catastrophic scenarios, not just expected needs.
  • “You’re paying for peace of mind… hundreds of thousands, millions of dollars.” (85:14, Rachel)

13. Supporting Artists & Career Planning in Creative Fields (88:01–97:52)

• Jasmine: Husband’s musician income declining; should she encourage new directions?
  • Jade: He needs to network, diversify, honestly assess strengths, and clearly define next steps. Life circumstances (new baby, moving) must be factored, but long-term plans are critical.

14. Premarital Money Red Flags — Don’t Ignore Value Mismatches (97:52–101:55)

• Ryan from Vermont: Engaged, fiancée wants on house deed without financial contribution, has trouble managing her own finances due to expensive horse hobby.
  • Hosts: Do not get married until your value systems are aligned!
  • “If you’re not aligned on a value system at which you approach money, you’re going to have an uphill battle to climb.” (101:06, Rachel)

15. Car Buying on a New Job — Stay Debt Free (102:49–107:13)

• Keaton from Chicago: Needs first car for new job; has $30k saved.
  • Buy used, avoid leases/car payments, keep car cost well below annual income; maintain 3 months’ emergency fund after purchase.

16. Giving (and Lending) to Family — Boundaries & Risks (108:41–117:07)

• Ann from CA: Gifted $245k to buy sister a house, worries about recovering property if sister dies.
  • Clear legal agreements in writing are crucial.
  • “You’re on the edge, if not the textbook, of an enabler.” (116:11, Rachel)
  • Generosity great, but must set boundaries to avoid chaos and relational tension.

17. Work/Life Balance — Guilt, Family, and Independence (118:38–127:26)

• Lewis from NYC: Young adult, hustling over 100+ hours/week to crush debt while living at home, feels guilt about not spending more time with aging parents.
  • Hosts affirm his work ethic; recommend finding balance, seeking independence without guilt, and recognizing when guilt is externally imposed.
  • “There is a natural break that happens... For some parents... there’s a codependence there.” (124:45, Rachel)

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Notable Quotes & Timestamp Highlights

On Debt:

• “Everything is a big deal now…Kind of feels like everything’s on fire even though you guys are gonna be fine.” — Rachel, 06:23

On Shortcuts:

• “People that keep wealth, they do it slow and steady. It’s not a get rich quick thing.” — Rachel, 42:39

On Marriage and Money:

• “You’re both adults. Let’s just call it what it is: we’re a married couple, and we’re sharing our life together.” — Rachel, 69:02

On Generosity:

• “Solving problems with just money doesn’t always work... it can leave people in a cycle of irresponsibility.” — Rachel, 116:11

On Learning From Mistakes:

• “You can’t out-earn your stupidity.” — (Quoting Dave Ramsey), 31:03

On Life & Goals:

• “Appreciate when things go awry, it makes for a better story to share later.” — Simon Sinek (Show Quote of the Day).

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Additional Memorable Moments

• Emotional weighing of family support vs. financial independence (Lewis, 118:38): importance of creating healthy boundaries as a young adult.
• Navigating nontraditional insurance and health care (Gina, 80:37): the $6,000 premium pain, but wisdom in carrying catastrophic coverage.
• Dealing with the emotional aftermath of financial misjudgments and change (Lewis the business owner, 24:05–32:26): “No more isolation. No more secrets.”
• Premarital tension around property/finances: candid discussion about red flags before merging lives (Ryan in Vermont, 97:52).

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Conclusion

The episode is a masterclass in the core Ramsey principles:

• Build wealth intentionally—no magic, no shortcuts.
• Face financial facts with courage.
• Communicate openly with partners and family.
• Understand your money personality and habits.
• Choose slow, steady, and sustainable over fast-but-risky.
• Establish boundaries in giving, relationships, and planning.

The advice is direct, practical, and empathetic, reinforcing why "normal is broke" and “weird” is wealthy and peaceful.

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Want to Catch a Specific Segment?

• Debt snowball for new budgets: 00:35–09:00
• Government shutdown/emergency fund questions: 10:49–15:46
• House buying with student loan debt: 15:57–20:32
• Learning from business mistakes: 22:32–32:26
• Young investor/house hacking: 34:05–43:08
• Gift-giving while sharing finances: 44:26–47:36
• Life insurance for children debate: 47:36–52:41
• Using ESPP for debt payoff & taxes: 54:34–58:40
• Work/life balance guilt: 118:38–127:26

Skip the shortcuts. Take the proven path—with urgency, discipline, and teamwork—and you’ll discover there’s no “hack” better for your future than that.

Transcript

[Sponsor/Announcer]

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

[Jade Warshaw]

Normal's broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union studio, this is the Ramsey Show. I'm Jade Warshaw. Next to me, Rachel Cruz. Taking calls from you guys for the next couple hours about your life and your money. You can get involved, and we hope that you do. In the meantime, we're going to Matt, who's North Carolina. What's up, Matt?

[Caller]

Hey. How are y'? All?

[Jade Warshaw]

Good. How can we help today?

[Caller]

Well, my wife and I have been looking at our numbers, just the debt that we have, and we wanted to see what you guys would recommend. Now, I've got about 60,000 in just various debts aside from my mortgage, and we just want to figure out how to get rid of those in a systematic way.

[Jade Warshaw]

I love that. Do you want to list those 60,000 of debts out for us, like the type of debt and how much each one is worth? Yeah.

[Caller]

Yeah, I can do that.

[Jade Warshaw]

Great.

[Caller]

So I've got about 900 for a cell phone. Got about 1900 for medical bills. I have a truck that's about 29,000. I've got our family van that's about 9,600, and a credit card that's about 11,000. And then a loan from my family for about 12,000.

[Jade Warshaw]

Wow. How old are you guys?

[Caller]

I'm 33 and my wife is 30.

[Rachel Cruz]

When did you guys kind of tally everything up, Matt. And just realize, okay, here's. Here's where we are. Was that a recent conversation with you and your wife, or is this something that you guys have been.

[Caller]

You've not wanted to do a budget? It's been my fault because I've been. I haven't. I say I've been busy, but I could have made time. But we did yesterday, actually.

[Rachel Cruz]

Oh, yeah. So was yesterday the first time you saw all these numbers together in one place?

[Caller]

Yeah.

[Rachel Cruz]

Okay.

[Caller]

A little while. Yeah.

[Rachel Cruz]

Yeah, that's fine. Okay. So what were you thinking when you saw it? What did you think? Did you think it was more than what you would have guessed, or was it pretty spot on?

[Caller]

Yeah, I mean, it was around what I was thinking, and then I was like, what have I done? What am I doing?

[Jade Warshaw]

Yeah, I was gonna ask the same thing. What caused. Do you know what caused this for you? Does this feel like an income thing or does it feel like an overspending thing? Which, by the way, I didn't ask. What is you Guys income. So.

[Caller]

Well, I started a new job. I'm an insurance agent now and I make about 100,000 now. I've gained about 20,000 since last year. I started at 80, but it was. I was just looking at monthly stuff because I'd wanted to get a newer vehicle because my other one was wearing out and it was paid for. I should have kept it, but it's just we're both spenders and we realized that yesterday and we're like, you know, we're wasting too much money.

[Jade Warshaw]

What about your wife? Is she working outside the house?

[Caller]

No, she stays at home. We have three children under three.

[Jade Warshaw]

Oh, Lord help you. Okay.

[Rachel Cruz]

Got a house full, Matt.

[Caller]

Yeah.

[Rachel Cruz]

Okay, so. So it sounds like typical lifestyle creep. You got a $20,000 raise and you're just like, well, I can afford this payment. I can afford this and this is good. We'll just kind of keep going and enjoy that $20,000 of margin. And then it turns out $20,000 in debt more. So. Yep.

[Jade Warshaw]

Yeah. So I would suggest, I mean, I know you're kind of new to this, you just laid this out the other day. But I'm going to suggest the debt snowball, which is we. What we suggest to everybody, which is you're listing the debt smallest to largest. The method is you pay minimum payments on everything so that you don't get behind because if you get behind, then it really gets out of control. So make sure you make making minimum payments on everything, but all of your extra margin is going to go towards the smallest debt with a vengeance. Like you're going very, very quickly. And so as much margin as you can find. Which leads to my next question. I'm assuming that you don't have any savings lying around anywhere. Is there extra money that we should know about stocks?

[Caller]

I mean, we had. I've got some crypto, it varies. It's XRP. So it'll be 271 day and the next day, you know, it'll be up or it'll be lower. I've got some in Nvidia. It's not much. It's about $210 worth.

[Jade Warshaw]

Okay.

[Caller]

So just some play money mentioned the mortgage too, on the house. So I was going to say that.

[Jade Warshaw]

Yeah. Just tell me what the mortgage is, by the way.

[Caller]

218.

[Jade Warshaw]

218. And what do you pay every month for that?

[Caller]

1628.

[Rachel Cruz]

Matt, is your job. What do you do for a living?

[Caller]

I sell just auto home insurance.

[Rachel Cruz]

That's right. That's what you were saying.

[Jade Warshaw]

Okay.

[Caller]

Yeah.

[Rachel Cruz]

Is there margin for overtime in that position? Whether that's getting like more like working more just to get more commissions and more accounts or from like a salary perspective even, what would that look like?

[Caller]

Well, see, since I'm 1099, I was given a book of business when I got here. But it's my job to, you know, I can grow it as quick as I can. Cause I mean, I work 247 if need be, so.

[Rachel Cruz]

Yep, yep. Okay. Okay. Because the way I'm looking at this, I mean it's added up close to 60,000 and you're making 100,000 and that's probably before tax and health insurance and all of that. So. Yeah. Are you contributing anything to retirement at all?

[Caller]

No.

[Rachel Cruz]

No. Okay, perfect. Yeah. So what Jade's saying, I mean, that's it. I mean, you know, Matt, the, the problem is going to be you and your wife. You know what I mean? Because you're going to have to change the way you've been handling and viewing money like a 180. Like you said, we're both spenders, which I appreciate the self awareness. I get it. I'm a spender. Like, I understand. And so you're going to have to do things that you've never done before. You're going no to yourself in places that you've always just said yes. Because of course we'll just go out to you. Of course we'll just do this. Yeah, yeah, yeah. Or things didn't seem like a big deal. Everything's a big deal. Now it kind of feels like everything's on fire. Even though you guys are gonna be fine, it's not like, okay, bankruptcies around the corner. It's not that. But the sense of urgency, like what Jade was saying earlier is gonna be, have to be notched up like 10,000 notches for you guys specifically. You know what I mean? Cause we talked to some people and they're, they're natural savers. It's okay. But when you have two spenders, which again, it's not a bad thing, it's just how you guys are wired. This is going to just take that much more of a discipline and so, yeah, paying it off. But I'm like, yeah, get the cell phone out, do the, get the medical debt, have some lofty goals that if you, even if you worked extra at a different job, whatever is more lucrative for you to make extra money. I don't know if that's working more at just like the insurance job to get more accounts or just work more. Yeah. And if you can up it, Matt, I'm not kidding. You know, I mean people are driving or doing like UberEats and making a thousand easy. That's your low bar. You know, if I'm you, I'm like, I'm making 2,3000 extra a month and you can start knocking this stuff out pretty, you'll start to see a lot of progress, which is great when you plug these numbers.

[Jade Warshaw]

Have you plugged this into an every dollar budget, Matt?

[Caller]

No, not yet. We had that app and then we stopped using it because I slacked off on and that was the problem. But I wanted to ask real quick before I forgot, I did have an offer for a dealership to buy my truck for about 25 or so and I have 29,000 on it. Do y' all think it'd be a good idea to just go ahead and sell it?

[Jade Warshaw]

Yes, but not to them. Okay, do it private sale. Because if the dealer's giving you 25, then you may think you would get 29, I bet. But the key is now I don't know how long you guys can go with just the van. But the key is you're going to have to stack up some cash, right, to get something in the meantime to get you to and from work and you don't have to spend a lot on it. Maybe you spend 6,000 bucks on it. But just know that yeah, for a while you guys are going to be a one car family, which that could be a challenge with three under three, but all things are possible.

[Rachel Cruz]

So I mean there's, there's families here that the, you know, I mean, honestly, the wife drops them off at work and they go, you and Sam were a one car family for, for a decade.

[Jade Warshaw]

Rachel Cruz.

[Rachel Cruz]

Yes. So listen, it is doable, Matt. Doable. So it's just again, it's going to, your life is just going to look different for a period of time and then you guys can get back and enjoy the fruits, labor and be some great responsible spenders and have fun. Like that's not the bad, that's not bad or wrong, but you just got to do it in the right order. And you guys went out of order spending more than you make.

[Jade Warshaw]

So yeah, homework is every dollar. You got to get on there tonight, you and your wife and we'll hook you up with a, a trial of the new every dollar, the new and improved one. Cuz that's really going to help you out.

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[Caller]

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[Jade Warshaw]

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[Caller]

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[Jade Warshaw]

Please review our website terms for more information. In Columbia, South Carolina, Samantha's on the line. What's up, Samantha?

[Caller]

Hey, Jade. How are y'? All? Thank you for taking my call.

[Jade Warshaw]

You bet. How can Rachel and I help?

[Caller]

Yeah, so my husband and I are 11 months into baby step two. We're putting like three or 4,000amonth toward our debt.

[Jade Warshaw]

Way to go.

[Caller]

We paid off work. Yeah, we paid off four credit cards and one of four student loans.

[Rachel Cruz]

Oh, my gosh. Good for you guys.

[Caller]

Thank you. So the last three student loans are kind of our big fish. And we were on track to get those done. We have about a hundred, so we're on track to get those done in about two years. But my husband is a federal employee, and with the government shut down, we are experiencing a hold in his paycheck. So about half of our monthly income right now is being held.

[Jade Warshaw]

Dang. How much is that?

[Caller]

5,400 take home right now out of. Out of 11,000 take homes a month. Yeah. So we're just kind of trying to get by, but I guess in the future to be prepared for this again, I was wondering if this would be a weird situation where we maybe go to baby step three and save an emergency fund and then come back and hit those last three student loans hard.

[Rachel Cruz]

I don't know if I would do that, but I think I would pause baby step two right now. I probably. I would not be. I mean, you guys don't even have money.

[Jade Warshaw]

You don't have it. Yeah.

[Rachel Cruz]

You don't have money to put extra. Right.

[Jade Warshaw]

Because you were putting 4,000 margins.

