You Can’t Control the Past, But You CAN Control the Path Forward

Summary

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The Ramsey Show

Episode: "You Can’t Control the Past, But You CAN Control the Path Forward"

Date: November 18, 2025
Hosts: Ken Coleman & Jade Warshaw, Ramsey Network

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Main Theme & Purpose

This episode focuses on helping listeners break free from financial mistakes—especially around debt—by taking intentional control of their future money path. Through live calls, Ken and Jade give practical, empathetic advice on debt reduction, budgeting, navigating financial crises, setting boundaries, and finding hope after setbacks. The tone is supportive and direct, with the message that, no matter your past, you can write a new financial story with the right strategies and mindset.

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Key Discussion Points & Insights

1. Tackling Overwhelming Student Loan Debt (00:38 - 09:01)

• Case: Tracy from Dallas struggles with $140k in private student loans, now down to $106k after nearly a decade, plus additional family debt and tiny home payments.
  • Debt feels crushing, leading to thoughts of default.
• Advice:
  • Default is NOT recommended—especially when young and with potential for earning.
  • Use the debt snowball method: List debts smallest to largest and attack the smallest to build momentum, rather than focusing on interest rates.
  • Consider selling items—like their car—for immediate budget relief.
  • Utilize budgeting tools (EveryDollar app recommended).

“People get tired like you have, and they don’t see it through till the end. … The method that Ken and I are going to explain is the method that we have found and has been proven to work over time.” – Jade Warshaw [05:13]

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2. Navigating Business & Personal Debt After Crisis (10:52 - 20:41)

• Case: Emily from Los Angeles faced a major car accident, lost her profitable organic skincare business, has large business ($250k) and personal ($89k) debts, and complicated car/settlement process.
  • Medical leave resulted in zero personal income, husband earns $90k, struggling to make ends meet despite downsizing.
• Advice:
  • Liquidate unsold business inventory as priority ("a hundred thousand dollars in your garage") to attack business debt.
  • Husband should pick up side hustle/freelance work to help.
  • Avoid floating costs on credit cards; rely on cash from inventory instead.
• Notable Solution: Leverage their former loyal customer base for inventory sales—use their community to bridge the gap while awaiting settlements.

“This is your best chance to get some relief here while we’re waiting on settlements and all the things.” – Ken Coleman [17:05]

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3. Family Disputes over Money Owed (22:11 - 31:28)

• Case: Lauren in Minneapolis—her brother damaged her car but avoids paying a $2,000 deductible; insurance deadlock and family tension.
• Advice:
  • Persistence: Repeatedly ask brother directly and involve parents if necessary.
  • If conversations fail, escalate—consider small claims court or repeated, inconvenient reminders.
  • Emotional family situations may require tough love and boundary-setting.
• Memorable Moment: Ken’s humorous (and forceful) recommendation to “roll up to his house … and start pulling stuff into the living room. … I’m adding up $6,000 worth of your stuff.” [29:39]

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4. When Accidental Landlords Lose Money (34:44 - 42:44)

• Case: Oz, Miami—owns a Tampa rental at a $400/month loss, didn’t plan to rent but couldn’t sell after moving for work; contemplating waiting for property value recovery.
• Advice:
  • Sell now, take a small profit (even after early lease exit if possible), and cut recurring losses.
  • Don’t become a “default landlord”—only own rentals intentionally and make sure they cash flow.
  • Watch local market trends (Tampa cited as declining).
  • Use real math rather than emotion when evaluating property as an investment.

“When you fail to plan, you plan to fail.” – Jade Warshaw [39:33]

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5. Workplace Manipulation & Personal Empowerment (44:57 - 53:31)

• Case: Isabel from Wisconsin—28, earns only $20k/year as kitchen manager in boyfriend’s bar; housing and car are controlled by the boyfriend, can’t leave due to threat of eviction/job loss.
• Advice:
  • Recognize emotional and financial control as abuse.
  • Prioritize personal safety, independence, and self-worth—seek support systems, a better-paying job, and perhaps therapy.
  • Ken and Jade strongly encourage her to leave the relationship for her own financial and emotional well-being.
• Notable Quote:

“You are an indentured servant. Look it up. That’s what this guy’s got you turned into.” – Ken Coleman [50:26]

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6. Retirement Savings vs. Liquid Cash Decisions (54:30 - 62:34)

• Case: Alice, New Mexico—mid-60s, $1.5M saved, home paid off; wondering whether to add to a spousal Roth IRA or bulk up cash reserves for peace of mind and upcoming travel, car purchase, etc.
• Advice:
  • Ensure 6 months of liquid savings, then comfortably use additional funds for meaningful goals or investments.
  • It's fine to set aside cash in envelopes if that offers peace of mind, although high-yield savings recommended for larger sums.

“You guys are doing really, really well. … I don’t think that you can mess this up at this point with the couple of thousand dollars that you're talking about here.” – Jade Warshaw [59:22]

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7. Handling Business Asset Purchases Just for Tax Benefits (97:21 - 106:21)

• Case: Jason—his dad wants to buy a $90k truck for a small electrical business solely to reduce taxes, even though he doesn’t need the vehicle.
• Advice:
  • Don’t go into debt just to lower tax liability. “You’re going to spend money you don’t need to just to pay fewer taxes. … It never makes sense when you get it all out on paper.” – Ken Coleman [98:20]
  • Walk through real math, not just tax deductions, to reveal the false “savings.”
  • Encourage discussing any strategy like this with a tax professional before acting.

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8. Should I Pull Retirement to Pay Off a Car? (118:58 - 126:13)

• Case: Sadie, Grand Rapids—stay-at-home mom, husband earns $60k, $39k left on a car (underwater), considering pulling from retirement to wipe it out.
• Advice:
  • Never cash out retirement to cover non-essential debt.
  • Consider selling the car and covering underwater amount with a small loan, or side hustle intensively to pay off as fast as possible.
  • Car value rule: don’t have more than half annual income in depreciating vehicles.
• Motivation:

“We want that same energy on the side hustle to get the actual cash to do it because you guys can do this.” – Jade Warshaw [122:04]

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9. Miscellaneous Call Topics & Rapid-Fire Advice

• Should I build a tiny house for aging-in-place and income?
  Advice: Only if you can pay cash, and consider if being a landlord in your late 70s is wise. Focus on maximizing current savings and equity rather than taking on more debt. [109:29 - 117:14]
• Commission-based incomes and budgeting for debt payoff:
  Advice: Keep 2+ months’ expenses on hand, then attack smallest debts with all surplus.
• Holiday spending, couple disagreements, and the value of “happy wife, happy life”:
  Advice: In healthy financial situations, budget for meaningful discretionary spending. Respect what matters to your partner. [77:43 - 81:06]
• Balancing job satisfaction versus security:
  Advice: If two part-time jobs you love equal the pay of a full-time job you dislike, pursue your passions.

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Selected Memorable Quotes & Timestamps

• “Defaulting is not a good option. … I want you to know there’s a way out.”
  – Jade Warshaw to Tracy [01:07]

• “You are an indentured servant … you’re basically working for your livelihood. He’s got you underneath his thumb.”
  – Ken Coleman to Isabel [50:26]

• “I cannot imagine treating a family member that way … I’m sorry that you’re going through that.”
  – Jade Warshaw to Lauren [31:28]

• “When you fail to plan, you plan to fail.”
  – Jade Warshaw [39:33]

• “Don’t get into the landlord game unless you planned to.”
  – Ken Coleman [37:10]

• “Happy wife, happy life, man.”
  – Ken Coleman [80:57]

• “Don’t go into debt for a tax deduction. If you’re flush with cash, sit with a tax pro. But if you’re going into debt, this makes zero sense.”
  – Ken Coleman [103:22]

• “There’s ultimately only one way to financial peace, and that’s to walk daily with the Prince of Peace, Christ Jesus.”
  – Ken Coleman [127:42]

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Notable Insights and Interactions

• Empathy and directness combined: Hosts are frank but compassionate, tailoring clarity and urging tough action, especially in emotionally difficult or abusive situations.
• Debt snowball remains king: Real-life case studies consistently showed that psychological momentum is more impactful than mathematical “best” interest rates or largest debts.
• The emotional side of money: Several callers demonstrated how relationships, stress, and burnout intersect with financial decisions—reinforcing that lasting change requires both practical steps and attention to underlying behavior and identity.
• Creative survival in crisis: Listeners learned to leverage community, liquidate assets, and adapt quickly after personal or medical disasters without turning to more debt.