[Rachel Cruz]

Yeah. Are you guys able to stay current with all the bills, all your bills, even housing and all of that?

[Caller]

Yeah, it's going to be, it's going to be tough in the next month. But I'm just really thinking in the future if this happens again. That's kind of where I was going with that. So as of now, yes, everything's been halted. We're making minimum payments on everything since middle of October, you know, two years ago.

[Rachel Cruz]

Sure. Yeah. But I guess to be prepared. Yeah, I hear you. Yeah, I hear you totally. But really the only time that we would suggest that is if there's something in the immediate future that you're certain of, like, oh, there's gonna be like, we have people call and they're like, okay, they're laying us off in three months. We would say like, sure, pause everything, pile up an emergency fund because it's happening, or even a health situation, you know, like there's a family member or child that's sick. We would say, okay, get some funds in place. Cause you know that's gonna be some ongoing challenges. But I hear, and again, we're in the middle of a government shutdown, so it's harder say this to you to be like, we don't know if it's going to happen again, but it is a question of like, I don't know when it is, if it is, who knows? And because of that uncertainty, you almost would think I would want an emergency fund because of that. But I would actually say because it is uncertain, you don't know it's going to happen. So I would rather get this debt cleaned up faster because of it. So that's what I would suggest.

[Jade Warshaw]

There's more peace there. Because if you think about it just in terms of the numbers, let's pretend that instead of paying off the hundred thousand dollars of debt, you stacked up, I don't know, $20,000. Right. Well, now you still have all the payments that you have to pay along with your normal month to month budget. So you're still going to clip through savings a lot faster because you've got this extra debt there. Whereas if you said, I'm going to focus on paying off my debt first, then if it rains and pours and maybe you have a little bit less saved because it's, you know, you haven't had as much time your lifestyle Is still pared way, way, way, way down. Right. So you're not having to pay debt payments on top of whatever it takes to live. So I really. I get where you're coming from, but at the end of the day, I think there's more peace and having no debt and payments when things like this strike versus having. It's almost like insult to injury when you have to use hard saved money to pay. Yeah.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

So.

[Rachel Cruz]

So now we would still say probably be Gazelle Intense Samantha.

[Jade Warshaw]

Yeah. Oh, sorry you're going through that. Hopefully that gets cleaned up soon.

[Rachel Cruz]

You know, I've had so many people message me on Instagram and thankfully more on the positive end of. You know, they're probably three years from where Samantha is. Cause they're like, oh my gosh, if we didn't have an emergency fund and we weren't used to living on less than we make and the government shutdown happened. Cause they've lost. You know, they're like, we're good. Like, we have six months saved. Like, we're able to like, even squeeze our lifestyle down, and we're okay with that. Cause they've walked through paying off debt. You know, so there's like the. The saving grace of why to do this.

[Jade Warshaw]

That's right.

[Rachel Cruz]

As fast as possible. Because if and when life happens. Yes, you're set.

[Jade Warshaw]

That's right. And if, you know, you do have a job that has the propensity for layoffs or things like that, it is good to kind of know. It's like having an emergency plan. Do you know what I mean? If there's a fire, you know where the exits are. It's the same thing if you're in a job where, hey, I kind of know, like, a layoff could happen from time to time, or in the case of a government, a shutdown could happen from time to time. And knowing, okay, when that happens, here's what we do, here's what our budget looks like. These are the things we cut out. This is how we live. And we. That. That's kind of our. Our plan.

[Rachel Cruz]

But it could go four or five years without it.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

You know what I mean? And you don't need it.

[Jade Warshaw]

That's right. That's right. All right, let's hit the phone line again. We've got sean in Washington D.C. maybe he can tell us something, help us out. Sean, what's up?

[Caller]

Sean, Hi.

[Jade Warshaw]

Good morning.

[Caller]

Afternoon, ladies. Thank you for taking my call.

[Jade Warshaw]

You're welcome. I'm sorry I said it was a he. I like Sean as a Girl's name too.

[Caller]

Thank you. So, just a little background about me. I am in my early 30s. I live just outside of D.C. but on the Maryland side. I don't have any kids. I'm single. I just received a really good job offer for my first six figure job. So I'll be making $100,000 soon.

[Rachel Cruz]

Congratulations.

[Caller]

Thank you so much. So my question is, I do want to buy a house next year. I just renewed the lease on my current apartment. I'm currently paying $1,300 a month for my apartment next year. I do want to purchase a house, but I have student loan debt that's about 18,000 dol. So my question is, do I just save up for the down payment on the house or just pay off the student loan since I'll finally be making six figures now?

[Jade Warshaw]

Ooh, listen, I love that you're making six figures. I think that that is so exciting and I'm happy for you. That's really a milestone. If I were in your shoes today, Sean, my biggest priority would be twofold. Number one, I'd be like, I'm getting these student loans out of my life once and for all. They've been around long enough. I make, you know, 18.

[Rachel Cruz]

You can do this.

[Jade Warshaw]

Yes, I make six fig. Knock them to the curb as fast as possible. Then if you're really considering home ownership, let's talk about this in real talk, which is what you'll really need. It would be foolish for you, Sean, to just roll out and buy a house with no savings. Can you agree with that? Because once you buy a house, everything's on you. The air is on you, the roof is on you, the yard is on you. Something breaks, it's on you. Right. So the better way to enter that would to make, to make sure you have three to six months saved. Could you agree with that?

[Caller]

Yes, that's more reasonable. And I have looked into first time home buyer programs and one of the stipulations I found was a program that offered to pay off my student loan debt, but it will not give me an additional funding for, let's just say the down payment.

[Rachel Cruz]

Yeah, no, a lot of those programs, Sean, are, I mean, honestly towards people that are broke, I mean, trying to get them in a house. And so right now I would say for you, yeah, those probably look appealing because you're like, I can get this faster. But I think this one year timeline, that's just self imposed, right? No one's forcing you to buy a home next year. You just want to, right?

[Jade Warshaw]

Yes.

[Rachel Cruz]

Yeah, of course. Yes, I know, 100%.

[Jade Warshaw]

And I don't want that for you.

[Rachel Cruz]

Yes, 100%. And I think the new income has got you excited to be like, oh my gosh, I can actually start doing, making some big moves. But if you start making moves out of order, it causes way more stress down the line. And so, yeah, I'm with, I'm with Jade. I would be, I'd pay off the 18,000, I'd save up an emergency fund. And for you, honestly, Sean, it could be three months. Like.

[Jade Warshaw]

Like start with three months.

[Rachel Cruz]

Yeah. You have a solid job. You don't have anyone dependent upon your income, like kids wise or a spouse or something, you know, like you're in a good spot. Three months would be totally fine with me. And then save at least 5% for a down payment because what those things are going to force, especially down payment, forces you out of these programs of what you're talking about because again, they're going to have terrible. They have adjustable rate mortgages. I mean, they have terrible interest rates. Usually they lock you into something.

[Jade Warshaw]

Yeah, Sean.

[Rachel Cruz]

And it's. And it's not worth it long term. I want you free of everything. Any program, any debt. All of it, Sean. So, yeah, getting out of debt and emergency fund first and then. And so that may pump the brakes. I mean, maybe nine months, Shawn. To. Yeah, 12 months maybe for you to do this.

[Jade Warshaw]

But I mean, I will, I will interject this. If you can, at 5% down, if you can get a payment that's 25% or less of your take home. Yes. But if you have to bump up that down payment because that. Yeah. You don't want to be more than 25% of your take home. And that's talking HOAs.

[Rachel Cruz]

Yes.

[Jade Warshaw]

Taxes, insurance, all of that in that payment, Sean. Can't be more than 25% of your take home or else it would be calling us back.

[Rachel Cruz]

Yeah. Maybe not next year, but maybe three years out.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Yes.

[Jade Warshaw]

The calculators on ramseysolutions.com, sean. That you can use. How much mortgage can I afford? And it's going to help you figure out what your down payment needs to be so that your month to month is okay.

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[Rachel Cruz]

Yeah. And with. What's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly, and they don't have life insurance. We actually took a question of a lady, and she had three kids pregnant, and husband didn't have life insurance. And I'm like, I can't even imagine. Or even if it was opposite, right? If a mom passed away, there's a dad with kids and trying to figure out, how am I gonna afford childcare? How do I outsource some stuff that maybe she was doing? Like. And it just takes the grief and the sadness of something like a sudden death to a whole new level. Like, when you have to think through, how am I gonna pay my bills.

[Sponsor/Announcer]

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[Rachel Cruz]

Yeah. In the middle of all that grief, like, it's just. It is. It's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm, like, so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And we keep re upping it because I'm like, I just want it there. Like, there's something about that safety of knowing that you have money. If something suddenly happens and it doesn't.

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[Rachel Cruz]

So that is one thing to do, to say I love you to your family.

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[Jade Warshaw]

All right. We're continuing to take calls about your life and your money. Tell us your situation. We've got Lewis and West, West Palm Beach, Florida, doing just that. What's up, Lewis?

[Caller]

Hey, guys. Good afternoon. Thank you so much for taking the call. I love you guys and everything that you do.

[Jade Warshaw]

Well, thank you so much. Thanks for calling.

[Caller]

So to keep it short, a pest control business, service business. We got through Covid really, really well and, you know, got a big head spread into five different cities. And we spread ourselves way too thin, but didn't realize it at the time, took a while, but we threw away all the money we had allowed myself to get up to my guild and credit, any credit that was offered we took at trying to get a quote phase, that it wasn't a fade. It was just a bad setup. And ultimately, kind of last February, we realized, hey, the game is over. Right? So we sold off, you know, the businesses that we could to get the investors their money back, and they were made whole. But we kind of found ourselves with a lot of bills, a lot of credit, a lot of debt, and a business that wasn't really earning enough, anywhere near enough to make that happen, to make the numbers work. So during that time, obviously, many were in a horrible spot, kind of rock bottom, you would say. And I found Dave Ramsey and all the teaching you guys do. And I should have probably sold the house, sold the expensive car, sold everything we own, bought it. Instead, I just dialed back any expenses. We had no nights out, no, you know, kind of fun money, none of that. And I said, let's give it two months to rebuild as strong as we can, as hardcore as we can, and see where we land. And it wound up working. We've quadrupled in the last eight months, and now things are finally in a place where we feel better and we know that we're going to a good place.

[Jade Warshaw]

Oh, great. What a turnaround.

[Caller]

But my question is, I felt super irresponsible for my family, for my childhood. We cut these things. Do we need to? And I'd just love to have a little more insight of, you know, how. Well, how. How much should you trust yourself in a turnaround or when you realize you're making stupid decisions, go down to the basics, like, should we have cut? Should we not? Because it could have very easily been 10 more months of failing, and then we would have done dug a deeper hole.

[Jade Warshaw]

Sure.

[Caller]

And God forbid, you know, we're never there again.

[Rachel Cruz]

But, yeah, I hear what you're saying, because you didn't cut certain things out of your lifestyle, if business had not quadrupled, you still probably would be in a bad spot.

[Caller]

Yeah.

[Rachel Cruz]

Is what you're thinking. Yeah. Do you know the motivation, Louis, of why you guys wanted to keep the house in the car?

[Caller]

My wife trusted me with a lot of the decisions, and maybe a good or a bad thing, but I didn't want to. First off, I didn't tell her. I bet it really was. And maybe that was a bad idea. But, yeah, I didn't want her to face the music the way I was trying to. Privately, yeah. And I said, all right, let me see if we can get ourselves past this and save her. That hurt and that. Because she's been through enough, I thought.

[Jade Warshaw]

Was any of that about you saving face, too, if she didn't know the extent of it?

[Caller]

No, no, no, not at all. She knew she'd still be there. She's amazing. I just didn't want to put her through any of that.

[Jade Warshaw]

I think the biggest thing here is understanding wisdom that you've learned going forward, because there's a lot of things that got you into this mess. And I think that a lot of times when we come out on the other side of things, if we haven't really examined what it was that got us there in the first place or all of the things that got us there in the first place. Yeah. There's the fear that, can I trust my choices? Can I trust my judgment going forward? But if you've done the work of examining that and understanding why you did what you did and why you're not ever going to do that again, then you can have a little bit more confidence. In this case. Yeah, I am seeing just some frivolous behavior, obviously, with money, but then there was the secretive nature of keeping certain things from your wife. I think there's just a. Some behavior that going forward can't be. Be the case. So I know if I were in your shoes, Lewis, going forward, I would be completely transparent with your wife about money and make sure that you guys are both owning roles within how you're handling money. So it. It can't all fall on you. It can't all fall on her. But together, you guys are in this and understanding what's our main priority? Why are we building what we're building? Why are we doing the things we're doing? Because it can't just be for the exterior. Right.

[Rachel Cruz]

That's right.

[Jade Warshaw]

The house and the cars and all those things.

[Rachel Cruz]

Yeah. The two things I would say, Louis, from, like, beyond just the nuts and bolts of the math side of what got you guys there, which I think you know. But two things we run into a lot, and I. And I commend you. First of all, I applaud you for even asking the deeper questions, because a lot of people will just kind of get through it and not really think through what got me here in the first place and what's going on within me. Because we're the ones handling the money. It's the people. Right. It's not the math and all of that. Like, we're the ones making the decisions. And so understanding ourselves is really important. And so I would say isolations is negative. No more isolation. It's kind of what Jade just said. And I think you isolated yourself from your wife and from the reality of what was going on, and you were just trying to do it yourself, which, again, I commend you for doing it. There's a lot of wives listening right now. They're like, I wish my husband would step up. But it was too. It was too extreme that way. You know, like, you can't be isolated in it. And for your sake, Louis, but also for the relational, there's so much to be said when a husband and wife work together as a team with their money, that does far and far and above, more than just the finances. So there's just something really big relationally that you. You miss, and you do it to protect her. I hear you, but it almost can end up not even just hurting, but it can. It can continue to put a wedge a little bit because you feel like you have to hold a certain level of truth with her to protect her. But yet. She's a grown woman, Louis. She's a grownup.

[Jade Warshaw]

That's a good point.

[Rachel Cruz]

She has to be able to handle the reality of her situation, too. And you may feel the brunt of it because she gave you a lot of the responsibility, but. But she doesn't need to do that either. She needs to say, louis, I'm so sorry that I put all of this on you. I have a functioning brain. I'm an adult, and I can handle it. I'm have my strengths and weaknesses just like you do. But together as a team, we're going to sit down together as a married couple and lock arms and be a team. And then the second thing I would say, Louis, I'm going very stereotypical here, so forgive me if I'm totally off base, but I'm going to put the dudes more in this category that I'm about to talk about. And then I even see West Palm Beach. I see, you know, I see Florida, and I see.

[Jade Warshaw]

I know where you're going.

[Rachel Cruz]

Yeah. And the E hates going backwards.

[Jade Warshaw]

Oh, man. Yes.

[Rachel Cruz]

And so when you feel like, I have to sell a car, a nice car in that lifestyle.

[Sponsor/Announcer]

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[Rachel Cruz]

And then downgrade a house, the ego is shot to the extreme. And again, stereotypically, I think guys feel this a little bit more. Like, I think there's something about saving face, like what you're saying. So those are the two things I would watch. Louis, next time, from an internal Perspective. Am I isolating myself and is my ego in charge or am I in charge?

[Jade Warshaw]

Yeah. Yeah. What do you think?

[Caller]

I think you guys are great. Well, thanks for sure. And I think there's something to ponder and kind of sit on there. On the side of the wife. I think it was one of those things when rock bottom head, I said, okay, cool, I think I can manage this and I don't need to put her through. But you're right, maybe it would have been better to go through it together. So there's a lot to chew on there.

[Jade Warshaw]

And there is something to be said for. I mean, selling a house is a huge deal. And if you felt like, hey, I'm gonna ride this out for X amount of months. Yes. And if I'm not here by, you know, if I get to that stopping point and it's not any better, then I gotta let go of the house. Right. But if you made it there, then it's great. You got to keep that. So I don't know what did you do that or.

[Caller]

So just to give slightly more context, again, I hate to take up too much time with other callers needing help as well. It was, you know, when I was younger, I moved 30 times. We were super unstable, you know, as family when I was younger. So I just said, hey, it was absolutely no ego. I just didn't want my family to ever have to feel uncomfortable.

[Jade Warshaw]

I hear that.

[Rachel Cruz]

Yeah, that's fair. That's totally fair.

[Caller]

And it wasn't about the car or whatever. Like, you know, yeah, I was dumb to buy a car, but, you know, for whatever reasons, it was just about having stability, especially for a young child, and not having her love this home and make friends and a school and everything and work her out and going out somewhere else. So that was.

[Jade Warshaw]

Listen, Louis, I think at the end of the day, you went through something and it was a learning experience for you. And. And that is part of most of our stories.

[Rachel Cruz]

You know, And I'll say this, Dave says this a lot for himself. Cause you sound very entrepreneurial. I mean, you're a very smart guy. I mean, he's growing businesses and doing all this stuff, but you can't out earn your stupidity. And dad says that a lot. And I think that could be another thing to think through because you kind of out earned it. You probably worked your tail off to get these businesses revenue to be able to cover up some of the mistakes.

[Jade Warshaw]

Yes, that's right.

[Rachel Cruz]

Which in one way is fantastic, because you know how to work and. Yes. And you can bring in revenue and all of it. But you can't out earn it. And so that's a little bit of the band aid over the situation is that you earn so much that you could get out of it, which again, one side of the coin, that's fantastic. But we gotta deal. We gotta deal with the root issues of how we got there in the first place from the nuts and bolts and then from just the perspective of who we are as people and like checking ourselves because. Because we can hold ourselves back a lot and make really stupid decisions. Yeah. Based on what feels good and what we want in the moment. And we all do it. We've all made those mistakes, but kind of tempering that side of it too.

[Jade Warshaw]

I agree. And I do think that when you've hit a certain layer in your income which it sounds like Lewis has, making those sacrifices, it does hit different. I'd almost rather someone call in who's, you know, not hit that point yet. It's almost easier for that person to go, okay, yeah, I'm just going to take to the streets and work with Card and sell my stuff than the person who's kind of been living that life then yeah, you're right. Your ego does take a hit and that is tough. But it's good for you. It's good, good medicine for the soul. Here's the deal, America.

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[Jade Warshaw]

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[Jade Warshaw]

All right, the all new everydollar is here and now it's way more than just our world class budgeting app guys. And here there's a ton of advanced features and it really is going to help you make faster progress with your money. The average person right now is finding thousands of dollars of margin in just the first 15 minutes. And you might be like, Jade, what are you talking about? When you first log in, it's going to ask you 15 minutes worth of questions about yourself and your money. So that it can really tailor a plan that is for you, personalized to you. And it's going to find those margin that's been falling through the proverbial couch cushions, as George Camel would say. It's going to help you find that money. So you can see start every dollar for free today. Get it in the App store or on Google Play right now. All right. Sebastian's in Richmond, Virginia. Hey Sebastian.

[Caller]

Hey. How you doing today?

[Jade Warshaw]

Doing good. How can we help?

[Caller]

Well, I just had a couple questions so a little bit about my situation. I'm actually a recent college graduate. I graduated technically in August and I've just landed my first big boy job as I would call it. So I'm going to be making 70 grand.

[Jade Warshaw]

Cool.

[Rachel Cruz]

Congratulations.

[Caller]

Thank you. What are you doing very soon here? I am a associate research consultant for a real estate company.

[Rachel Cruz]

Oh, good for you. Great.

[Caller]

Yeah. So just a couple questions and so my plan going forward is they have a 401k with no match. And so I'm actually planning not to contribute to that.

[Jade Warshaw]

Okay. Okay.

[Caller]

So my idea is I have a Roth IRA currently up about 4k and in it. And I'm thinking about doing about like a 580 bucks a month into that so I can max it out. Right. And then I want to save the rest because I want to start right now, I have about 20k in savings and completely debt free by the way as well.

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[Caller]

And I want to get into house hacking maybe mid, maybe like June, July next year if I can.

[Jade Warshaw]

Okay, so let's talk about the investing part first. First I would rather you invest based off of a percentage than based off of a limit or a certain amount that you want to spend. Okay. So walking the baby steps. I don't know if you're familiar with it, but after you're out of debt, which you are, and after you've saved up three to six months of expenses, maybe you save up three or four months. Whatever you decide. Have you done that yet? Just asking.

[Caller]

Yeah. So I have, I have like 15k in a Roth IRA, like 2k in a savings account and then like 4k in a Roth IRA.

[Jade Warshaw]

So the, the three to six months of expenses is non invested, it's non retirement, it's real. It's literally a rainy day fund. Sebastian, for if something were happen, if you lost your job, if you had an emergency, this is liquid money that you can get to. So I would suggest that needs to be your first order of business because here's what happens if you don't have It. If something happens and you need to get your hands on, I don't know, $5,000, you would have to unplug your investments to get to it, and you're working way too hard to be doing that.

[Rachel Cruz]

And you'll get penalized, too, for bringing it out early.

[Jade Warshaw]

Exactly. So you need separate money. Let's start on that first and just stack that up. You can do that fast. With 70,000, it's just you. Then after that, Sebastian, 15% is the number we're looking for. Now, I. I'm with you on maxing the Roth first, because for you, that's, that's the better advantage since your 401k doesn't have a match. But depending on what you have after you hit that, that ma. After you max out that Roth, if you still have money left to invest. Yeah. Then go ahead and throw it into the 401k, that's fine. But do it based off of percentage of your gross income, not just.

[Caller]

Okay.

[Jade Warshaw]

You know.

[Rachel Cruz]

Yeah, I mean, it's going to be.

[Caller]

Was just because I think it's what, like 7k a year is the max for me at this point. So.

[Rachel Cruz]

Yeah, seven to eight in the Roth. And then for you, 15%. Yeah. Will be around 10,000.

[Jade Warshaw]

Yeah. You have more to go.

[Rachel Cruz]

You should be able to max it out with a couple of thousand left. And Jay's just saying put that 2 to 3,000 just in the 401k. Even if you're not getting the match, it's still a great retirement vehicle just to put that 15%. And then if you want to do investing beyond that, then we can talk about the house hunting or house hacking thing. But yeah, the maxing out the Roth and then putting a couple of thousand more into the 401k every year is just a great starting baseline for you.

[Jade Warshaw]

I like that you're thinking like that.

[Caller]

Yeah. That's amazing. So what I'm thinking is, because I'm currently living at home, so my idea was, you know, purchase that first property, you know, as I'm moving out. Right. It's like when I have obviously the baby steps done, and then I'm obviously investing and saving. Right. The idea is to just kind of move out into that first house hack opportunity, which I'd hope to acquire sometime, which is.

[Rachel Cruz]

What, what do you. When you're saying house hacking? What.

[Jade Warshaw]

What.

[Rachel Cruz]

What do you mean specifically?

[Jade Warshaw]

Like, you're living in one side, the other person's living in the other.

[Caller]

Yeah, I was probably gonna do probably single family rent by room strategy, so. Yeah. So probably just purchasing a single family and then having a couple different attendants living in there with me.

[Jade Warshaw]

Here's the thing, though. I'm gonna give you two words of caution. Number one is, let's say you do this. You've gotta be able to cover it without them. So, for instance, let's say you buy the house and the mortgage is a couple thousand, you know, 2500amonth. You've got to be able to cover that on your own to know that, hey, if for some reason these tenants.

[Rachel Cruz]

Don'T pay, or I can't get tenants.

[Jade Warshaw]

Yeah. Or I can't get tenants, it's not going to jack me because I can cover the mortgage. Does that make sense?

[Caller]

Yeah, I 100% agree. And that's what I was kind of hoping to call about, like, I know, kind of, you know, there's a little bit of caution with, you know, the Ramsey Steps and whatnot around, you know.

[Jade Warshaw]

Yeah.

[Caller]

Like leveraging yourself in real estate. But I'm kind of trying to figure out. Out, like, to me, there's no real difference between buying a single family home as a primary residence just for myself, and then doing it as a house hack as well. Well, as long as at my baseline, I can cover that more.

[Rachel Cruz]

Yeah, that's great. We're fine with that.

[Jade Warshaw]

There's more to it, though. And that was going to be my second word of wise. Yeah. If you. On the financial side, if you're doing what we said. Sure. But just remember, this is your first entrance into home ownership, and you're doing it with two or three other people strapped to your back back. So for the layman, like, for the lay person, the. The first time they buy a house is already stressful because they're realizing for the first time, it's all on me.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

And so you're not only doing that for yourself, but now all these tenants are going to be counting on you if something happens with the ac, if something happens with the roof, if they get a leak in their bedroom. Right. So there's part of me, Sebastian, I think I'm not mad at this idea, but there's part of me that wouldn't mind you if you did get the house. You hang out there for a minute before and just like, get your bearings about you before you're just up and having all these people.

[Rachel Cruz]

Yeah. Cause I think it's just. Okay.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

You gotta paint reality, which is always hard to do if it's not been a reality. But what Jade's saying is, because my line of thought Honestly, Sebastian is. That's great. You're a single guy if that's what you want to do, and you can cover it even if they don't pay. And you're like, listen, I can make. Make so much money off of doing this, and I'm going to save here and do whatever. Whatever. That's your prerogative, if that's what you want to do. But I'm telling you, Sebastian, when you start making. You start going to work all day, you're making your income, you're coming home, you know, you're dating someone, you're doing this and that, you're going to get tired, I think tired of the roommate situation. If it's just to get extra money. Now, if you're going for a goal to be like, hey, I really want to make an extra 20 grand this year. This is. This is a way I can do it. And I'm. And maybe there's like an endpoint in your mind, I don't know, but just the endless idea of it overall, I just think you're gonna look up in probably maybe a year, maybe less, maybe a little more, and be like, I'm a grown man. I'm a grown man and I work and I pay my taxes, and I want to come home to a house that I get to do what I want.

[Jade Warshaw]

It's clean, the kitchen is clean.

[Rachel Cruz]

I don't have to deal with roommates. Do you know what I'm saying? So, like, just always remember that. But I think that's the line that feel safe with you doing it is that you've already said I can cover the mortgage without anybody. I'm going to just do it to make some extra money, maybe to hit a. You know, maybe it's a goal or whatnot. So. So we're not against it. We just know. I don't know, just think.

[Jade Warshaw]

We just want to encourage you to think about it from every angle. That.

[Caller]

Yeah, And I definitely agree because I think I have. Because the endpoint for me is, you know, maybe house hack, you know, over the course of five years or so, four or five years, maybe do it, you know, two or three times, acquire multiple properties that way, and then at that point, I'll able. I'll be able to get, you know, my own primary residence where. Whether it's. Whether I just want to rent somewhere like a condo or do whatever, but I haven't thought that far ahead. But the idea is, of course, I don't want to live with random people forever, but.

[Jade Warshaw]

Right.

[Caller]

But even as you expand wealth building tool. In this aspect it seems kind of like, I mean there's, there's, there's two alternatives. It's either do this or go out and just afford the mortgage on my own or go and rent and just throw money at the wall.

[Rachel Cruz]

Wall.

[Caller]

The thing is, so it kind of seems like the optimal idea to me.

[Jade Warshaw]

The thing is you've got, if you do this, I like it for the one house thing. But if you're thinking about expanding this and going above and beyond, you do know you got to do that in cash, right?

[Caller]

Yeah. So that's just, that's the thing where I'm thinking of. Because you have some people who will say like, you know, just over leverage yourself like crazy.

[Jade Warshaw]

Right.

[Caller]

Have Ramsey side which is.

[Jade Warshaw]

Yeah.

[Caller]

You know, pay cash.

[Jade Warshaw]

Yeah. So then you already know you gotta pay cash.

[Rachel Cruz]

Don't put on the wrist, Sebastian. You're young. You are, you are, you know, going to the wall with all these ideas and it's great. But slow and steady wins the race over time. People that keep wealth, they do it slow and steady. It's not a get rich quick thing.

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[Jade Warshaw]

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[Jade Warshaw]

Welcome back to the Ramsey Show. We're here in the Fair Winds Credit Union studio continuing to take your call. So call in the numbers, triple 882-55-5225 and we will do our best to get you on the show. I'm next to Rachel Cruz today. I'm Jade Warshaw. Let's get into it. We've got Kim in Memphis, Tennessee, right down the road. What's up, Kim?

[Caller]

Hi. So glad to be talking to y'. All. My husband and I, we have combined finances and Christmas is Coming up. And I want to know how to give and receive gifts from your spouse when you have combined finances.