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Episode Structure & Flow

• Live call format with rapid responses
• No-nonsense, encouraging tone
• Skip all ads, intros/outros; focus 100% on caller content
• Key moments highlight practical tools (EveryDollar app, budgeting, debt snowball)

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Timestamps for Key Segments

• [00:38] Overwhelming student loan debt (Tracy)
• [10:52] Business hit by medical crisis (Emily)
• [22:11] Family money disputes (Lauren)
• [34:44] Accidental landlord headaches (Oz)
• [44:57] Financial manipulation in relationships (Isabel)
• [54:30] Emergency fund vs Roth IRA (Alice)
• [97:21] Tax write-off vs real value in buying assets (Jason)
• [118:58] Should we cash out retirement to pay off debt? (Sadie)

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Takeaways for Listeners

You cannot change your financial past, but you absolutely can change your financial future—starting now. Use proven strategies, get clear on your priorities, don’t let shame, overwhelm, or manipulation keep you stuck, and, most importantly, don’t go it alone. There's always a next step on your path forward.

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Transcript

[Sponsor/Announcer]

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

[Ken Coleman]

Normal is broke, and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey Show. 888 825. 5225 is the phone number. Alongside Jay Wor. I'm Ken Coleman. Excited to have you with us. Tracy starts us off in Dallas, Texas. Tracy, how can we help?

[Caller]

Hi. So I got my bachelor's degree, and my mom kind of handled all the finances in the house growing up, so I knew I had student loans eventually coming out of college, but she kind of handled all that. And I guess my question in that is, is it ever, I guess, an okay choice to just choose to default on student loans when they just become very overwhelming?

[Jade Warshaw]

No. If you were 88 and on death's door, I might say yes. If you had no money. But you sound young, and it seems like there's a lot of life ahead of you to try to make this happen. So tell us. Tell us what's ha. What has you feeling this hopeless?

[Caller]

So when I graduated and once I kind of finally saw that number after a while, my student loans ended up being a little bit under $140,000.

[Jade Warshaw]

Okay.

[Caller]

They had been. My mom refinanced and reconsolidated them, so it's a private student loan, too.

[Jade Warshaw]

Good.

[Caller]

So it just feels like. It just feels like they're never really gonna get paid off. I paid it down to 106 at this point, but it just. It's just very draining. Like, it just feels very overwhelming.

[Ken Coleman]

How long has it taken you to get it? From 140 to 106.

[Caller]

So I graduated in 2016, so about that long. I'm probably about almost 10 years now.

[Jade Warshaw]

Okay. What are you earning and what kind of work do you do?

[Caller]

So I'm a teacher. I think I'm making around 62,000 a year right now. My husband's the same. And so I guess just between our income and other debts and having a new baby, everything just feels like all at once.

[Jade Warshaw]

It is a lot, but. So you're both making 62 apiece?

[Caller]

Yes.

[Jade Warshaw]

That's great. That's fabulous news. And what other types of debt do you have? What other debt do you have?

[Caller]

So we have my husband's car that we're still paying off. We have his student loans, which they're not private and they're much less than mine.

[Jade Warshaw]

How much? Tell me the amount of the car and his loans.

[Caller]

I think he still has 19ish left on the car. His student loans are around 30,000. And then we kind of have a house. And so that's also.

[Jade Warshaw]

Tell me about the kind of house.

[Caller]

So we live in a tiny house on wheels.

[Jade Warshaw]

Oh, tiny. I thought you said we kind of have a house.

[Caller]

Yeah, I did. Yeah.

[Jade Warshaw]

But it's just tiny. Okay, got it. Not laughing at your house, laughing at me, not hearing. Well, okay, cool.

[Caller]

That's okay. So we did do that to cut costs, which it did, which is good. But that's. I think we still owe about 115.

[Jade Warshaw]

On the title as well. Okay, what's the mortgage on that?

[Caller]

We pay about well on that because it's through an actual, like, bank lender. So it is kind of a mortgage, so that a month is 1000. But then we also have land, rent the landowner and work the land 700amonth.

[Jade Warshaw]

Oh, gosh, that's a lot of money for a tiny house. I feel like that's almost a real mortgage.

[Sponsor/Announcer]

Yeah.

[Jade Warshaw]

Okay, we'll talk about the tiny house later. Ken, I'm looking at this and I feel like part of the issue is. And I don't know, but it sounds like you're going in the wrong order on the debt because you're starting with the. It sounds like the private loan is one big loan. Is that right?

[Caller]

Yes.

[Jade Warshaw]

So there's your first problem. We have found that there's generally two main ways that people tackle debt. One is they list them smallest to largest, like we suggest, not by interest rate, not by payment, just the. The full debt itself, smallest to largest. And other other ways are by interest rate or whichever one you feel the worst about. All those other ways don't work. We find that people get tired like you have, and they don't see it through till the end. So the method that Ken and I are going to explain is the method that we have found and has been proven to work over time. Okay. So I'm just setting it up for you to know that this works. So what you need to do is go through and list these all smallest. So it sounds like probably the smallest debt is going to be one of your. One of your husband's federal student loans. Right? Okay.

[Caller]

Yeah.

[Jade Warshaw]

And then when we do that, we can free up that money quickly. You pay off a $3,000 debt, it frees up a little bit of money. You pay off another $6,000 debt, it frees up a little bit of money. Right. And then we can take all that and throw it at the next smallest debt. So that's how we gain momentum on this.

[Caller]

Okay.

[Jade Warshaw]

And that's what I would suggest you to do. The $19,000 car, do you know what it's worth?

[Caller]

I do not. It's probably. It's still probably somewhere around there, somewhere in the 20s. It's a 2019 model.

[Jade Warshaw]

So what's the payment on it?

[Caller]

I think it's somewhere around 400.

[Jade Warshaw]

I would love if you guys could get that $400 back in your budget. Do you guys happen to teach at the same school?

[Caller]

No.

[Jade Warshaw]

Okay. Do you. Are you in the same district?

[Caller]

No. Texas is very large.

[Jade Warshaw]

Okay. Yeah. I'm trying to think of a way that it could be feasible for you to become a one car family for a short season.

[Ken Coleman]

I want to jump in on something that you mentioned at the top of the call, and we just kind of glossed right over it, and that is that your mom, if I heard you correctly, your mom took out these loans in your name and you didn't know about it?

[Caller]

I. I feel like I knew she was taking out loans, but I didn't know what that kind of total price was gonna end up being.

[Ken Coleman]

Okay, and so when did you find this out?

[Caller]

Find out the number or find out the number? I had one. The number in 2020.

[Ken Coleman]

Okay.

[Jade Warshaw]

And you graduated in 16. 16.

[Ken Coleman]

So four years in, you find out the full number. And is his mom helping you out with this? Was that part of the agreement or was it just a parent plus? Tell me a little bit more about this.

[Caller]

I'm not. I'm not sure if it was parent plus. I. I know my parents didn't get their bachelor's degree, so I know they really wanted me to get mine, which is fine, but. So I don't know what type of.

[Jade Warshaw]

Okay.

[Ken Coleman]

Are they helping out?

[Caller]

She was.

[Ken Coleman]

Was there ever any agreement? Tell me more about this. Something about this just doesn't feel right to me.

[Caller]

Yeah, they were helping out for a while. 2020 happened because that's. That's kind of when they stopped. That's when I got. That's when I got the login. Like, my mom sent me the login to. To the platform to log in and view it. And kind of at that point, it was kind of one of those, like, launch situations. Like, this is yours now.

[Ken Coleman]

Right.

[Jade Warshaw]

You know, and up until that point, had she been making the payments or had they just been sitting accruing late payments and whatnot?

[Caller]

She. She was. She was, I guess, kind of splitting them. Like she would take some money from My paycheck and kind of lump it into whatever they were helping pay for at the time.

[Jade Warshaw]

Some money from your paycheck. How is she getting your paycheck?

[Caller]

I think my bank account, I think was still lumped into when I was like 16. And you could have like, you know, the parent kind of over got you.

[Jade Warshaw]

But you have your bank account now.

[Ken Coleman]

Yeah. All right, so Jade, wrap it up here. I wanted to dig into that, but.

[Jade Warshaw]

Total, I would love if you guys could look into selling this vehicle. It's not on fire, but if you can, that's $400 back in your pocket. You got to do the debt snowball, which is what I talked about. We're also going to hook you up with every dollar before you get off. Not only is it a budging app, budgeting app, but it's going to give you the next right step. Since we only had a few minutes with you, the budgeting app is going to take you the next steps further. It's like having Ken and I in your pocket.

[Ken Coleman]

Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

[Sponsor/Announcer]

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[Ken Coleman]

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[Sponsor/Announcer]

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[Jade Warshaw]

Yeah.

[Ken Coleman]

It's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet.

[Sponsor/Announcer]

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[Ken Coleman]

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[Sponsor/Announcer]

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[Ken Coleman]

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[Sponsor/Announcer]

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[Ken Coleman]

Let's go to Emily now in Los Angeles. Emily, how can we help?

[Caller]

Yes, I was calling, I think looking for some advice. Our family was in a major car accident and we have quite a bit of medical needs and we own our own business and my husband also works full time outside of our business through our medical journey. I was put on medical leave, meaning I'm not supposed to be working due to a brain injury that turned into like more complications. So we are losing my income from the business and it's making it very difficult to operate the business. We've tried consolidating debt. We've paid off a chunk of debt. We are just trying to do everything that we know either from baby steps or just like rewriting budgets. But it's taking quite a long time because we can't pursue settlement from our accident until our injuries are a little more progressed. Where they can accurately say like this is. Yep. And so when did it happen? We had gotten to the. We've been dealing with this for over a year now and tell me about the.

[Ken Coleman]

Let me, let me walk you through some numbers here so we can help. Tell me, tell me about the business, the one that you own and then what role do you play? So two part question there.

[Caller]

I'm owner, creator and main employee.

[Jade Warshaw]

What's the.

[Caller]

We manufactured organic like skincare, candles, things like that.

[Ken Coleman]

So it's just, it's just you and the, and the hubs. You guys are the only two. And it's primarily you or is he putting in ours as well?

[Caller]

It was primarily me and then we had family and friends that would help. Obviously right after the accident and things, we lost our storefront and that was a major revenue stream. It was our biggest revenue stream.

[Ken Coleman]

What were you, give me an idea what your revenue was.

[Caller]

For the whole business. It was pushing 350k and growing at over 20% a year for you and.

[Ken Coleman]

What were you paying yourself?

[Caller]

I was averaging 6 to 7k a month, personally paying myself and then we were working on actively paying off debts on good months.

[Ken Coleman]

Oh, that's what I want to ask. How much of that debt, how much of that debt was on the business?

[Caller]

The business currently has about 250k in debt from, from losing the storefront and are. We were wholesaling to over 1100 retailers across the world.

[Ken Coleman]

Wow.

[Caller]

And we had to halt that as well. You were, you were.

[Ken Coleman]

You were really cooking with Greece, weren't you?

[Caller]

We had some really big dreams right before this accident happened. And the accident took.

[Ken Coleman]

Yeah. I'm so sorry.

[Caller]

A lot of that away. So it's okay working through that, but I understand.

[Ken Coleman]

So I'm going to keep walking through some numbers with you so that Jade and I can dive in. Okay, so we have 250,000 in debt on the business. What personal debt do you guys have?

[Caller]

We currently still have 80. I think it's 89,000 in debt. And that includes. That includes personal loan we took out to help consolidate all of our credit cards, student loans, tires. I mean, that's everything but our cars.

[Ken Coleman]

And you still have debts on cars too?

[Caller]

We do. My husband truck.

[Ken Coleman]

Give us the numbers.

[Caller]

19K left on it.

[Ken Coleman]

19K on a truck. What else?

[Caller]

Yep. And then my car has 52k. But the problem with my car is it was in the accident and its value has. The car was six weeks old when it was hit and it didn't total by like pennies. Basically. They repaired it, but it's worth has dropped. We tried to get out of it after the accident and the worth, it was like, worth less than 20k last Christmas. And we can't do anything about that while our settlement still plays out because that's part of the settlement. So we can't get.

[Ken Coleman]

Got it, got it. Got to try to help you here. So I'm trying to consolidate a lot of details here. And so your husband's income is what.

[Caller]

90K?

[Ken Coleman]

Okay. And you have no income coming in at all. Correct?

[Caller]

Correct. Okay.

[Ken Coleman]

All right, Jade, what else do we need to know here? We're trying to get a picture here.

[Caller]

I do, I will say I do have two more months saved for like, I have money in the bank to like, that was to pay myself to get us through to the end of January.

[Jade Warshaw]

So what do you have in the. What do you have in the bank?

[Caller]

I've got 10k left to pay myself out of this month is taken care of. So it's 5k for December and 5k for January.

[Ken Coleman]

So are you unable. Are you unable to pay for your four walls plus all this debt on just your husband's salary?

[Caller]

Correct. We did already downsize our house. We already moved and took care of a massive expense way.

[Ken Coleman]

How much short are you. So how much income are you guys short every month?

[Caller]

Well, 5656.

[Jade Warshaw]

Help us get to that. How how is it 56.

[Caller]

That's all our debt. My husband's income would cover our housing, living expenses, the vehicles, the personal debt. The personal debt, Yep.

[Jade Warshaw]

So how much inventory? I got to believe you've got a bunch of inventory that needs to be sold off. What's that worth? What's the value of that? I do.

[Caller]

I think I have over. I think I have a good hundred thousand dollars in inventory that could be produced and sold or could be just sold.

[Jade Warshaw]

And so when you were selling, was it an online storefront or it was like brick and mortar?

[Caller]

We were brick and mortar. Up until just a few months ago, the brick and mortar was over 220k in sales a year.

[Jade Warshaw]

Got it. And you sold that or you just lost the lease.

[Caller]

We had to close the store because I couldn't. I couldn't run it anymore. And the debt had already piled on that. It didn't make sense to hire someone.

[Jade Warshaw]

Understand? But was it a lease or was it a place that you guys owned?

[Caller]

Yeah.

[Jade Warshaw]

Okay.

[Caller]

Nope, we did not.

[Jade Warshaw]

My question is, is there a way that online you can start to sell off some of this inventory so that you can. What are you running into? What are you running into?

[Caller]

It's just slow. We were online was our slowest revenue stream in the past, and it's just getting like our in person.

[Ken Coleman]

Let me ask a really. Let me ask a dumb question because it's really important, this inventory, and Jade, rightfully so, is locked in on this. This is your best chance to get some relief here while we're waiting on settlements and all the things. If you were crushing it to the tune that I'm hearing, and I believe you in Los Angeles, you had a loyal customer base. Is my gu true or false?

[Jade Warshaw]

Yes.

[Ken Coleman]

And I'm guessing that they found out in some form or fashion what happened to you. Is that true or false?

[Caller]

Yes.

[Ken Coleman]

Okay. I'm wondering here, Jade, come on alongside of me. How do we reach out to that group of people and go, hey, hey, y', all, this is my situation right now. Or you all believed in this product. It would help us to move this product. And because it's going towards getting out of this business until I get healthy, because I gotta believe you're coming back one day.

[Jade Warshaw]

Or even those last retailers that you were in their stores. Can we. Is there a way. I mean, obviously continuing to maintain the business is not an option, but getting those last purchase orders so that we can sell off this lat. Because you said you were in a number of different retailers. How can we so Tap them.

[Caller]

I send weekly emails to all of the retailers. We started doing promotions and even lowering prices on goods, doing online marketing, which we've kind of stepped up.

[Jade Warshaw]

What caused the retailers to not want to continue to purchase? Because I feel like those are two different issues. We've got the. Hey, we got an accident.

[Caller]

We had a. Let me finish this six month pause. Oh, sorry, go ahead.

[Jade Warshaw]

I just want to get clear on this. It. Was it the accident or was business already starting to dwindle is what I'm trying to understand?

[Caller]

No, no. Business is at the highest. It was when we were in the accident. I had to close our wholesale portal for six months immediately because of how bad like the injuries were.

[Jade Warshaw]

Okay, so those, those lines are dried.

[Caller]

Up and they, a lot of them, our most loyal storefronts have come back, but a lot of them, it's, it's, they need goods and then they just move on to the next retailer because they're filling their store.

[Jade Warshaw]

So what, what this is going to look like if your husband is, well, this has got to be his side hustle is figuring out how to sell because this is a hundred thousand dollars in your garage, basically how to sell this because that's going to break you free from this business debt. Otherwise you're going to continue to go into credit card debt. Floating the difference. We can't do that.

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[Ken Coleman]

All right, Lauren is up Next in Minneapolis. Lauren, how can we help today?