[Jade Warshaw]

I love this question. It's such a. It's such a marker of someone who's really trying to do this the Ramsey way. This question. I'll tell you what I've done. And I know probably Rachel has her own take on it. I am a lover of gift cards. This time of year. I'll go to, like, Costco or wherever I can get, like, the dollar of, like, Visa gift card that I can then take that money and spend it on whatever I'm trying to get for Sam. And then he doesn't see it. He might. Of course, he'll see the gift card purchase. So he might get an inkling for what it is based on the amount of the gift card, but he won't know what it is because he won't be able to see that transaction roll in through every dollar. What is that? What do you do, Rachel?

[Rachel Cruz]

Yes. A couple of things. One, honestly. Well, Kim, we're terrible gift givers to each other, so I'll say that first and foremost, we're not great at it. But the times in the past that we have two things. Either it's an obvious holiday, like an anniversary, or a birthday or Christmas. And so Winston will be like, hey, I'm gonna buy your gift. Just don't look at the bank account. And he'll delete it off of the EveryDollar app. You know what I mean? Like, make a mark. Like, I'll just put it back on. Just don't look at it online and we're fine. And I'm like, that's great. Like, I know it's coming. So, like, that's.

[Jade Warshaw]

You're not snooping around.

[Rachel Cruz]

Yeah, I know. And I don't care. I don't know. I have. I have three kids to do it. I'm like, I don't care. That's fine.

[Jade Warshaw]

Thank you. Nobody got time for that.

[Rachel Cruz]

So that or he did buy me a very nice ring for our anniversary two years ago. He got me a band and. Wow. You gotta have some friends in high places.

[Jade Warshaw]

For sure. You can't do that on a gift card.

[Rachel Cruz]

Yeah, but he had a friend that bought it, and then Winston paid him back after.

[Jade Warshaw]

I love that.

[Rachel Cruz]

But you gotta have a friend to be able to do it. And I did concert tickets one time, and my mom bought em, and I just told her, I'll write you a check after. Cause Sharon does not Venmo, which makes me laugh. So I still like, will write her a check if something happens, so. Yeah, we'll get around that way. But you gotta have, like, a good, like, you know, he's got to have, like, a trustworthy source to do that. So I don't know. I don't know if that helps, but there's ways around it. And I'll tell you this, too, Kim, for people listening, we will hear this randomly as an excuse not to bring in. To combine finances. They're like, well, we give gifts, and we can't because we give gifts and all this. And I'm like, y', all, it's like, three times a year, and you're a really great spouse if you're getting, like, anniversary, birthday, and Christmas. Like, I don't know. Are y' all gift gifts givers?

[Jade Warshaw]

Sam Warshaw has made me a gift giver. Okay.

[Rachel Cruz]

See, y' all are growing.

[Jade Warshaw]

His family is gifty, and they are. Yeah, he's gifty. And Sam and it's has an expectation. He's got an expectation.

[Rachel Cruz]

He's like, I want a good gift.

[Jade Warshaw]

Shape, and this man has expensive taste. I'm like, man, I gotta. I gotta raise my game. What am I gonna do?

[Rachel Cruz]

What am I gonna do? Oh, my gosh. Yeah.

[Jade Warshaw]

But we'll.

[Rachel Cruz]

We'll pull the parent or the friend card sometimes to. To cover something.

[Jade Warshaw]

Yeah, I like it. Yeah. That's such a good question. That. That is the true mark of somebody who's trying to do this all. Thanks for the call. We've got Kenny in Jackson, Mississippi. Hey, Kenny.

[Caller]

Hello. How y' all doing?

[Jade Warshaw]

Good. How can we help?

[Caller]

Awesome. I have a. Yeah, I have a question about life insurance. So me and my wife have four children under six, and we do have life insurance. For them, it's a lot more than what y' all Recommend. We have 150,000 on each of them. And some people have told me that they're really like, you don't need to be spending that much. And some people are like, well, that's totally fine. My thought process on having the 150,000 on each child was it' to be probably the most thing if I obviously, like, a child passes and having to be able to take significant time off work, and then if we do have any debts at that time, you got to pay that off. I know you guys recommend 20,000 and no more than that. And I know that because I called Xander Insurance and that they won't even sell anything over 20,000.

[Jade Warshaw]

Kenny, I got. I got. I got break in. I think you are. I think you either got a hold of some wrong information or I think you may be a little confused about how we teach insurance. Can I.

[Caller]

Sure.

[Jade Warshaw]

Can I explain it? First off, I do want to say I love that you're thinking about that and you're thinking about how can I protect myself, my family? The thought process is right. The method for how you did it is a little off, but we can fix it. So the purpose of life insurance is to, to help the person who is dependent on your income. It's an income replacement. So let's say your family, for instance, you've got the four kids under six and you've also got the wife. They're all dependent on your income. So if something were to happen to you, Kenny, the insurance needs to be on you and your wife. So you're the breadwinner or maybe your wife is. But if something happens to you, your kids need to be able to have a source of income that they can say, okay, we can pay for for dad's funeral. You know, hopefully that never happens and we can afford to continue the lifestyle we've had because this, this nest egg is there. And same thing if your wife were to pass away, she's contributing something, whether it be in the form of taking care of the kids and being a household CEO that needs to re. Be replaced with money. Because if she were to go, yes, you would need childcare, you would need help around the house. So that's the purpose of the insurance. And we don't do it by lump sum. We do it 10 to 12 times your income income. So whatever you're making, Kenny, we would say 10 to 12 times that amount. And if your wife is a stay at home mom, maybe four, you know, four times your income, something around that, that number. And we want term life policies on the two of you, so not on the kids.

[Caller]

We have, we have, we have life insurance ourselves. And that's, that's great. And I understand about the replacement of the income.

[Jade Warshaw]

Okay.

[Caller]

I guess just my thought is like, I'm not going to want to have to work for. I would, I mean, I've never had a child pass and God forbid that ever happens. But like, I know you all have kids, like you wouldn' work for a substantial amount of time while you're grieving that. So my thought process is just like have, you know, a decent little, you know, lump sum of money for the kids in case, you know, one of them passes. So we actually have like Dr. John says to grieve and just miss them and figure that out.

[Jade Warshaw]

Where Are you in the baby steps?

[Caller]

Yeah. So we're on. We're on baby step two, I think. Baby step two. So you have our emergency fund, and we're going to pay off debt right now. So my goal is once we pay off all of our debt, then, you know, scale back on the life insurance. You know, we don't have a huge emergency fund right now besides our thousand dollars. But, you know, once we get that taken care of, then we can kind of back off on the life insurance. So what do you think about that? Do you think that would be good or.

[Jade Warshaw]

No, I don't think.

[Rachel Cruz]

Yeah, I don't think it's necessary, Kenny. I mean, I do think it's one of these things. As an adult, you get to get off this call and do what you feel comfortable doing. And if that's what you want, that's fine. My word of caution is because, I mean, they have to probably be cheap policies. How much are you paying per kid? Like, per year? How much is going to this?

[Caller]

Well, per month, it's about 40 bucks a kid.

[Rachel Cruz]

Okay. Because to me, that's. I mean, you know, 100.

[Jade Warshaw]

I mean, 160 bucks a month.

[Rachel Cruz]

Yeah. So I'm like, if that. We don't recommend this. This is not the way we would go about it. We would never tell someone to do this. But if this is where you choose to spend some of your money because it makes you feel better. Better. And you want to, that's fine. But also, word of caution. There's so many, which I don't think you're in because you're working with Xander, but there's so many bad philosophies around kids and life insurance of things of, like, oh, you get them wealthy here. You're doing it for a financial strategy. Not really. From what you're saying is if they actually did pass away, you would need that money to, you know, not work. But just be careful that you don't go down this rabbit hole of life insurance, because there is a. Like, there's. There's. It's. I'd say it's more crappy things out there about life insurance than the good.

[Jade Warshaw]

Sure, sure.

[Rachel Cruz]

The good is very slim, and the good is good. Like, the good is good. But there's weird stuff with life insurance policies that are really expensive for kids and all of it, and we just don't play that game. So I don't think it's necessary. But if you want to spend, you know, 160 bucks a month, you can. But that's. You know, thousand or so dollars not going to the debt.

[Jade Warshaw]

Yeah, I agree.

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[Jade Warshaw]

Alrighty, we got Ashton in Austin, Texas. That's a bit of a tongue twister, but it didn't get me. Rachel. What's up, Ashton? Hey.

[Caller]

Hello. How you doing? So thank you for taking my call. So I want to ask you guys a question. Me and my wife are on baby step number two. And so we started with $130,000 in debt at the beginning of the year. And we got it down to 23,900 and some more down.

[Rachel Cruz]

Oh my gosh. Good job.

[Jade Warshaw]

Yeah.

[Caller]

And so we both, we've been blessed enough to work at a company that we get ESPP stocks and stuff like that. So we, that really helped us get this push. And we thought about $5,000. Anywhere from 45,000 dol. 500 to $5,000 a month at our debt every month. So what I'm trying to, what I'm trying to figure out is this though. I'm like, okay, we have. So with the ESPP stocks, we have about. We're going to owe about 14,000 in taxes, right? So I'm like, okay, should we take that money, throw it at the car? And I'll be, I'll have the car. If I do that, I'll have the car done. Because that's what the last that is. I'll have the vehicle done by like right Before Christ. Well, maybe even Thanksgiving time. Okay, I'll have the car done and then we can, I can, we can go back, you know, start Pilots, Stock Pollen, cash, and then be ready for when 8. Before April 15th comes.

[Jade Warshaw]

14,000.

[Caller]

You get what I'm saying? Or should I leave it? Or should I. Should I. Should I just. You know, because either way it's gonna get done because, like now, like, I have the tax money, but which direction should I go?

[Jade Warshaw]

Have you run out the number? You're positive that with just your income along loan, you'll be able to cash flow the tax bill when it comes?

[Caller]

Yeah, because we, we, once again, we're blessed enough to be able to live off of one one income. So basically we mean we, we live off. And we live off my wife's check. And my check is about anywhere from overtime 20, 2045 to 4500 to 5000amonth. So I'm like, you know, I'll be ready. You know what I mean?

[Rachel Cruz]

Like, I, I mean, the taxes are coming from. I'm sorry, I missed the.

[Jade Warshaw]

They're cashing out stocks.

[Rachel Cruz]

Okay. And they're single. Single stocks?

[Caller]

Yeah, the single stocks. Yeah, yeah, yeah, yeah, yeah.

[Jade Warshaw]

I mean, we tell anybody to do that?

[Rachel Cruz]

I was gonna say I would go ahead and do it anyways, Ashton, because I wouldn't have single stocks anyways. So I would probably tell you to do that and move some stuff to mutual funds or index funds anyways, let alone pay off the debt. So I think it's a good move.

[Jade Warshaw]

In general.

[Rachel Cruz]

It does hurt with the tax bill, like what you're saying. It's all. It's like. But in the long run.

[Caller]

Yeah. I'm scared. I'm scared, Uncle Sam.

[Rachel Cruz]

I know. I think we all kind of have a little bit of.

[Jade Warshaw]

Well, if you want to play it out with your account accountant first and like, just be double sure that you know what the number is going to be. I think regardless of. I mean, if you're in the ballpark, I think you'll be fine with your income and cash flowing that. But if you want just that extra knowledge of. Just tell me, you know, get, get as close as possible to it. I would do that. The other question I had for you is I thought you said you had 22, 000 left to go, but you.

[Caller]

Said like 20, 23 is like 23, $23,981.

[Jade Warshaw]

So you've got other money that you're putting with that to finish the car? Is that what.

[Caller]

Yeah, so I'm so Every check like last, I just paid 2,000. I'm paying 2,000 every two week. If I get a little more. So like I say, it's about anywhere from 4,000 to 5,000amonth.

[Jade Warshaw]

Got it.

[Caller]

Is my a wider ballpark of what I'm putting on on the day?

[Rachel Cruz]

Gotcha.

[Caller]

Regardless, I've been doing that since the beginning of the year.

[Rachel Cruz]

Good. Yeah. Well, I'm with Jade. If you're able to double check that you can tax flow, or I'm sorry, cash flow, the tax bill in April. I'd go ahead and cash it out. Yep. Be done. And then build up some savings to invest in like a good index fund or. But for some reason if you can't. Ashton, I don't know if they. I don't know. If you guys run the numbers for some reason, then you're going to get this car paid off in five months anyways. So you could pay it off, save some cash on the side after that and then sell the stock and pay it, you know what I mean? Either way, I would be doing both. It's just the order you want to make sure that you're good at. But if you are 100% sure you will have that money saved for the tax bill, I would go ahead and. Yep, cash it out and get this car, get it paid off. Because when you don't have that car payment and Ashton, y' all did crazy. That's so good.

[Jade Warshaw]

That was fast.

[Rachel Cruz]

That was so amazing, those numbers you just gave us. So well done to you and your wife. I mean y' all are like textbook exactly what we talk about. And so. Yep, you guys got a bright future ahead.

[Jade Warshaw]

So good. Thank you for the call. That's so good. All right, now we've got Austin in Charlotte, North Carolina. What's up, Austin?

[Caller]

Hey, Jade.

Hey, Rachel. I'm 25 and I make about $60,000 a year. I'm about $35,000 in consumer debt and my payments are around 800 per month. The largest debt is what I'm most worried about. And that's a $22,000 truck at 400 per month. And I just got this truck about five months ago.

Yeah.

And the KBB values 18,000.

[Rachel Cruz]

Good night.

[Jade Warshaw]

You've already lost 4,000 thousand, man. Wow.

[Caller]

Yeah, I am not very good when it comes to.

No, you're fine at all.

[Rachel Cruz]

Well, you're learning. You're 25. You're learning. Yeah. Our friends kind of side note, Austin, our friend bought a new Tesla and he bought it with 4, 000 miles on it. So like it was literally a brand new one owner, all of it.

[Jade Warshaw]

Oh really?

[Rachel Cruz]

22. He got off of what he bought that 4,000 like with 4,000 miles versus what if he went retail brand new. So that just shows you guys, guys how quickly cars drop. So you're not just the only one. Austin, we, we see it all the time and it's real how their value drops. So you know, the truck, we would always say if it is half of your annual income, you need to sell it. So you're not there.

[Caller]

You're.

[Rachel Cruz]

You're close, but you're not there with the 22,000 versus your income. But the question is, I mean, yeah, the depreciation of what you would have to pay in difference and get a, and get some money to replace the car kind of ends up being a wash. So I probably would just, just keep it and pay it down.

[Jade Warshaw]

Yeah. What, what are the other debts? What's the other 12,000?