[Caller]

I'm good.

[Jade Warshaw]

How are you?

[Ken Coleman]

Good. What's going on?

[Caller]

So back in July, my little brother backed into my car.

[Sponsor/Announcer]

Oh, boy.

[Caller]

And my husband. To pay out of pocket. Not too much money. It was just our deductible. But it's been, you know, about six months. And he hasn't made any effort to pay anything. And so I just like some advice on what to do if he doesn't start paying soon.

[Ken Coleman]

How old is he?

[Caller]

He's 22.

[Jade Warshaw]

Does he have a job?

[Caller]

No, but he has a good income, which is. We have an interesting financial situation, and he's got a great income. He just bought a new house. It was, like, pretty expensive. And he just lives there by himself.

[Ken Coleman]

Where does he get this income?

[Caller]

We get per cap. So we get like. It's Native American per cap, basically.

[Jade Warshaw]

Got it. And what was your deductible that you paid?

[Caller]

2,000 bucks.

[Jade Warshaw]

So he owes you 2k.

[Caller]

Me. That's not, like, a lot.

[Jade Warshaw]

Yeah. So what does he say when you go to him and you're like, you know, junior, I need this 2000. What does he say?

[Caller]

Well, he's been kind of just, like, dodging it. When we. When it first happened, we said something, and I was just like, you know, you gotta pay this. And he was like, well, I'm not gonna pay more than $2,000. He actually owes, like, $6,000 because of all the damage.

[Jade Warshaw]

Wait, wait.

[Caller]

Me $2,000?

[Jade Warshaw]

No, no, no. Help us understand that. If the damage was 6,000, why does he only owe you two? He backed into your car deductible.

[Caller]

He owes me two. He owes the insurance company six.

[Jade Warshaw]

Okay. And is he paying the insurance?

[Caller]

He would pay the 6. No, he would pay the 6 to the insurance, and they would give me 2 from that 6 deductible.

[Ken Coleman]

So he doesn't owe you, he owes the insurance company.

[Caller]

Yeah, technically. Yeah. So we would get the $2,000 from the insurance company once he pays it.

[Ken Coleman]

Well, what are they doing? What are they doing to collect on?

[Caller]

Just trying to collect it. You know, there's not, like, a lot that they can do. They just basically, like, keep reaching out.

[Jade Warshaw]

But insurance has to pay you regardless. Like, that's your insurance, and you filed it. No.

[Caller]

Yeah, apparently we have to wait till he pays it.

[Ken Coleman]

I don't. I don't. None of this makes any. This entire call makes no sense to me. But let's stay on the insurance piece. I. When was the last time you talked to your. The per. Somebody from your Insurance company today. And they told you we can't do your payout until your brother pays his portion?

[Caller]

Yeah, basically they can't pay us anything because it's his job to pay that.

[Jade Warshaw]

What type of policy is this?

[Caller]

Progressive.

[Ken Coleman]

Oh, now we're naming names. There we go. I don't understand what you hoped for calling us on the brother not paying you. I mean, if I had a relationship with him, I would be making his life miserable. And at some point your husband needs to probably roll up to the house and go, hey, punk, what's the problem? Your sister is my wife and you're not manning up taking care of business while you sit here and play video games in your new house. I mean, I'm not talking about threatening physical violence, but I mean, it feels like this is pretty easily handled in a family situation. I can't give you any advice on that.

[Caller]

Very easy to handle at all.

[Ken Coleman]

What's that?

[Caller]

It hasn't been very easy to handle at all. I mean, we've asked him for it. He's not really making any efforts. There's not like anything that I can do to say like, hey, I need you to pay this.

[Jade Warshaw]

Did you file?

[Caller]

Just talking. My husband and I.

[Jade Warshaw]

Did you file through his insurance and not yours?

[Caller]

He doesn't have insurance. He didn't have insurance when he backed into my car.

[Ken Coleman]

Okay, so he hits you and you call your insurance company up and go, hey, my bro backed into my car and they took over.

[Jade Warshaw]

Do you not have collision?

[Caller]

I don't. I think I do, but it's like my deductible was like, I still have to pay a little bit out of pocket. It was a, it was higher than I had.

[Jade Warshaw]

If you don't have collision, then that means your insurance has no coverage to pay for your car. And that would mean the only option is waiting for the other driver's insurance.

[Caller]

So that's probably pay for some of it.

[Jade Warshaw]

Ah, that might have been some of it. It might have been based on the way, the nature of how it happened.

[Caller]

Okay.

[Ken Coleman]

Do you have a relationship with your brother or is it a non existent relationship?

[Caller]

It's kind of. I mean, like, I see him sometimes. I was trying not to be like too pushy about it. So, you know, I still see him and stuff.

[Ken Coleman]

But are your parents in the picture?

[Caller]

That's relationship.

[Ken Coleman]

Yeah, I, I don't know how this is.

[Caller]

I mentioned to my, my mom today, like, hey, you know, if he doesn't start paying, like, we're kind of just not gonna be like doing stuff with Him.

[Jade Warshaw]

Like I'm not gonna.

[Ken Coleman]

Yeah, I don't think that's a real big threat to this guy. I. I would get the parents involved. This is a family meeting at best. I. I don't know how else you get the money out.

[Caller]

Yeah, no, that my mom was not. She's not trying to step in like that at all. She just said she doesn't want to break up our family over something like this.

[Jade Warshaw]

It's gonna break it up. Whether is going to break it up. Let me explain the insurance part for you so that you can at least understand what's going on is one of four things is going on. You told me. Number one, if you tried to file through his insurance, you told me that's not the case because he doesn't have insurance. Number two, I don't think you have full collision insurance because you. They're not paying. And number three, my guess is if you do have collision, since you did not go through his insurance, it says that sometimes if you do have collision for. But the person who hit you doesn't, they're waiting for that insurance to pay them. And so that's the. That could possibly the be. Be the problem there. Either way, I think that if I were in your shoes, I'd be calling up my brother. I have an older brother and a younger brother. I'd be calling up my younger brother today, and I'd be like, you need to make this right. What type of person are you? Like you. I thought you were a person of integrity and character. And I'd like to see that demonstrated. That's what I'd be saying as the older sister. And if he didn't, I would be sure to tell him. I'd be like, man, I'm really disappointed that this is the way you chose to handle this. And you and I both know this is not right.

[Ken Coleman]

Yeah. I've been sitting here, Lauren, thinking what? Well, I've been thinking of what would Dave say? And I can imagine how that would go. And I'm not gonna say that. Cause I'm not Dave. And then I'm going, well, what would I do, Jade?

[Jade Warshaw]

Oh, I'd act a fool about it.

[Ken Coleman]

So, Lauren, I'm gonna tell you what I'd do. I would do two things. One, first gear would be calling, texting, showing up at his house once a day.

[Jade Warshaw]

Oh, we're going.

[Ken Coleman]

We're gonna just be obnoxious. Yeah, we're not violent. We're not threatening.

[Jade Warshaw]

Just getting on his nerves.

[Ken Coleman]

We're obnoxious. You know, like with some justification. And gear two, if that doesn't work, Because I don't think that's gonna work right away. Although you'd be surprised. You just keep showing up, and the guy's like. He's like, oh, blowing up the line.

[Jade Warshaw]

Yeah.

[Ken Coleman]

The second thing I might do is, if that doesn't work, I'm finding a way to get in that house. And. Or I'm knocking on the door one night, he opens the door, and I.

[Jade Warshaw]

Walk in, and I'm sitting in the shadow.

[Ken Coleman]

No, no. I start walking around. I want him to open the door and let me in. And I'm going to start walking around the house, and I'm going to start pulling stuff into the living room, and I want him to go, what are you doing? And I'm going, I'm adding up $6,000 worth of your stuff.

[Jade Warshaw]

A.

[Ken Coleman]

And I'm going to sell it, because here's the deal. You and I both know you owe me $6,000, so I'm getting it one way or another. So this is so stupid that I have no other choice.

[Jade Warshaw]

Go in his closet.

[Ken Coleman]

And so if this doesn't work now, I'm gonna sue you.

[Jade Warshaw]

Yeah. Yeah.

[Ken Coleman]

But I'm sitting there going, realistically, what would I do? And I think it's the obnoxious treatment first. And then I'm literally gonna go in and go, I just found a toaster that's worth 150 bucks. It's pretty new. You like it? I'm selling that tonight, and I'm going to take $6,000 worth of stuff out of here tonight.