[Caller]

So the. I have 10, just under 10,000 on a personal loan. And that was for another truck actually, that it has a lot of motor issues and that's why I went and bought this newer truck.

[Jade Warshaw]

So you spent 10k on a truck. Still didn't get fixed. And then you. So you spent $32,000 on cars very quickly.

[Rachel Cruz]

Where's that truck right now?

[Caller]

I still, I still have it. I have a welder actually coming this weekend to help fix the frame.

[Rachel Cruz]

Okay. How much can you sell it for.

[Caller]

Once it's all done right around 8, 500.

[Rachel Cruz]

Okay, well, that'll help bring down your, your $22,000 car payment.

[Jade Warshaw]

And what's the other, what's the other $2,000 debt? $3,000 debt.

[Caller]

The. That is what's remaining for my fiance's lawyer. She is, is in the process of going through a large custody dispute with her baby's father, her son's father.

[Jade Warshaw]

Okay.

[Caller]

And she was having some trouble trying to come up with that. And I, it was something very big for, for her and very important to myself. So I told her that I would go ahead and take care of it and we will handle that, handle everything at the end. And what I mean by that, we haven't set a date. We're not. So I will sort of listen to you guys about nine months ago. And, and that is something that has been heavy on my mind and it's something that I definitely want to get the ball rolling towards. We both. She. I'm ready to go to the courthouse and just get this over with because I also Just bought a house about six months ago.

[Jade Warshaw]

Oh, my goodness. Hey, hold up, hold up. I'm gonna stop you for a minute.

[Rachel Cruz]

You've been listening for nine months.

[Jade Warshaw]

You've been listening for nine months. Months. Thank you, Rachel, because I was. I think. Here's what I want you to. I don't want you to keep going towards debt. I want you to start practicing patience. Because I see a guy who's like, I need to do this, I'm going to do this. I'm going to do this, I'm going to do this. And I just think that it's going to start to compound on you. I'm glad that you called now before it's gotten too crazy, but I got. I think, Austin, you got to just slow down a little bit. I do. The truck is too much. The. The loan for the other thing is too. Like, if it's not on fire, we should certainly don't need to be going into debt for it.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

So just take a little bit of a chill pill. I agree with you. If you're going to start paying for things for your fiance, you probably need to get married. Or you guys need to decide what that line is because I think this could get messy really fast. And it doesn't. It sounds like she's got a lot of loose ends to tie up and it might not be time for her to jump so quickly in.

[Rachel Cruz]

But also, you can't be saving a ship while yours is sinking.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And so you got a lot on your plate, Austin. So I would, I would focus first and foremost on paying off this debt, smallest to largest. And so you're going to do, you know, the, the fiance's debt, personal loan for the truck and then the car payment. Get that taken care of, get a good emergency fund and start cash flowing your life altogether. Hey, guys. It's open enrollment time for health insurance. And if you have ever felt overwhelmed trying to figure out your health care costs, you are not alone. For a lot of families, health care is one of the biggest line items in the budget. And it gets more confusing every year. But you don't have to settle. Christian Healthcare Ministries is a biblical and budget friendly alternative to health insurance. And I am proud to recommend them. With chm, you are joining a community of believers who actually help share each other's medical bills. Yeah, it's true. Members have shared over $12 billion in healthcare costs since CHM started nearly 45 years ago. And it's simple. You choose your provider with no network limits. You submit your eligible bills online and other members help share your expenses. CHM has program options for every stage of life, whether you're single, self employed, or raising a family, y'.

[Jade Warshaw]

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[Rachel Cruz]

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[Jade Warshaw]

Check them out.

[Rachel Cruz]

That's chministries.orgbudget.

[Jade Warshaw]

All right, guys, thanks for listening to the Ramsey show, and if you are an avid listener and even if you're not, make sure you're sharing the show, because I believe that the content that we're showing sharing is so very helpful. I mean, after all, it did help Sam and I pay off $460,000 of debt. And I truly hope and know that it's helpful for you guys, too. And it's something that you can do to just spread the word of the Ramsey way. That kind of sounds creepy, but it's not. It's just a way to spread the information so other people can have help with their life and their money. So just, you know, hit the little paper airplane if you're on Instagram or, you know, copy the link on YouTube and share it with some friends. We also have a really cool page playlist that is easy to share. So just make sure you're, like, subscribing and sharing. That really helps us out. And it's something that you can do that's free. That doesn't take any time at all. All right, let's get back to the phone lines. Ryan in San Antonio, Texas. What's up, Ryan? How can we help today?

[Caller]

Hi, yes, good afternoon, everyone. How are we doing? Everyone good?

[Jade Warshaw]

Oh, yeah, doing great.

[Caller]

Yeah. Awesome. Glad to hear. So really, what I wanted to call and ask for is how I can just tackle my debt at a fast and efficient rate. Want to be debt free.

[Jade Warshaw]

I love that you want to be debt free. How much debt are we looking at?

[Caller]

So my wife and I just got married August 2nd, so our combined debt is 40,000.

[Rachel Cruz]

Okay, perfect. What did you say right before that, Ryan? You said something about wanting to be debt free. Did you say musician? What'd you say?

[Jade Warshaw]

They just got married.

[Caller]

No. Yeah, we just got married in August 2nd. Yeah. We just want to be debt free.

[Rachel Cruz]

Yes. Okay. Before that, when? Okay, I'm sorry. I thought I heard something else. Okay, that's great. Yeah. So how much do you guys make a year together? Household income?

[Caller]

Combined? Yeah, combined before taxes, we're looking at $100,000.

[Rachel Cruz]

Okay, good.

[Jade Warshaw]

And what kind of debt is it? Is it from the wedding or no.

[Caller]

The wedding, we paid out of pocket. Nothing that we owe for that. It's student loans and a car loan, along with credit card debt.

[Jade Warshaw]

How much is the car? How much of the 48 is car I?

[Caller]

$26,000.

[Jade Warshaw]

Okay. What's the student loan?

[Caller]

Student loan together. 16,000.

[Jade Warshaw]

Okay. In the credit card, correct?

[Caller]

Yes.

[Jade Warshaw]

Okay, got it. Okay. So is this. Did this come mostly from one side or is this just really both of you together? This is both your debt.

[Caller]

The loans under my name. My wife didn't come in. She has no car payments. And the student loans, I have a little bit more as well. And then the credit cards together for sure.

[Jade Warshaw]

Okay. Okay.

[Rachel Cruz]

So all yours, Ryan. Bringing all this to your debt free wife. No, I'm just kidding.

[Jade Warshaw]

That is funny. That's wild. So, yeah, I mean, I think that you have the right spirit. This is something that is great to tackle head on as you guys are combining your finances. So, yeah, that's the first thing is combining everything together. I don't know if you've done this or not, but you guys together need a joint checking account that both. All your money is going into so that there's complete transparency there. Do you guys have that?

[Caller]

No. So we're very new to this whole. To the real world.

[Rachel Cruz]

Yes. How old are you guys?

[Caller]

I'm 26. She's 25.

[Rachel Cruz]

Okay.

[Caller]

And that's why I wanted to call. Yeah, yeah. For any and all invites.

[Rachel Cruz]

Perfect. Yes. Well, Jade's right. So combining everything that can be combined. So that's going to be any savings in a high yield or a money market. If you guys have any of those accounts, put both names on it. Checking account. Yeah. The most, like, efficient way of combining is that joint checking account. And people get all squirmish about that because they want their own money and all of this. But we've just found financially, not only do you get ahead faster when you work together as a team, when you say yes, all this money's coming to our household as a household, as a family. What do we do with this pile of money? Regardless of who brings in what, this is our money to run our household. How do we most efficiently do that? And then just from a dollars and cents standpoint, just working out of the same account. Because, Ryan, I mean, it still kind of amazes me, which I know I'm the weird one probably in the world today, but that people Venmo or split grocery bills as a married couple, and you're just like, oh, my gosh, y', all, like, you. You're both adult. Like, let's just, let's just call it what it is. We're a married couple and we're sharing our life together. So they have the joint, the account. We're would be all of that. So that's kind of the tactical side. And then go ahead.

[Jade Warshaw]

Well, I was going to say, does your. I know you're calling, but your wife is on board with this. She, she knows that we're doing this. We're paying it off of aggressively. Does she know this or is this just you talking?

[Caller]

So I'm the more financially savvy one. I'm the one who's trying to find strategies. She's all on board, though. She's on.

[Rachel Cruz]

Well, say that the most financially savvy, Ryan, but you are the one brother bringing in all the debt.

[Caller]

I know.

[Jade Warshaw]

Yeah. What's it mean?

[Rachel Cruz]

So, yeah. And then I would sit down for you guys and do a budget we'll give you as a wedding gift from Jade and I, we'll give you every dollar, which is our budgeting app. But it also, you plug in all your numbers so you see your numbers as a household, which will help you start working your way out of debt, giving you a plan and giving you some guidance that way. And I also throw in my book know yourself, know your money because understanding how you guys fun function separately, how you grew up, your money personalities, you know, you, you, I, I've made fun of you. I mean, you said you're this happy one, but you're probably the nerd. You probably enjoy this stuff. She's probably a little bit more laid back, which is great. Like, all of that's so normal. But working together and seeing each other's strengths is really big. And you'll probably get those conversations doing a budget. So when you guys do your first monthly household budget together, that's a, that's a great. I mean, some people have a lot of bad memories around that. You know, I think it's a, I.

[Jade Warshaw]

Have an okay one.

[Rachel Cruz]

I think it's a, a great starting point to be like, hey, here's what I think we spend on groceries. What do you think we spend on grocery. You know, you really start to get a handle on where your income's going. And in that budget, Ryan, is where you guys are going to be listing out your debts as well. And you guys will start working on tackling the smallest debt. So it's probably one of the credit cards paying that off. And then you just, you pay minimum payments on everything. But you start attacking the Smallest one first. And if you guys together, Ryan can get fully on board. And if you guys go crazy with this. And when I say crazy and Jade. Jade, live this out. And so you probably speak to it. But, I mean, it's not. Yeah.

[Jade Warshaw]

Not.

[Rachel Cruz]

Not only cutting expenses, but you both getting extra jobs, working nights, working weekends. Like, you just go all in. You could get this 48 paid off, I think, in 18.

[Jade Warshaw]

18 months, for sure. I think with you guys being newlyweds, you're going to have to basically live like your college students. Like, don't mistake getting married for now. We're, you know about that life. Now is the time for you to be like. Like, okay, we're eating peanut butter and jelly because we're newlyweds, and everything is fun. Right? Like, make everything fun because you're newlyweds. And also, I would say, Ryan, don't mistake. And this is for anybody listening, because sometimes a wife or a spouse or a husband can say, yeah, sure, do whatever you want. Right. Don't mistake that for being on board. Make sure she's on, like, wants to be a part of it. Because I think sometimes if you're the nerd, it can be. Be that can be interpreted as, oh, she says, I can go do this.

[Rachel Cruz]

Yeah. And you may be excited about it. And Ryan's like, oh, I'll do it. I'll do the budget. Don't worry.

[Jade Warshaw]

You got to do it together. So you. You. You. You got to make sure that this is not just, hey, she said it's fine. So you go off to the spreadsheet and, you know, just dive in there on your own. Make sure that you're both, to Rachel's point, contributing. She has, you know, she has a say in the budget. You might be the one who makes it, but she's the one who's commenting on it. And you guys are both tracking transactions. Everything's transparent. I think that's the part of this that's super duper important going down the line.

[Rachel Cruz]

Yep. For sure. Ryan, can you already tell if you guys are opposites with money? Meaning, like, are you more of the spender or she's more of the saver or vice versa?

[Caller]

I think we're both pretty conservative. It was just actually writing down the desk. We were just like, holy smokes. Okay, we need some. We need some advice on how to do it. But I think we're both a little bit on the conservative end.

We don't splurge as much.

[Rachel Cruz]

No, that's great. Yeah. And I'll say this Ryan, you know, the faster you guys can get out of this debt, the brighter your future is. Because we would tell you, like, stop investing. Stop everything until you get this debt paid off. And then you guys build up an emergency fund after that. If you guys want to buy a home or I'm not sure if a home is in the equation, you know, that would be after that. But it is amazing when you look up and run some numbers. If you go to ramseysolutions.com and our investment calendar calculator. If you start investing at 30, oh, man, oh, man. And you start looking ahead of like, what your income's going to be and the compound interest and where you guys could go financially, like, it's insane. And just put in your car payment from age 25 to age 65 and see if you live to the car payment your whole life. Instead of investing, you paid a car company that payment. What you're missing out on. So together, just like start building this dream of, like, this is what we want to be. We want to be about this and we want to be out of debt. We want to be investing. You know, that's the fun part of all of it. When you're working together, which I think couples miss out on when they keep it so separate, it's like you don't get to dream together and be like, here's what we get to do as a couple and as a family. So there's a lot of upside, Ryan. So I. So I appreciate you calling and trusting us with, with this because I think you guys are, you're on the right track and you guys are, you're going to do incredible things. So congratulations on the marriage.

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[Jade Warshaw]

So, you guys, we're always giving you advice on, obviously, how to manage your money and the components that go along with that. So, of course, we're always telling you things like, you need to get on a budget. A budget is a huge part of managing your personal finance. You need to be paying off debt. That's a huge part of personal finance. You need to carry the proper insurance. A very big part of personal finance. Obviously, we care about saving for the future. We care about things like generosity. But another big part of managing your personal finances is what would happen if you were to leave this earth, what happens to your personal finances, your assets, all of those things. And so, of course, that falls under wills and estate planning. And it's kind of one of those topics, Rachel, that's a little bit like, I don't know if it makes you feel some type of way to talk about it, but we really do need to talk about it. So we get questions all the time about wills. Can I. Can I just make my own will? Can I do it online? Do I need to get with a lawyer? How do I do this? So let's kind of pop through this, Rachel.

[Rachel Cruz]

Yep.

[Jade Warshaw]

And answer the number one questions, Actually, the top four questions that people tend to ask us. So the first one, how do I know, Rachel, if I need a trust or if my estate's too complicated for doing the online thing?

[Rachel Cruz]

Oh, yeah. Well, we always say if your estate is worth less than a million dollars, then an online will is just sufficient. That's fine. Anything past a million probably can get complicated with passing down assets and taxes and all of that. So at that point, you may want to look into more of estate planning, which may include a trust.

[Jade Warshaw]

I love that. Okay, what about this one? What do I need to start my will online?

[Rachel Cruz]

Well, making a will online or not, some big decisions you got to think through. So think through. Who do I want to give all my stuff to? You know, where does my stuff go? If you have minor children, children that are minors, who's going to be taking care of them? And also, who do you want to make decisions for you if you are incapacitated, if you're not if you're not available, or, yes. Conscious enough to write to make these decisions about your finances. And then there's even power of attorneys or health decisions. All of it is there in the will.

[Jade Warshaw]

So important. And it may seem a little morbid, but you do. I mean, this is part of the planning, part of the risk there. Number three, is an online will legally valid?

[Rachel Cruz]

Yes, it is, but just not any online will that you find on the Internet may not be legally valid in your state. So again, it has to be a state specific will. That's one reason we recommend Mama Bear legal forms, because they do a great job with that.

[Jade Warshaw]

Yeah. When Sam and I moved from Florida to Tennessee, we had to change our work will because state. State law applies. Okay. And finally, number four, why would I want an online will versus a traditional one that's made with a lawyer? Why would I even bother with that?

[Rachel Cruz]

It's more convenient. You're able to kind of do it at your pace. You're able to get to it. I'd say it's less expensive as well. Takes less time. So again, it's. It's very doable. And again, our world today, the way we've made things accessible. So whether it's, you know, even brokerage accounts or index funds, you know, you can do through Vanguard, you know, your will, you can do online. And so there are times that you can just do these things yourselves. But when things get more complicated, whether it's investing.

[Jade Warshaw]

Right.

[Rachel Cruz]

Again, your estate, even, like we're talking about making a will, bring in professionals to help you with some of this stuff, especially if you have anything that's a little bit complicated because it's worth getting an expert opinion.

[Jade Warshaw]

Yeah, I agree. So if you heard us talk, but you're still not sure, why don't you take our wills quiz to find out kind of where you fall on either side of the fence. And you can do that by going to ramseysolutions.com wills quiz and you can find out which approach is right for you. All right, thank you, Rachel. Let's go to Gina in Jacksonville, Florida. Hey, Gina. How can we help today?

[Caller]

Hey, ladies. How's it going?

[Jade Warshaw]

Doing great.

[Caller]

Awesome. So my question today has to do with investing, but also insurance. My husband and I have gone through Financial Peace University, and we've taught it two times. We're debt free. We're. But we are also saving for a home. We sold our home like eight years ago up north and moved to Florida, and we've been saving since then, bought new cars and all that stuff. Completely debt free, cash flowing, everything.

[Rachel Cruz]

Good for you guys.

[Caller]

Awesome. Thank you so much. So we are at this point maxing out, out basically all of our retirement accounts and my husband recently got a new job and the health insurance has doubled. Our high yield health insurance has gone from $3,000 a year to $6,000 a year. And we don't use it ever. So we cash flow all of our health expenses because we do all alternative health. So we have a chiropractor, metro massage, acupuncture.

[Rachel Cruz]

Yeah.

[Caller]

Nutritional therapies, everything.

[Rachel Cruz]

And they don't take insurances traditionally.

[Caller]

Yeah, correct. Yeah. And I've even tried to like, I've taken hours even, like, you know, sending in receipts, trying to see if I can somehow like anything. Nothing has ever been.

[Jade Warshaw]

So did you drop your policy? Is that what you're thinking of doing? Letting it lapse?

[Caller]

Well, I just keep going back and forth because technically it's in play, like right at this moment. Like we did sign up for it, but now open enrollment is coming around again and I'm thinking I'm going to lose out on the investment portion of the hsa, which we've been maxing out the last few years, but have never taken any money out of. And so I'm like.

[Rachel Cruz]

Which you can keep until 12,000, keep until, what is it, 60, 62, and be able to, I mean, it can work just like a investing vehicle, like Your, you know, 401k or any type of investment. Like you can actually use that money and invest it, which is great.

[Jade Warshaw]

But you're worried about the premium, the 500 bucks a month, Is that what you're worried? Are you worried about the premium? You just don't want to pay the premium anymore because you don't really use the insurance? Is that what you're saying?

[Caller]

I can just invest that and continue to cash flow my health care and just invest separately. I mean, we're also doing about $1,000 a month in an outside retirement.

[Jade Warshaw]

What's your nest egg now? What are you guys worth now?

[Caller]

It's not huge because it's only been the last few years. Maybe like 500,000.

[Rachel Cruz]

I don't know if I would do it. Wouldn't. Because. Because the truth is if something, if a car, I mean, if somebody could.

[Jade Warshaw]

Get in a car accident tomorrow and, yeah, brain surgery and it would.

[Rachel Cruz]

Yeah, millions of dollars. You know what I mean? Like, it just. I mean, the health care costs are just, it's extreme. And so if you don't have health insurance in place, I mean, it's worth. Would be worth it even if I don't use it year to year. It's an extra padding. If something big happens, a diagnosis, I mean, anything.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

You're gonna. You're gonna want help. Health insurance. I would not. I would not risk cash flowing.

[Jade Warshaw]

That. You got to remember it.

[Caller]

And that's basically what my husband thinks, too. But I'm like, yeah.

[Rachel Cruz]

And I'll tell you, you talk to. You talk to Sharon Ramsey, Gina, and even my sister, and they are on your train. They are.

[Jade Warshaw]

Oh, man.

[Rachel Cruz]

Activated charcoal with stomach bugs. I mean, they're into the. Yeah, I think that's great. But they all keep health insurance.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Because the truth is. Yes. If something really bad happens to you, one of your children, like, you know, I don't know. Yeah. We don't get like in a medical debate, but. But I think you're going to want surgery or.

[Jade Warshaw]

You know what I mean? Charcoal can't fix certain things.

[Caller]

Sure, I get it. I just. I guess I was just thinking, like, would the auto insurance just come into play at that point? The umbrella insurance? Like, there's other insurances that we have that I thought, okay, if something like that happens.

[Jade Warshaw]

Tell me. Tell me the problem you're trying to solve. What. What I think what you hate paying.

[Rachel Cruz]

The 6,000 every year is that you'd.

[Jade Warshaw]

Rather invest the money.

[Caller]

Absolutely.

[Jade Warshaw]

So what I would do if I were you, if I was so hung up on that $500 a month being invested, I'd go out and find another $500 a month and invest it. I'd earn it, if that's what you're trying to do. But.

[Rachel Cruz]

Yeah, I just see this. And insurance, too. I'll say this, Gina. Like, you know, home insurance, ours keeps going up and it's just. It's a little bit of a pain.

[Jade Warshaw]

No one likes this.

[Rachel Cruz]

Yeah. But it's for the just in case, the worst case scenario. That's what it. Insurance is for. And, you know, even life insurance. Right. You have life insurance in case something happens to you for your kids and like. And you know, God forbid, nothing does happen. But it's the just in case.

[Jade Warshaw]

So I.

[Rachel Cruz]

So I would keep. Yes, I would keep it for the just in case category. And you're paying for peace of mind if something really, really bad happens that costs literally hundreds of thousands, millions of dollars of, you know, whatever may happen that you have that in place, so.

[Jade Warshaw]

That's right.

[Caller]

Or at least my husband's peace of mind.

[Rachel Cruz]

Yeah, that's right. I know, I know. I Hear you. I hear you. But, but, yeah, I don't think I, I would let that, let that go.

[Jade Warshaw]

No, if anything, think of it as, there are certain things in life that feel like a pain in the butt sometimes, like insurance or when you, you know, people call in there, like, I don't want to go to the next tax bracket. And I'm like, guys, at the end of the day, actually, these things are a blessing to be able to afford and to be able to, to shoulder the weight of that payment and to say something like, oh, man, if I could have that money, I could invest it. Because some people, you know, they, they can't even afford the payment.

[Rachel Cruz]

That's right. That's right.

[Jade Warshaw]

Kind of try to keep it in perspective like that. It's great to be able to transfer that risk. It is a pain in the butt, but at least you can, at least you can handle it. It's not causing you to miss out on dinner or anything like that.

[Rachel Cruz]

And you guys are killing in other places too. So I, yeah, I would, I would, I would take the abundance approach, like what Jade's saying.

[Jade Warshaw]

That's right. It's a good thing to have it and it's great that you can afford it and God forbid you never need to use it.

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[Jade Warshaw]

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[Jade Warshaw]

Right, well, welcome back to the Ramsey Show. We're here in the Ferry One's Credit union studio, continuing to take calls about your life and your money. I'm Jade Warshaw. Next to me is Rachel Cruz. And we're just chopping it up with you guys. So call in, triple 882-55-5225 and we'll do our best to get you on the phone line. We've got, we've got Jasmine in Raleigh, North Carolina. Hey, Jasmine, how can we help today?

[Caller]

Hey. Yes, so I'm calling kind of on behalf of my husband. We live about two hours away from Raleigh in a. Basically, my husband is a wonderful guitarist and his income has decreased pretty steadily over the past few years due to. Not to his part, but the people he plays for. So I was calling to see exactly how he could increase that income and be a better contributor because I feel like it's difficult for us because of the stress of not being able to play as much as he wants to.

[Jade Warshaw]

So what level was he playing on? Was he like, touring with a major artist or was he explain. Doing session work? Like, explain what that was.

[Caller]

So he's not touring with a major artist, but he is touring with a guy based out of Nashville. So he commutes back and forth between our little town in North Carolina and Nashville quite. Or used to, a couple of times a month. Now it's like once a month in the winter months. It's hardly any.

[Jade Warshaw]

At the height of that. What was he earning when he was doing that? Like, at the height of doing his thing.

[Caller]

So at the height, he was actually still living in Nashville majority of his time and also working with another music company as a sound engineer.

[Jade Warshaw]

Okay.

[Caller]

And so he probably at the height was doing. Doing, I don't know, maybe 75.

[Rachel Cruz]

How long ago was that, Jasmine?

[Caller]

That was three years, three and a half.

[Rachel Cruz]

Okay.

[Jade Warshaw]

And what's he been making since?

[Rachel Cruz]

Why did y' all move to Raleigh? Sorry? Why did you move to Raleigh? If he's a musician and he's doing.

[Caller]

Music work in Nashville, So he moved back home.

[Rachel Cruz]

How long have you guys been married?

[Caller]

Never wanted to live in Nashville. We will be four years, years or 10 years this coming.

[Rachel Cruz]

Okay.

[Jade Warshaw]

So he made the choice that it was more important to be home than keep this gig, the sound engineer gig, and the playing gig. And now he's in Raleigh and can't find the work.

[Caller]

Yes, he's still playing with the same guy. It's just that guy doesn't play his own.

[Rachel Cruz]

Yeah, but he was also supplementing touring and doing sounding because we know Nashville. I mean, there's like tons of musicians and they do all kinds of things to be able to supplement a fool.

[Caller]

There's no.

[Rachel Cruz]

Yeah, so that's his choice. But you do understand it would be like. Like, you know, we have some students from Pennsylvania, I think. So I'm like, it'd be like working at Hershey's and being like, oh, I still want to do chocolate, but I'm going to move to Atlanta or something. And you're like well there's not a lot of chocolate, you know what I'm saying? Like you moved out of the, the, the work. Not that you can't be a musician anywhere but you.

[Jade Warshaw]

But what was the plan is the question. What was his plan?

[Caller]

Yeah, the plan was to still work with the musician and then another guy that is has a band here and that he does sound for here and so he still works with these guys. This is just not enough problem lies that they aren't. Yeah, they're not working as often and not making as much money.

[Jade Warshaw]

So I'm going to tell you, I'm going to tell you as a person who lived in this lifestyle a It feels like he's got all of his eggs and one one to two very small baskets. And that gets tough because he's relieving reliant on these people because to do their job and if they're not doing their job, he can't do his job right. So because of that he's got to have diversify and have his hand in a lot of different things. And that is a full time job. That alone he's got to be on this all the time. He should be out marketing, you know, networking every single night. He should be at everybody else's live shows getting to know people. So if somebody's sick that they're like oh I know a guy who can sub and he's great on guitar. Guitar. Like that's. Has that been his full time job? Because if it has been and he's still not getting anything then he's got to consider where his strength lies. If his greater strength is in sound engineering, maybe he needs to veer more towards that side of things. If it. Do you see what I'm saying? Like I think as a musician, as an entertainer, you have to have a lot of tough conversations with yourself and you have to be very realistic on what you need to be doing next. Especially when there's money involved in a family involved. So what have you observed? Is he grinding or is he kind of like.

[Caller]

He has been distracted with a new baby? So I. We had our baby not almost 10 months ago. So that has definitely taken a front seat to his work and being that person that is always going and networking and making phone calls and all that you just talked about so that.

[Jade Warshaw]

But it's been four years. You said four years ago he was making 75,000 and what's he making now?

[Caller]

This year he. Last year it was about 45 to 50. This year it's 30.

[Jade Warshaw]

Yeah. That he's, he's on the decline. So you guys, you, you said that you're calling in for him. Did he ask you to call? Is that what you meant by that? Or you, you're calling for you.

[Caller]

I'm calling for me to kind of see how I can help him.

[Jade Warshaw]

I think you need to sit down and I think you have to frame this not around his talent, not around what he can or can't do. You have to just frame it around the reality and say.

[Rachel Cruz]

And of your reality too. What I'm feeling.

[Jade Warshaw]

Yeah, it's about. Yeah, you're talking about it from your perspective, which is we have a brand new baby. It's been four years and I'm feeling a shift, I'm feeling a decline and I'm very scared because I haven't. You, you're not talking about it and I don't see what the plan is. I don't know what the plan is, but I know that we need one. Right. Have you had those types of conversations with him?

[Caller]

Yeah, we've talked about the plan and it's. Oh well, once we, you know, get new babysitter, well established because he was kind of being a stay at home mom while I was working because my income is more. Oh, and what's your income? Yeah, and so mine is 83. 3.

[Jade Warshaw]

Okay. So I will say I thought you were. I, I thought his income was the only income. So it's good that you are working. Got it.

[Rachel Cruz]

Do you enjoy your work, Jasmine? Is that what you're wanting to do?

[Caller]

Oh, I mean, ideally if I could be a stay at home mom, that would be amazing. But I can't do that. We can't financially. But I do enjoy what I do.

[Rachel Cruz]

Okay. So your concern though with him because, you know, household, you guys are at over six figures right now, even with him making 30. And he's replacing child care. Right. I mean he's not. You guys aren't paying for child care while you work. He's the one watching.