[Jade Warshaw]

Mm.

[Ken Coleman]

If you call the cops, that's great.

[Jade Warshaw]

Because they need to come get you.

[Ken Coleman]

Because I would love the cops to know that you're stealing $6,000.

[Jade Warshaw]

Right.

[Ken Coleman]

I mean, I just think you gotta be so difficult that he goes, this isn't worth it. Yeah, I don't know.

[Jade Warshaw]

I don't mind this behavior, Lauren.

[Ken Coleman]

What do you think of that? That's all I got. I'm trying to help you. I'm trying to meet you where you showed up today.

[Caller]

No, that's okay. I just. I just wanted a device. And you got it.

[Ken Coleman]

You got to make it worth his while to pay you. In other words, he's going, my life gets better the minute I stroke a $6,000 check, which he probably doesn't have.

[Jade Warshaw]

Yeah, I don't think he. I truly don't think he has the money.

[Ken Coleman]

I don't either. But I bet he's got some stuff in that new house. Throw a yard Sale in his driveway.

[Jade Warshaw]

Yeah. Yeah. Yes.

[Ken Coleman]

Oh, gosh, what a mess.

[Jade Warshaw]

I can't. I cannot. Can imagine treating a family member, my flesh and blood, somebody I love that way.

[Ken Coleman]

I know.

[Jade Warshaw]

It's just. I'm sorry that you're going through that. That. That in and of itself is disappointing that a family member would do you dirty like that.

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[Ken Coleman]

All right, folks, you don't have to wait for Black Friday to get Black Friday deals. The sale is on now. That includes $12 bestselling hardcover books, $12 question for humans, decks 6, 99 for audio and ebooks, $15 for assessments. All you got to do is go to ramseysolutions.com store ramseysolutions.com store or if you're watching on YouTube or podcast, click the link in the description. If I had time and I was really cranky today, I would go on a rant about the pre Black Friday deals.

[Jade Warshaw]

Oh, I would love to hear you go on a rant, Ken Coleman.

[Ken Coleman]

We've jumped the shark as a culture. Maybe later. I don't understand. Next it's going to be pre Easter deal.

[Jade Warshaw]

Did you say we jumped the shark?

[Ken Coleman]

Yeah. You've never heard that phrase?

[Caller]

No.

[Ken Coleman]

Yeah, yeah, I'll explain that one, too.

[Jade Warshaw]

I need more.

[Ken Coleman]

I. I get a little irritated with. And everybody's doing it now. Ramsay's doing it. We're all doing it.

[Jade Warshaw]

I know it's like we gotta do it. It takes away the cachet of the.

[Ken Coleman]

I just think called a really great deal.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Because it ain't Black Friday.

[Jade Warshaw]

It's not even Thanksgiving. It was just October.

[Ken Coleman]

There we go, folks. That's a whole nother show. Oz699 it's still a good deal. Ramsey solutions.com store no matter when it is, Oz is on the line in Miami. Oz, how can we help?

[Caller]

Hey guys, how are you?

[Ken Coleman]

Good.

[Caller]

Monday.

[Ken Coleman]

Happy Monday.

[Caller]

Yeah, Whatever day it is, whatever date is, it's. Right. So essentially my wife and I, about two years ago, we bought a rental property townhome in Tampa, Florida. Right. But we reside in Miami, Florida. We were both born and raised here. Right. Now every month the payment that the tenants are sending us is around $2,400. Right. But the monthly mortgage that we pay is $2,800. So I just kind of wanted your advice on that. Just because the way that we were thinking of keeping the home, we're not. We're right where they're selling it or we're keeping it just because of long term equity in the future. But.

[Ken Coleman]

Well, let me ask a quick question. How did we get okay with you having a $2,800 mortgage on it, but only charging 2,400?

[Caller]

So it was a brand new construction. Right. And so the first year you pay taxes on the land. Second year you pay taxes on the, you know, the first full year of the property being built. Right. So then a tax is shot up from, I think it was around. They shot up about, geez, like $4800 just in last year. This was last year.

[Jade Warshaw]

How come you didn't raise the rent?

[Caller]

So we have a realtor that we're working with over there. Right. The realtor recommended because of the properties around in the community to lower the rent because the first year was essentially 2,500. So then it all kind of made sense at that point. We were doing out of pocket 50 bucks a month. Right. Then second year came around with the tenants. And then the realtor was saying to lower the rent just because all the properties around it, the rent went down. So then that's when the property taxes shot up to 5200 bucks, 5300 bucks. And that's when we went negative 400 something a month.

[Ken Coleman]

All right, so the question is, did you get into this house to make a couple hundred bucks a month or did you get into this house to make more than that?

[Caller]

We got into this house. Well, we moved over there because we liked the place. And then work called me back into the office in Miami and.

[Jade Warshaw]

And that's it. That's that. That's what I want to stop on. You did not buy this house as a rental property. You did not say, you know what, let's get into the rental game. Let's get into the landlord business. Let's go pick the perfect property for us to do that. You didn't say that you defaulted to this because it was like, well, we're moving. I guess we'll just kind of keep it. Do you see why that's not a great plan for real estate?

[Sponsor/Announcer]

Correct.

[Jade Warshaw]

Correct.

[Caller]

Yeah. Yeah.

[Ken Coleman]

So if you sell it now, are you underwater? Can you make money?

[Caller]

I will make about 15k on it.

[Ken Coleman]

I jump on it because I just read an article couple days ago. Tampa is one of the worst real estate markets in the country. Prices are dropping.

[Caller]

Yeah. Big time.

[Ken Coleman]

So I would get out now. Do you agree with that partner? I'd take the 15 and be happy indeed. Because this is a headache gone. And you walk away with no financial loss. And you get to live and tell about it.

[Jade Warshaw]

Yeah. The longer you wait, that money could dwindle. So I would definitely.

[Ken Coleman]

Yeah. Yeah.

[Caller]

And we actually just, you know, the worst part of the timing is we just. Not the worst part, but we just renewed the lease with the tenants, so we got, you know, 11 months to go.

[Sponsor/Announcer]

But.

[Jade Warshaw]

Okay.

[Caller]

Obviously, you know, with, you know, contingent upon the tenants moving out or so on and so on and so forth, you know, we can potentially sell a house. And, you know, just talking to my wife about it and we're young.

[Sponsor/Announcer]

Right.

[Caller]

I'm 30, she's 27 and 0. Credit card debts, no car payments.

[Jade Warshaw]

Good.

[Caller]

We have. We have seven months worth of savings. You know, there is a truck that I want to get rid of because that's like 580 bucks a month. Just don't need right now. Right. We make a really decent living for living in Miami. And I just. That house is kind of causing not headache in the marriage or anything like that. Just our sense of peace. Right.

[Jade Warshaw]

Yeah.

[Caller]

It's going to get out every month.

[Ken Coleman]

And that's.

[Caller]

Yeah, that's 400. Not including CDD fees, garbagement fees, ADT security.

[Jade Warshaw]

So you were just losing money hand over fist.

[Caller]

Exactly. Yeah. Yeah. Negative 730 is the exact amount every month.

[Jade Warshaw]

How long have you had this property and been renting it?

[Caller]

We were there. I've been. We had it. We've had it so far. Three years. We lived in it 10 months.

[Jade Warshaw]

So you've been. You've been losing $730 a month for three years.

[Caller]

$730 the last fiscal year, the last 12 months.

[Jade Warshaw]

Oh, my gosh.

[Caller]

Yeah. For 2020.

[Jade Warshaw]

I mean, do you see where there's no profit there? Because you're only going to make 15,000 for the sale. This. This the type of math you've got to be doing to understand what you're in the business for. Are you in it for, you know, making a long haul on the property? Are you trying to make something off the rents? There were just. There just wasn't a plan here. When you fail to plan, you plan to fail.

[Ken Coleman]

And I would roll my sleeves up with my Realtor, if I were you, and I would walk this whole lease thing out. 11 months. Do you have any options? I'm just. Because I'm gonna tell you something. The market in Tampa is going down. I don't know what it's going to look like six months from now or a year from now, but you got 11 months. And so I would want the full picture of what every option. Then can we be ready? And then what do we have to do if we have no options, Jade? And 11 months rolls around, what's our strategy? Right, So I would get in control. So we're going to list this thing at eight months. You know, just don't let this thing happen to you. Happen to this. And then one quick question, because I want to get it from a source, a Florida resident. What is the status of the. No property tax legislation or idea by DeSantis.

[Caller]

So that is still TBD. I know there's been a lot of hype around DeSantis wanting to go ahead and eliminate property taxes, but a lot of folks are saying, like, are they going to be able to fund schools?

[Jade Warshaw]

Right.

[Ken Coleman]

So it's not active.

[Caller]

It's Right.

[Ken Coleman]

You know, I get all that, but I was just wanting to know where. Is it active legislation or is it just him throwing it out there?

[Caller]

I mean, him throwing it out there. They are in the process of it, though.

[Jade Warshaw]

Not active yet.

[Caller]

Okay, there's not active yet, but a decision will be made soon.

[Ken Coleman]

All right.

[Jade Warshaw]

Yeah.

[Caller]

Yeah.

[Ken Coleman]

Well, listen, man, I wish. We. Wish we had better news for you. I would see what your options are in that contract, read the fine print, see what your options are. If you have no options, have a game plan so that hopefully we move this house pretty quickly upon being able to sell it based on the lease situation there, because you just don't want to be stuck with that. And, Jade, this is A great review. We have a lot of new people coming in all the time. This is a great way to kind of do a review of why do we tell people this story being example A, to not be long term landlords. I mean, excuse me, long distance.

[Jade Warshaw]

Long distance. Well, I feel like the first part is what we kind of highlighted, which is a lot of people get into that long distance landlord game. Not by thoughtful choice of this is where I'd like to buy a property and be a renter. It's, I used to live here, I got a job, I'm moving. Or maybe you're in the military and you're hopping around. So it's just kind of like this default. Well, this seems convenient. And then you're, you're far away. It's a pain in the butt if the person is not, you know, paying you're, you know, in this case, he wasn't, I mean, he was almost a state away. Tampa to Miami may as well be a state away, but it's very hard to manage things from long distance. And you did not pick a property based on mathematics, based on doing any sort of spread. You just kind of ended up that way. And nine times out of 10, those are the ones where they're causing the most amount of stress, they're causing the most amount of, you know, loss of, of money because they're not covering it. And so it's just gotta let it go. Simplify a simple, a simple life. Ken.

[Ken Coleman]

Yeah, and low risk, right?

[Jade Warshaw]

Low risk.

[Ken Coleman]

You know, you talk about the Florida real estate market, you know it got overheated.

[Jade Warshaw]

It sure did.

[Ken Coleman]

Before you buy something, you should be paying attention, talking to those grizzled real estate veterans who've been sold. They've been around. They, they may not look grizzled, but they got experience in float.

[Jade Warshaw]

In Florida, they're sun beaten.

[Ken Coleman]

Yeah, yeah, yeah, yeah. But they know, they've been around.

[Jade Warshaw]

Yeah.

[Ken Coleman]

They've seen real estate cycles. You gotta know this stuff so that you don't, you don't put yourself in a high risk situation because a lot of people go, well, I got the house, let me just rent it. Now I've just made my portfolio a reality and it's just not that simple.

[Sponsor/Announcer]

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[Ken Coleman]

This is a paid advertisement in MLS ID1591 in mlsconsumeraccess.org/al housing lender. Welcome back to the Ramsey show in the Fair Winds Credit Union studio alongside Jade Warshaw. I'm Ken Coleman. Glad you're with us. Isabel is joining us now from Wisconsin. Isabel, how are you today? And how can we help?

[Caller]

I'm doing all right today. Thank you for asking.

[Ken Coleman]

Good.

[Caller]

I. I guess I have a weird situation. I make $20,000 a year, and I work at a bar and restaurant. My boyfriend and I. Well, he owns it, but my rent is connected to that salary that I make. My vehicle is connected to that salary that I make. I feel like I'm kind of a hostage in this situation.

[Ken Coleman]

Sweetheart, I'm glad you said it so I didn't have to. This sounds like scary manipulation. $20,000, first of all, is below the poverty line. Let's start there.

[Caller]

Yeah, that's kind of what I thought.

[Ken Coleman]

And then after your rent is coming out of that and after your car payment is coming out of that. Is that right? He's paying for those two things.

[Caller]

He bought my car and I drive it. He maintains it within reason. I suppose I still have to do, like, the major stuff on it.

[Ken Coleman]

What kind of car did he buy you?

[Caller]

It's a 2014 Honda CRV.

[Ken Coleman]

So not. Not, you know, not a real luxury item here. How much did he spend on it? No, I know. I'm just trying to do the math here. How much did he spend for it?

[Caller]

He bought it. He bought it for $8,000.

[Ken Coleman]

Exactly. So he bought you an $8,000 car that comes out of the 20,000. So he goes, now all I have to do is pay her 12.

[Caller]

No, I still make my. My salary is 20,000. He bought me the car, and my rent is kind of included. Without having to pay for that salary of $20,000.

[Ken Coleman]

Okay, the way you worded it, I thought it was coming out of the 20. So you're making 20 period.

[Jade Warshaw]

But why.

[Caller]

That's it.

[Jade Warshaw]

Why are you. Why would you stay at. How old are you?

[Caller]

I'm 28. Why would you stay here in December?

[Jade Warshaw]

What's causing you to stay at a job that's paying you 20,000? That's not a living wage.

[Caller]

I feel like I'm barely making it by. I.

[Jade Warshaw]

Yes, what's causing you to stay there? Of course you're barely making it by. But what's causing you to stay there and not go for another job? Because you could. My point is, you could go to Target and make more or Walmart.

[Caller]

I don't have a target around me.

[Ken Coleman]

Oh, now, Isabelle, don't start making excuses. Answer the question. What is keeping you? Well, let me ask a back another backstory question. Are you living with him?

[Caller]

Sure. Yes.

[Ken Coleman]

Okay. Okay.

[Caller]

Yeah. We've been dating for three years.

[Ken Coleman]

Okay. When did the bar. When did the. Okay, hold on. When did the bar job happen? When did you start working for him?

[Caller]

About four and a half years ago.

[Ken Coleman]

What were you doing before that? For work?

[Caller]

I've. I've always been a kitchen person, and now I'm kitchen manager and I'm for his bar.

[Ken Coleman]

And is his bar. Is it struggling? Is he just scraping by as well? Or is it doing okay? Is it doing well? What do you know?

[Caller]

He makes $7,000 in a weekend.

[Ken Coleman]

Okay.

[Caller]

We. We don't talk about finances, to be honest.

[Jade Warshaw]

Okay.

[Ken Coleman]

And does he pay for all of your. He pays for everything except for a little bit of spending money that you have from the 20. Is he covering all your bills or are you covering.

[Caller]

No, I'm covering other things. I'm in debt. $3,500 because I was trying to help my mom because she was a single mother and so complicated, but.

[Ken Coleman]

Okay. Well, your whole situation is complicated. How old is he?

[Caller]

He just turned 40.

[Ken Coleman]

I had a sense of that. I'm not a relationship expert, nor am I going to try one, but I think this is a manipulative relationship, and I think that you think you can't do any better. You've been making $20,000 a year for four and a half years. I'm guessing three, four. Three years.

[Jade Warshaw]

What would happen if. Tell me honestly what would happen if today you said to him, hey, I'm not gonna work at the bar anymore. I'm not making enough money. I found another job and I'm gonna Take that job instead. What would happen?

[Caller]

Well, we've had that talk before and he would kick me out. I would no longer work there and I would have to find another job.

[Jade Warshaw]

Okay, so there it is.

[Ken Coleman]

Yeah, we got a weird.

[Jade Warshaw]

This is that right there. Isabel, I knew that that was the answer and I just wanted you to say it. Do you think that you can stay with somebody like that that doesn't want you to get ahead and be able to stand on your own two feet? Do you think it's healthy or safe for you to be with someone like that?

[Caller]

I mean, not entirely. I guess what I really am trying to do is work my way out of my debt and.

[Jade Warshaw]

But how can you not let you earn any money? He's controlling you.

[Ken Coleman]

Yeah, okay, now here's the answer, Isabelle. Here's the answer. The only way you work your out way you're out of debt and stay in this abusive relationship, because that's what this is, 100%, is you're working a part time job. Based on what you've told us.

[Caller]

I don't work a part time job on salary. I'm. I'm 90 hours a week.

[Jade Warshaw]

No, it doesn't matter. You're working 90 hours a week to make $20,000 a year.