[Caller]

He was. He doesn't do well with child care because like he feels like he needs to be the provider and then he.

[Jade Warshaw]

Needs to go out and provide. Provide respectfully.

[Caller]

Yeah, like you can't have.

[Jade Warshaw]

He can't have it both ways.

[Caller]

Yeah. And we had discussed like what's the plan? And his plan is. And well, once we get, you know, somebody in, I'll be able to focus and, and work and bring like get more gigs and bring income.

[Jade Warshaw]

This is what you need to remind him. The baby's 10 months old. But this decline has been happening for four years. So that the baby might be a distraction, like a further distance distraction, but it's not the root of the problem. And I think that's what you need to talk with him about is say, I get it, we do need child care. I'm not saying we don't, but this precedes that. And that's what I'm worried about. And you sound like a really kind, sweet, you know, a little bit more soft spoken. But I think that you need to lay this out in very clear terms that he's going to understand that you also have dreams here, which is to say stay home. So your dreams matter and his dreams matter and you've got to come together on a plan and a tipping point. That's like the no the go no go on this music deal. Hey, what's up, guys? It's Jade. You know that moment when you check your bank account and think, oh, wait a minute, how is my paycheck gone already? Yeah. Not cool. You work way too hard to feel broke like that. And the truth is, you deserve better than just not feeling broke. You need more margin, more breathing room. And that's what our EveryDollar budget app helps you find. Most people free up an average of $3015 in just the first 15 minutes in the app. Just imagine how much you could find to pay off debt, stack savings and just breathe easier with that money strength, stress gone, things might seem tight. I get it. But I promise you, you've got way more margin than you think. And with every dollar, you'll find it. Download it for free today in the App Store or Google Play today. All right, today's question of the day is brought to you by why Refi? So if your private student loans are in default and if you're feeling stuck, just know you're not out of options. Okay, why? Refi specializes in helping borrowers, just like you find real solutions with low fixed rate financing. So go to y refi.com Ramsey that's the letter y r e f y.com Ramsey. Remember, it may not be available in all states.

[Rachel Cruz]

Today's question comes from Ryan in Vermont. He said, I'm 40 years old and engaged to a lady who is 37. However, I'm struggling to see how to move forward. I own a house and I've been using cash to upgrade and repair the home. She believes that I should put her name on the house without her putting anything into it. I disagree and have asked that she at least match some of the equity before her name goes on the house. She makes significantly more than I do, but chooses to own horses. And we need. We need George on this car. Her hobby causes her not to be able to cover her own bills because she spends so much on them and their upkeep. I'm at a loss about how to approach this issue. I have studied the Ramsey principles on how married couples should approach finances, but I can't figure this step out for us. How do couples merge finances when they completely disagree on how their money is being allocated?

[Jade Warshaw]

It's a lot there, Ryan.

[Rachel Cruz]

I don't think you're worried about the house. I think you're worried that you're marrying someone that can't do math.

[Jade Warshaw]

There's a lot there, right? Yeah.

[Rachel Cruz]

I'm like, girl, you're 37. Like, I'm sorry that you're. Yeah, I'm with him on this. Your hobby causes you not to be able to cover your own bills.

[Jade Warshaw]

Yeah, that. Well, I do. Okay, let me. I don't know if it was just the way I heard it, but I also feel like he has a tone.

[Rachel Cruz]

Yeah. With the house.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

But I think it's deeper. I think it's. Cause he's seeing her not being able to function as a human being, and then she's, like, just gonna jump in. And he's like, are you gonna be able to help function as a married couple, or am I gonna be drowning in irresponsibility the rest of my life because my fiance isn't even covering herself? Like, I think that. I think it's a deeper fear. I think it's coming out as the house, which I don't agree with. Ryan, I don't agree with you on that. Yeah.

[Jade Warshaw]

From a principled standpoint, I agree.

[Rachel Cruz]

I'm 37, and she can't pay her bills because of her. Of horses.

[Jade Warshaw]

I didn't know. I don't know. And I may have misinterpreted this, but I didn't know if he was saying, like, she can't even cover. Cover her bills. Saying, like, her putting the equity that he wanted is one of the bills that he wants her to cover. Like, I. I was trying to understand if she really is, like, not saying her utilities. Yes.

[Rachel Cruz]

She's not able to cover her. Her own bills because she spends so much on them. The horses and their upkeep.

[Jade Warshaw]

Yeah. Yeah, I guess so. I guess so.

[Rachel Cruz]

I. I think if she was. I think if she was a. I think if she was successful, responsible. She's investing, she's doing this and that. She's got her own place, she's going to sell.

[Sponsor/Announcer]

I mean, sure.

[Jade Warshaw]

Yeah, you're right. You're right.

[Rachel Cruz]

I don't think he'd be worried about it.

[Jade Warshaw]

No, I don't either.

[Rachel Cruz]

I think that you're marrying. I'm sorry, a woman that's not like you're. She's not responsible.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

You're a little uptight, Ryan, so you probably need to like, you both need help. Have a. Yeah. Have a glass of wine and chill for a second. But like, man, I, I think the.

[Jade Warshaw]

You need marriage counseling.

[Rachel Cruz]

Well, you do. And I think. And again, not from like the X's and O's in the, in the math side, but from a reality of what you're getting of genuinely. Money is a stress point for couples, big time. And if you guys do not see things. And again, you don't have to be the same person. She can still be more of a spender, you're more of a saver. But if you're not aligned on a value system at which you approach money, you're going to have an uphill battle to climb.

[Jade Warshaw]

Yeah. 100% hard. 100%. Yes.

[Rachel Cruz]

You're marrying again. I'm so sorry, but a 37 year old.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

You can't live like that your whole life. And so.

[Jade Warshaw]

No, you can't.

[Rachel Cruz]

That's what I would worry about. And that hurt. It's a prioritization of importance in life.

[Jade Warshaw]

Yes. Yeah. Their values are non aligned.

[Rachel Cruz]

Would worry me.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

So no, Ryan, when you get married, you don't need your new spouse to bring in the equity that you put. No. You're all the same. When you get married, you are together. You are one. You're choosing a life with a partner. So get that off. But again, I think he's highlighting that and worried about that because of this other stuff.

[Jade Warshaw]

I agree. I agree. That's like his guarantee that he's not going to get burned.

[Rachel Cruz]

100%. 100%.

[Jade Warshaw]

Yeah. Oh, man. Oh, good luck to you.

[Rachel Cruz]

Good luck, Ryan.

[Jade Warshaw]

Again, you got to have these conversations when you're in like before you're engaged. Like, you got to know who they are financially. Yes.

[Rachel Cruz]

So that you don't get this straight straightened out. I don't know if I'd, I don't know if I could do it.

[Jade Warshaw]

I don't know. I could at 30. You know, I don't know if this is her first or second marriage, but at that age I have a. I was just telling Rachel on the break I couldn't Be out in these single waters at 40. Because the stuff that I could not tolerate.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

Is very high. It gets higher and higher and higher.

[Rachel Cruz]

The standards go up.

[Jade Warshaw]

Oh, my God.

[Rachel Cruz]

I don't know if I want to.

[Jade Warshaw]

Deal with that, man. I could do short at 40 at that point. Oh, that's right.

[Rachel Cruz]

We got a solid 30 years. We could travel the world.

[Jade Warshaw]

I don't know. It's like, I can't say it on the air, but if you've seen Lethal Weapon, Danny Glover's famous line, I'm getting too old for this. Yeah, you know? Anyway, Keaton is in Chicago, Illinois. Online too. What's up, Keaton?

[Caller]

Hey, how you guys doing today?

[Jade Warshaw]

We're doing good. How can we help?

[Caller]

Awesome. So I am currently 24 years old. I don't have any debt, I don't own a car, and recently just found out for my job that for my new location I'm gonna have to buy a car. And I'm looking for direction on should I lease a car based on my salary, should I buy one? And just exactly how much should I spend? And I have to make a decision like the next four weeks. So decided to give you guys a call.

[Rachel Cruz]

Yeah. That's great. Well, you got some time. That's good. How much are you making per year at your job?

[Caller]

I'm making 81,000. Probably like another 5k for bonuses.

[Rachel Cruz]

Okay, Great job. Do you have any money saved right now?

[Caller]

Yeah, so I have like five grand in my checking and then like another 24,000 in investments that I can sell off at any moment.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Single stocks.

[Caller]

It's all just the S and P I put all my money into.

[Jade Warshaw]

Great. So I would say, you know, the rule of thumb here is of course, you don't want it to the car to be anything with an engine to be any more than half of your take home pay. And honestly, I mean, you're young, you're starting out. I probably wouldn't even go that high. I would try to keep this frugal. Do you have. You said you have no debt, right?

[Caller]

No, I don't owe any money.

[Jade Warshaw]

No debt. And this 24,000, is that your only. That's your only savings anywhere? The 24 and the five that. That 30,000, right?

[Caller]

That's it, yeah. Then I have like another. Probably like 30 and retirement. But I don't really.

[Jade Warshaw]

Right. We don't need to touch up. Okay, great. So what do you have your eye on? What are you looking at? I mean, if you tomorrow were to choose something, what would you spend I'm.

[Caller]

Like thinking, I think I want to spend like 15 to 20k because if I, in my mind I'm like, if I buy a cheap car that, like, is just going to have problems and stuff for, you know, for like 7, 8K, then I'm worried that in like, like another two years, I'm gonna have to buy a new one. I'm gonna spend a time.

[Jade Warshaw]

I agree with you. You're not in a position where you need to have a beater. You're not in debt. You've got a nice savings here. I'm with you. I think if you spend 15 or 20 on a car, that's not a bad thing.

[Rachel Cruz]

Yeah, I literally wrote 15 down. I think that's great. What, what's the commute going to be? Are you driving a lot?

[Caller]

It'd probably be like, I'm in Chicago, so the traffic's insane, but probably like, I think it's 13 miles there. 13 miles home.

[Rachel Cruz]

Okay. But just traffic. Okay. I was gonna say, because if you're putting a ton of miles on it, that's something also to consider of not just like wearing down a car. But that's not going to be the case for you.

[Jade Warshaw]

But you're not getting brand new. You'll get used.

[Rachel Cruz]

Yeah. And leasing it is the most expensive way to finance a vehicle. Like from a mathematical standpoint, you'd be better off getting a car payment than leasing because of the baked in interest and all that and all the fees around it. But we don't want you to get a car payment. We want you to stay debt free and cash flow the car. So.

[Caller]

Me too.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

So I would put those options. Yeah. Off the table and. Yeah. And I would just. Yeah, I'd buy a 1520. I think that's exactly right. 15, 20,000. I think that's great. You'll probably have to pay some taxes on when you're pulling money out. So be thinking about that. And then my next step, Keaton, I think from a financial goal perspective is I would probably just have some cash available, like three months of expense expenses and just putting that in a high yield savings account. Don't invest it, just have it over there, liquid, in case you need it, as just kind of a standard emergency fund. So, yeah, that would be my. That'd be my goal, I think, in the next few months is to get a new car. Get a car. Make sure you got the taxes covered in April. If you got to be paying that.

[Jade Warshaw]

That's right.

[Rachel Cruz]

And then. Yeah. Have a, have a quick savings Goal of about three months of expenses just to set aside. So if you run into an issue like this, like you anything in life that you just need some cash. That way you're not to pulling out your investments cuz what you, what you're invested in is probably great and the rate of return the past few years has been fantastic. So I hate to pull it out of a great index fund but you need the car and at least you have the cash. So we'll see it as a, as a blessing.

[Sponsor/Announcer]

When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan. And that begins with our get started assessment. Go to ramseysolutions.com start, answer some questions and we'll show you what steps to take next. Don't stay stuck, take control of your money. Starting today, go with ramseysolutions.com start.

[Jade Warshaw]

In 2026. Don't just set your goals, you need to actually learn how to reach them. And the 2026 goal planner is here and it's packed with content from myself, Rachel Cruz, John Deloney and all of it's there to help you stay on track in all the areas of your life that matter. Talking about your money, your faith, your relationships, all of it's going to help you follow through on your goal. So you need to know, guys, we sell out on the goal planner every single year. They sell like hotcakes. So do not wait to purchase one. You need to get yours today for 49.9 at the ramseysolutions.com store ramseysolutions.com store or if you're watching on YouTube or podcast, you can just click that link in the description to get one today. All right, we've got Ann in San Jose, California. Hi, Ann, how you doing?

[Caller]

Hi. Great.

[Jade Warshaw]

How can we help today?

[Caller]

Well, I've been listening to Dave Ramsey. I look forward to hearing him every day. And I just was like to have your opinion on how should my younger sister take title to a house that I sent her the money because she didn't have any money. And so I sent her 245,000 to purchase the house in South Carolina. And I just want to make sure that if something happens to her, I would get the house so I can get my money.

[Jade Warshaw]

Oh, okay. So you. I just want to make sure I got the story straight. You gave the money for the house, she purchased it and the house is for her to live in.

[Caller]

Yes.

[Jade Warshaw]

And Then at what point were you hoping to get the title back? Is it just if she were to pass away or was there another circumstance that you would want to get that house back?

[Caller]

Well, she's looking for a job. She said if she. She's looking for a job, she'll start paying me back, that I don't really need the money and I trust her. So if she pays me, fine. The only thing I worry about is if something happens to her. If she was to, you know, die Suddenly or. She's 60 years old and I would then like to have the money or the house back without her husband getting it or her son.

[Jade Warshaw]

Oh, so you would want her to will it to you over her immediate. Does she know that.

[Caller]

Yes, she said she's willing to do a will, but I was told if she does a will, it's going to be in probate and all that.

[Jade Warshaw]

Will?

[Rachel Cruz]

Well, it may go through for a little bit, but I mean, yeah, the will, if it's a state specific will, it'll. It'll go through any legal. But I do want to. Does the husband know this? And the son?

[Caller]

Yes.

[Rachel Cruz]

Okay.

[Jade Warshaw]

All right.

[Caller]

And they're okay with it because they get to live there, right?

[Rachel Cruz]

As long as she's alive. Yeah.

[Jade Warshaw]

And then if she were to pass, they'd have. What would you do? Would you kick him out and get the money?

[Caller]

Oh, I didn't think about that. I mean, probably not.

[Jade Warshaw]

That would be a little heavy handed. But my. I guess what I'm saying is you said you don't need the cash, is that right? No. Okay.