[Ken Coleman]

That's what I'm saying. Isabel, I'm trying to help you understand there is no way to work out of this. And, and Jade and anybody on the Ramsey show is going to tell you there's always a way to work yourself out of it. But there's no way to work yourself out of it in this situation where you're working 90 hours a week. You are an indentured servant. Look it up. That's what this guy's got you turned into. You're basically working for your livelihood. Meaning he's just going to give me rent. He got me the $8,000 car. He's got you underneath his thumb. And there's no way for you to get out of this other than you break up with this guy.

[Jade Warshaw]

You have to.

[Ken Coleman]

And you go work. You go get a good job and you start over.

[Jade Warshaw]

Well, I wanna. I wanna flip the script on you in a couple of ways. What did you think we were gonna tell you if. Because you said, you know, I really need something. I'm gonna call these folks on the radio. What were you hoping we might tell you?

[Caller]

I guess I really didn't know.

[Ken Coleman]

Yeah, we're on your side, thinking it.

[Caller]

For a while and I. I guess I maybe just needed some reassurance.

[Jade Warshaw]

Listen, I'm going to tell you right now, we love you. We do. We want the best for you. You can't stay with this guy. No, you cannot. He's not going to let you get ahead. He's controlling you. And it's tough because he's 40 and you're 28 and you've been with him for three years. And it seems like he holds all the power and all the cards, because right now he does. But that doesn't mean that you can't go out and get yourself a job and get ahead. I think that this. It's like you're under a glass.

[Ken Coleman]

I gotta say this, Isabelle. You've been with him four and a half years. Did I hear that right?

[Caller]

Well, I've been working with him four and a half, but we've been working for three.

[Ken Coleman]

I'm sorry, but that puts you at about 25 years of age. And you've had to help your mom. You went into debt three grand to help your mom because she's a single mom. And my guess, there's this abuse that runs in your past. And I think you're terrified of becoming your mom. So this guy at 40 years of age, as manipulative as he is, um, he represents safety for you. That's what I think's going on. And I'm going to recommend that you maybe. Yeah, no, it is. It's exactly what's going on. And I want you to go to some friends and family that. That love you and ask them if you can stay with them. You get yourself a new job. Let's get on our feet financially. Go see a therapist. That's your homework assignment. But I think you gotta. You gotta break up with this guy. Or I need to take a break and you need to see yourself. You don't have to do a full breakup, but take a break. Let's. Let's leave. Go spend some time somewhere else and maybe find a job. Not maybe find a job where you can make some money. Let's see what life feels like on the other side of this. Because I think you've gotten pulled down. And if you've got any money that you can get a therapist with, go see a therapist and get a real professional opinion on this.

[Caller]

Hey, y'. All, you know I'm all about keeping.

[Jade Warshaw]

Your budget in check, especially during the holidays.

[Caller]

And that's why I always start my grocery shopping during the holidays. At Aldi.

[Jade Warshaw]

From fresh produce to holiday favorites and.

[Caller]

Charcuterie boards for parties, Aldi has it all.

[Jade Warshaw]

And at prices that will help Your family save big. Up to four.

[Caller]

$4,000 a year for a family of four. So do what I do for my family. Shop at Aldi first to save on groceries without sacrificing quality or holiday joy.

[Jade Warshaw]

Find a store near you@aldi us that's a L D. I dot us savings.

[Ken Coleman]

Based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

[Caller]

Foreign.

[Ken Coleman]

Hey, folks, if you're enjoying the show and it's helping you and you think it'll help others, would you help us help them? And you do that by liking, subscribing, following, sharing all of the buttons. You know how they are. And so whether that's podcast, YouTube. However, we'd love for you to share the show and that helps us spread the good word. Alice is up in Albuquerque, New Mexico. Alice, how can we help you today?

[Caller]

Hello. Thank you so much for taking my call. My question is, does it make more sense to contribute money to a spousal Roth IRA or continue doing what I'm doing, which is currently setting money aside in an emergency fund and other expected expenses such as vacation, maybe a future car purchase, et cetera. My husband's going to continue working for about another 10 months to 12 months.

[Jade Warshaw]

Okay, so this is in. This is you planning for retirement?

[Caller]

Yes.

[Jade Warshaw]

Okay, how old are you guys?

[Caller]

I'm 65. My husband is 64. I retired in 2015 to take care of my mother, and then I took care of my sister who had early onset Alzheimer's, and so I been out of the workforce for quite a while.

[Jade Warshaw]

Okay, and so tell me what you guys have so far in retirement.

[Caller]

Together, we have about 1.5 million in 401ks, 403bs Roths, and my husband has a PSP.

[Jade Warshaw]

Okay, and is there anything else? Tell me about your other assets. Do you own your own home? Do you still have a payment? Tell me about that.

[Caller]

Our home is paid off. Our vehicles are paid off. My car is a 2012, and I don't have to have a brand new car. That's not my thing. I'd rather not have a payment, but I know that I might have to purchase a car in the future, so that's one of the things that I plan on setting money aside for as well.

[Jade Warshaw]

Okay.

[Caller]

And otherwise we have minimal credit card debt and we pay groceries, utilities, cable, Internet, our phones, and that's pretty much it.

[Jade Warshaw]

Okay, got it. What's the homework worth? What's the home worth?

[Caller]

In our area, probably about 350,000.

[Jade Warshaw]

Okay, good. Now what's your husband work? You said he's working 10 to 12 more months. What's he earn?

[Caller]

He currently earns about 80,000 annually. And so we've worked really, really hard to pay down debt. And I've been doing the spousal Roth contributions and I've currently stopped. I don't always have the money to do that. But my thinking was, does it make more sense to contribute to the Roth since he's going to be off work in about 10 to 12 months when he retires, or do I just keep putting money away and what I do, and I know this is probably something that you're not going to agree with, but I have little envelopes, in other words, little buckets, and I put money aside for an emergency emergency fund. I currently have 10,500 set aside in the emergency fund.

[Jade Warshaw]

Okay.

[Caller]

And then if things get better in Israel, we, that would be kind of our dream vacation is to go to Israel.

[Jade Warshaw]

Okay.

[Caller]

And so, so for vacation funds.

[Jade Warshaw]

Okay. I, you know, I, I'm not mad at that. I'm guessing he's contribute, continuing to contribute on his end to a Roth IRA as well. And so the spousal, you're kind of like, do we still need it? I like the idea that you've been saving an emergency fund because you do need some liquid money. We would suggest six months of liquid money. It's just good to have there so that you're not having to pull, you know, things out of investment for emergencies and things like that. I'm not, my, my, my framework on this would be you need to be investing at least 15% of the income. That's kind of where we sit. If you're investing 15%, whether it's in Roth IRAs, spousal IRAs, 401ks, wherever you choose, everything else from there on. Yeah. If you want to save up some more for vacation, if you want to have a little, if it makes you feel comfortable to have a little bit more cash money, I'm not upset with that. You guys are doing really, really well. 1.5 million in retirement I paid for $350,000 home. I don't think that you can mess this up at this point with the, the couple of thousand dollars that you're talking about here.

[Ken Coleman]

Yeah, I agree.

[Caller]

Question, question for you. So the 1.5 million or so, I felt really comfortable with that. But for the last almost five years, things have gotten so much more expensive and I would like to leave a little inheritance for my kids. Okay.

[Jade Warshaw]

And let me explain that so that you'll understand it. So you've got 1.5 million here. Let's pretend that the interest on that is about 10, 10%, right? That's the compounding growth that's occurring. You could pull $150,000 a year from that and never touch the nest egg, essentially. Does that make sense? Which is more than what your husband earns now. He earns 80,000 a year.

[Caller]

Okay?

[Jade Warshaw]

So you'll have more than enough to continue to live, plus you both will receive Social Security, or at least he will. Do you see what I'm saying? So there's definitely. There's definitely plenty of wiggle room there. You will have plenty to leave to your heirs or anybody that you know is going to be a beneficiary on this.

[Caller]

Another question. So the money that I have in the little buckets I keep, it's not invested. I keep it at home in envelopes in a safe. And you might get mad at me there, but should I be putting that in a high yield savings account, like my emergency?

[Jade Warshaw]

That'd be great to do that. Now, I'm not going to lie to you. I keep cash. I have cash. I like having cash that I can get to. And I also keep cash, my main emergency fund, in a high yield savings account. But that's just because I'm a real Ken. You don't keep any cash in the house.

[Caller]

Mm. Mm.

[Jade Warshaw]

Oh, okay. You don't keep any cash in the safe?