[Rachel Cruz]

What are you worth, Ann? What's going on? What's your net worth?

[Caller]

5,6 million? Without my two houses.

[Rachel Cruz]

Okay, so, yeah, you're doing well. Why do you want the money back?

[Jade Warshaw]

Like, it's a lot of money.

[Rachel Cruz]

It is. But also you're setting up a life for your sister which includes, you know, her family. And if she passes away and it says in the will that it's titled to you, then, yeah, you got to think through are you giving them? And it needs to be all communicated. That needs to be all in the will to be able to say yes within 12 months. And aunt Ann expects us to find a different place to live and you take the house back, which again, if it's everyone's wishes, that's. That's on you guys.

[Caller]

But no, I was wondering if we could do like tenants and common.

[Rachel Cruz]

Do what? Say it again.

[Jade Warshaw]

It's in common.

[Caller]

Tenants in common where they're the tenant of the home.

[Rachel Cruz]

But you have the title.

[Caller]

Right.

But I don't really. I don't want to be responsible for insurance and taxes. She'll take. I don't want those in my name.

[Jade Warshaw]

Oh, boy.

[Rachel Cruz]

That's why, if she passes. You don't want those in your name or. Just today.

[Caller]

Just today.

[Rachel Cruz]

Just today.

[Caller]

I guess I could have think this out a little more.

[Jade Warshaw]

It's complex. I think you have to make a couple decisions. And whatever you decide, you're. You're the captain of the ship, Right. Because you. You paid the money. And it sounds like your sister would go with whatever you said. It sounds like it. It's the. It's the husband that you need to make sure also understands. I just think the main thing is whatever it is, it needs to be a. In writing.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

When. If it ends up being the case that she wills it to you, you need to know about that.

[Rachel Cruz]

Yeah. Why did you do it in the first place, Ann? Were they in need? Did they need a place? Yes, because of her and her husband can't provide enough income to sustain a home themselves.

[Caller]

Right. Yeah. Because her husband was with the military. He's got pst. He's not working, and the money he gets is. They can't live on.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Is the house in San Jose, too?

[Caller]

No, the house in South Carolina is not. Not a community property state.

[Jade Warshaw]

Okay, understood.

[Rachel Cruz]

I'm trying to think. Currently, I'm just. I'm thinking of the best solution because. And I also don't want this whole idea of. Of owing people money, especially within family. It just kind of changes the dynamic. So I'm just thinking out loud here, Ann. I wonder if you tell her, hey, you don't have to pay me back. I mean, you're worth a lot and you gave this as a gift. But maybe you say instead, I need you to be in charge of the bills of the home, the property tax, all of that. That's what she's in charge of. Because you pay. She paid for the home outright. There's no mortgage on it, Correct.

[Caller]

No mortgage. She bought a cash with the money I sent.

[Rachel Cruz]

Yes, I hear you.

[Jade Warshaw]

So legally, everybody thinks it's hers. Like, you're not on the hook for anything right now. Correct. So correct. Does it hurt you? Like, does it bother you if. If it becomes a gift?

[Caller]

No, it's just that I kind of. My, you know, my poor husband and I worked all our lives, and now my husband, I just have helped my family. I gave my mother a house, my brother a house.

[Rachel Cruz]

Oh, wow. And handing out houses.

[Jade Warshaw]

Oh, my God. I know.

[Rachel Cruz]

And Jade and I are great.

[Jade Warshaw]

We're great people and I would will it to you. I'm just kidding. So is it that you're. You just feel like I've done too much, maybe I need to pull back on this? Is that what it is?

[Rachel Cruz]

You're having like a. Like a little regret maybe?

[Caller]

Not really. The reason I do it is that she rescued old dogs, rescued greyhounds, and they cost a lot of money for vet bills and to feed them, so I'd always help with that. And you know anybody who rescues animals, to me, we give. You give them a house to all these rescue places? Yeah.

[Jade Warshaw]

Oh, wow. Okay.

[Rachel Cruz]

What I want you to work on. So I need you and your husband to get on the same page. And if he wants this paid back because he feels like it's off, then that's y' all sure. Y' all go for it. In the will. It needs to be very clear. Ann gets the house back if she passes. Husband and son have to be out within 12 and they have to find a place to live and we're done with it. Right. Everyone needs to be on the same page. But also, Ann, you sound like a very kind person, but you are on the edge, if not the textbook of an enabler.

[Jade Warshaw]

Maybe some boundaries.

[Rachel Cruz]

I know, and I want you to work on that, Ann, because solving problems with just money doesn't always work. Even though it feels like it does, it still can leave people in a cycle of irresponsibility, and that's not good for. For them. And so I love your generous heart and your spirit, and I think it can be taken in such a better, healthier way as a recipient, if the recipient is actually doing the work to take care of themselves as well. Right. You pair that with generosity and it's a really beautiful pairing if you're able to do it, which you are financially, which is so great. But you just need. Next time you want to give a house away, just pump the brakes and just you and your husband need to get on the same page and just think, okay, what's the situation? Situation that we want to give to. And again, I love the generous spirit when you got 6 million dollar net worth, like to be able to do stuff for people, I mean, it is amazing.

[Jade Warshaw]

But you also want to give in a way that it's not a burden.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

For both.

[Rachel Cruz]

You know the pattern of giving houses away.

[Jade Warshaw]

Yeah. Well, it's creating. It's a blessing on the front end, but it's creating a burden on the back end. Chaos. So Thinking through those things is very, very important. And yeah, I'm. I'm with you. Borrowing a house is probably not the way to give. You probably want to either give it or some stipulations. Yeah, you need some stipulations. All right. Our scripture and quote of the day, job 34, 32, says, Teach me, me what I cannot see, and if I've done wrong, I will not do so again. Simon Sinek said, appreciate when things go awry, it makes for a better story to share later. I know. That's right.

[Rachel Cruz]

That's funny.

[Jade Warshaw]

That is good. That's like. Well, I told Rachel my story that went awry. I was in New York City this weekend, and it's true. When things go awry, you got a.

[Sponsor/Announcer]

Story out of it.

[Jade Warshaw]

A better story. That's right. Anyway, let's go to Lewis in New York City, New York. There's. We go. What's going on, Lewis?

[Caller]

Hi. Thank you so much for taking my call.

[Jade Warshaw]

You're welcome. What's going on?

[Caller]

Just a little backstory. I'm 23, and I've been hustling non stop since June after graduating to pay off my debt.

[Jade Warshaw]

Okay.

[Caller]

Now I'm struggling with whether hustling so much and not really being home as often if I'm losing time, quality time with family while health isn't good.

[Jade Warshaw]

Oh, whose health is not good? Yours or somebody in your family?

[Caller]

My parents.

[Rachel Cruz]

Okay, I'm sorry, is. Is. Is there something immediate happening, or is it just kind of like they're just getting older and their health's declining?

[Caller]

Exactly. Just. Just age, getting older, losing that time.

[Jade Warshaw]

How old are they?

[Caller]

70.

[Jade Warshaw]

Okay.

[Rachel Cruz]

Okay.

[Jade Warshaw]

All right.

[Rachel Cruz]

Are they, again, is there, like an immediate health concern or are they generally healthy? You just see them getting older?

[Caller]

Generally healthy, but we do have, like, a time on it. The doctor said, like, within eight years, so.

[Jade Warshaw]

Oh, so there's a diagnosis. Yeah. Okay.

[Rachel Cruz]

Okay. Okay. How much debt do you have left, Louis?

[Caller]

So I started with 130,000, and I'm down to 90,000.

[Rachel Cruz]

Good for you. Okay. And what do you expect if you were to stay on this pace? How long it would take you to pay off that 90?

[Caller]

So it's nice. I live with my parents right now. I'm a little old to still be there, but I'm able to throw about 7,000amonth at the loans.

[Rachel Cruz]

Amazing.

[Caller]

Be able to have it done by the by next Christmas.

[Jade Warshaw]

Okay. Okay, so.

[Rachel Cruz]

Well, let me. Okay. Yeah. Okay. So. I mean, I can't, can I? Just from someone that's not emotionally Entangled in the family. Just from an outsider's perspective. June we got July, August, September, October, we got about four months of hustling. You live with your parents, there's possibly an eight years diagnosis of something. You do have time. So if you stayed on the track that you're on for one year.

[Jade Warshaw]

I.

[Rachel Cruz]

Think you'll be okay. I mean, and I think you'll probably pay it off sooner than that. But just from like a time perspective, like, let me say this, Louis. If you had called and your mom had a diagnosis and she had four months to live, I'd say pause everything.

[Jade Warshaw]

Yes.

[Rachel Cruz]

And do what you gotta do with your family like that. You would never regret that. But it doesn't seem necessarily urgent. And I think if you got at a of debt faster, it would free you up not only to get out on your own, but also to have the ability to actually save and build wealth and do some things in these next seven years to maybe even be a blessing to them in some way.

[Jade Warshaw]

Yeah, I'm also thinking about, okay, so you're, you're living with them now. Let's pretend that you weren't living with them and you were just, you know, as a 20, you're 23, right?

[Caller]

Yeah.

[Jade Warshaw]

As a 23 year old, you're just in your apartment, Right. What is, what does quality time look like? Is it we do a family dinner every Sunday, Is it. I, I want to challenge that because living with them now, I'm like, you see them every day, you probably see them in the morning, you maybe probably see them when they come home or when you come home. So I'm, I'm wondering, what is it that, what's the specific thing that you're like, man, I'm missing out on that because that might, maybe there's a remedy there sooner than later. So if it's like a family dinner thing, maybe instead of family dinner, we do a thing on Saturday, you know what I'm saying? Is it something that you can shift around to where you're still feel like I'm doing the special thing with them that I feel like I'm missing out on, or is it just in general? I'm just used to seeing them more throughout the day. Because then I would just challenge that and say, hey, if you didn't have this, that I'd be like telling you to move out anyway and start your life and go visit them when it makes sense. Does that make sense?

[Caller]

Yeah, that does. And that's been like, part of the question is I feel like I Should be moved out already. But they're not rushing me to move out. My mom's always saying, what's the rush for? You have no bills here. We pay for your food and whatnot. But it also. I listen to you guys a lot and it could dwindle my growth as a man.

[Jade Warshaw]

Sure.

[Rachel Cruz]

And I do wonder, are they, are they questioning how hard. How hard you're working?

[Caller]

Yes.

[Rachel Cruz]

Okay. They're putting some guilt on it.

[Caller]

Like a dog.

[Rachel Cruz]

What does that mean? How many hours a week?

[Caller]

Probably over a hundred. Oh, wow.

[Rachel Cruz]

So it doesn't work.

[Caller]

About 110 to 120,000.

[Rachel Cruz]

Okay. What are you doing? Is it a bunch of side hustles put together or one main job?

[Caller]

I have a main job. That makes 70k base.

[Rachel Cruz]

Okay.

[Caller]

And then I do a bunch of side hustles. I do freelance work. I'm a dog sitter. I do Uber.

[Rachel Cruz]

Yeah.

[Caller]

Teach at my alma mater.

[Rachel Cruz]

Golly. Well done.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Yeah. And I wonder is some, some of this feeling like I need to pull back because of my parents health and spending quality time with them that's coming from them more so than you.

[Caller]

Yeah.

[Rachel Cruz]

So there is an interesting season of life that I think happens naturally if you. And again, not that this is right or wrong, Luis, I'm not saying this at all, but if you like get it, you know, you're out of college and you get married, there's a natural break that happens. Or there should be. Right, There's. Or you get a job in a different city and your first job is in Dallas and you're like, I gotta move.

[Jade Warshaw]

Independence.

[Rachel Cruz]

There's some natural breaks that happen. And when those don't naturally happen, which again is not a bad thing. It's not that you staying, you know, near your parents or still working, like none of that is wrong. But there's a harder dynamic to happen for a natural break to happen because it kind of naturally sets back into the norm of what you were like at 15. 15 year old Lewis versus 23 year old Louis. And there's a difference there. And yeah.

[Jade Warshaw]

15 year old Lewis is at dinner every night. You know, there's an expectation.

[Rachel Cruz]

Yeah. And I think too for some parents, and I don't wanna put this on yours, but there's a, there's a codependence there that you're around and you're there and they need you and all of this and.

[Caller]

No, there is. I'm still vacuuming the house.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Yeah. So I'm like, man, Liz, that's a hard. Do you have do you have good friends in your life or any, like, older men that are not family in your life.

[Caller]

Not outside of work?

[Rachel Cruz]

Okay. I just wonder if there's, like, someone that knows you well to help kind of guide this. Cause I feel like this next season for you is really important to gain that independence. And there's gonna probably be some harder, uncomfortable, sad conversations with your parents. And listen, I have a son, and I joke all the time that Charles can live with me forever because I just need so many. But when rubber meets the road, I'm like, no, I want him to go out and become his own person. So I'm like, there is a natural bent towards a mom and her son. Absolutely. But the fact that they're putting a lot of weight on you, Louis, in this, and that makes me sad because you're gonna have to untangle that yourself, and there's gonna have to. Yeah. Be some harder conversations of some boundaries of what's good for you and not what's good for us as a family unit at this point in life. Right. I just think that. That there's a. Yeah, the unit.

[Jade Warshaw]

The unit changes over time. It morphs and it changes, and none of it's all for good because you're. You have to be able to go out in life and do what they've done, which is they started a family, and they. They built on what they had, and you need to be able to go out and do that, too. And I. I honestly would probably challenge you to do that soon. Like, you don't need to have paid off this 90,000 in debt before you go live on your own. I would say to rent, like, you can't go buy something because you're in debt, but you can go rent an apartment and have a roommate and kind of get that taste of independence. And I think at the core of this, this is no longer a money question. I think it was more about you feeling good about going out and being Louis. And, you know, yeah, our parents age and they get older and the time shrinks, and we figure out what that looks like in our. In our life as adults, with other things that we're balancing. Balancing. And that's kind of. That's kind of like the facts of life. It's just kind of the way it happens.

[Rachel Cruz]

And, yeah, you're not a bad son, Louis. Everything's on fire. But I would start. I'm with Jade. I would start kind of pushing some changes for you. Right. And this is all for you, and you're not doing anything wrong. So hear me say that everything that you laid out, I'm like, nothing here is wrong.

[Jade Warshaw]

That's right. Well, that does it for this hour of the show. Thanks for hanging out with us. And remember, there's only ultimately one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.