[Ken Coleman]

Mm.

[Caller]

Mm.

[Jade Warshaw]

Okay.

[Ken Coleman]

You're asking.

[Jade Warshaw]

I'm just saying I like to be ready. Like, I got. I'm like on Jason Bourne. I've got the passports and the cash right there. I'm ready to go.

[Ken Coleman]

I just know there ain't much you can do about it. You have all that cash, and zombies will still get you. You. I don't worry about it.

[Jade Warshaw]

My point is, Alice, if, you know, I. The 10,000, I would definitely put that in a high yield savings. If it makes you feel better to have a little bit of cash on hand in the house, that's totally fine as well.

[Ken Coleman]

The other thing is, like, people come knock on my house, try to take stuff and go. You walk into my shoes. There's a decent amount of money there. But me, too.

[Caller]

There's no safe on radio or.

[Ken Coleman]

What's that?

[Caller]

I just said it live on radio.

[Jade Warshaw]

That's all right. They don't have your address.

[Ken Coleman]

It's okay. We haven't told them who you are. You're gonna be okay. But yet the answer is. The answer is yes. Your money Is safe. I feel it's very safe. Put it in, you know, a high yield savings. That's the best place. Why not get the money on.

[Jade Warshaw]

Yeah, it's got a little bit of.

[Ken Coleman]

Interest in those envelopes, you know, and so. Yeah, that's why we. That's why we.

[Jade Warshaw]

But I love how methodical you are, Alice. I just love how she's just been thoughtful about putting it in the envelope. Put it to the side, and you.

[Ken Coleman]

Guys are gonna be fine. And I love how you walked her through the real numbers there. You know, I think people need to know when you go, what's my number? In other words, what. What's the nest egg? The retirement nest egg? Where I feel like. And I love the exercise where you walk through and by the way, run the numbers.

[Jade Warshaw]

Yes.

[Ken Coleman]

Run it on a 10%. Run it on 8, run it on 6, run it on 4.

[Jade Warshaw]

Right. Run it on 10. And then you. And then take out 4% for inflation. Right. And then all of that is helpful.

[Ken Coleman]

Run those numbers so you can see what it is. You need, those adjustments. But you guys are going to be fine. I'm not worried about that at all. But you for real do the whole safe thing.

[Jade Warshaw]

Look at my face. Ken Coleman.

[Ken Coleman]

Okay. Well, I'm not surprised. I'm not surprised.

[Jade Warshaw]

I think that now, don't get me wrong, it's not to, it's not any, you know, I'm not going against the baby steps. I still do all the things that the baby steps say. It's just in addition to. I feel good knowing, you know, something goes down and you just need to get to. This is. You never hear me spin out like this, but something goes down, and you just need to get to the airport and get out of the country. Country.

[Ken Coleman]

Right.

[Jade Warshaw]

I'm gonna be ready to go.

[Ken Coleman]

You are ready. Yeah.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You've got, you've got a little. You got a little pack bag in the safe.

[Jade Warshaw]

There's no bag. It's just the documents in order.

[Ken Coleman]

Gosh. Oh, man.

[Jade Warshaw]

I just think about that when I go out of town, I text my brother and I'm like, here's where the will is. Here's where, like, I, I, I just prepare in that way.

[Ken Coleman]

Yeah. Well, now our whole family knows that if something were happening, Stacy and I travel and we, We've got a small spot for that. I get that. But in your scenario where you got to get out of town, you realize everyone else is at the, Is at the airport. So the only thing that cash does is, Is put you at the Front of the line for coffee cuz you're offering more money. It's a disaster by that point.

[Jade Warshaw]

Wrong.

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[Ken Coleman]

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[Caller]

Help. Hi. So I'm a realtor, so my commission actually goes through an LLC we just set up. But I have a savings account where I've been putting my salary in. But it's been really sloppy this past year. So I really wanted to kind of get clear. We're on baby step two. So how should I be using that salary account? Should I put in six months and dwindle it down and replenish it every quarter, or should I have a full year's salary in there before I started attacking the debt?

[Jade Warshaw]

Oh, I see. Okay. So are you the only. Is it just you or. You said you're married, right?

[Caller]

I am married, yeah.

[Jade Warshaw]

Okay. Does your husband work?

[Caller]

He does.

[Jade Warshaw]

Okay, what is. What do you bring in a year? And what does he bring in per year?

[Caller]

So this year I'm bringing in 130, and he's bringing in 40.

[Jade Warshaw]

Okay, so what does it cost? Cost on annual basis. And we can look at this monthly. Let's. Let's look at it monthly. What does it cost on a monthly basis to make your household run?

[Caller]

4,000.

[Jade Warshaw]

4,000. Okay, so what I would be doing is since you know that it sounds like you're. Whenever you get a big lump sum of money, you're throwing it in savings and you're just kind of filtering in your portion of whatever makes the household run every single month. Is that right?

[Caller]

Sort of. So all of my commission goes into the LLC checking account, and then I put in what I know I need to get paid for the next couple of months, which is $2,000 a month, and that goes into our personal account.

[Jade Warshaw]

Okay, and then you're trying to understand. Okay. With the rest of it, can I go ahead and start paying off debt or how much do I need to keep aside?

[Caller]

Correct.

[Jade Warshaw]

Yeah.

[Caller]

Like I should do, like six months and then replenish it.

[Ken Coleman]

Well, how about we come at it?

[Caller]

Or if I could do a year.

[Ken Coleman]

What if we come at it a different way?

[Caller]

Way.

[Ken Coleman]

How about you tell us how much you have in savings in. Or, excuse me, in the LLC account. Right now?

[Caller]

Right now we've got 13,000 in total.

[Ken Coleman]

Okay, and how much debt do you have? And listed out for Jade? Smallest to largest.

[Caller]

Cool. So smallest to largest. We've got five in school loans.

[Jade Warshaw]

Okay.

[Caller]

Seven in a motorcycle, 21 in car, and then 22 in credit card. Card.

[Ken Coleman]

Okay, a few more questions about that. What's that motorcycle worth if. If you or he were to sell that today?

[Caller]

Oh, he rides in an awful lot, so I don't know, it might be worth five.

[Ken Coleman]

Okay. You notice I. You notice I said if I get, I get. I get it. And it's such a small amount, you guys could knock that out so we don't have to get rid of it. What? Okay, so Jade, you've got a picture of the debt, right? Now, what do you have in the pipeline as far as home sales?

[Caller]

So I have two that are pending past their contingencies. That'll be about 13,000 this in the next 30 days. And then I also have five active listings, so looking at maybe 20 more thousand.

[Ken Coleman]

Okay.

[Jade Warshaw]

Okay.

[Ken Coleman]

That gives you a better picture.

[Jade Warshaw]

Yeah. You've got 13 coming and then maybe another 20,000 in active listings, and there's already 13 there. I probably. If your husband made a little bit more money, I might pull this number back. But if I were you, I'd want like two months there. Does that feel right?

[Caller]

Two months in the, in the account to know that I'll be okay?

[Ken Coleman]

Yeah. So instead of 13, you said 2,000amonth is what you pay yourself. So she's saying 4,000.

[Jade Warshaw]

Four or five.

[Ken Coleman]

Okay, leave five. Let's say five. And that gives you eight to put towards debt.

[Caller]

Debt.

[Ken Coleman]

That's what she's throwing out.

[Jade Warshaw]

Does that feel like. And then on a regular occurrence, that five, if it goes down, you're always replenishing it to where it's always five. You're, you're paying yourself your monthly amount. Plus there's always five in the contingency account. Does that feel good?

[Caller]

Okay, so more like an emergency account.

[Jade Warshaw]

Yeah, but I don't want it to be confused with your emergency fund because this really just is. It's kind of like if you have any other sole proprietor, you just want to make sure, hey, there's money coming in. I understand my, my income is very. Yeah. Fluctuated.

[Ken Coleman]

We would call this retained earnings in entree leadership land. Right. And, and so, but what we're also trying to do right now is we're trying to coach you up on what you can do with the 13 that's in there right now and make some headway. You've got a five thousand dollar student loan that you could knock out immediately.

[Jade Warshaw]

Done. And how much money would that free up in payment?

[Caller]

Oh, 50 bucks.

[Jade Warshaw]

Okay. It's still 50 bucks. 50 bucks is 50 bucks. Yeah, yeah. Which is great. And then the next month, my goal would be to knock out this motorcycle.

[Caller]

Yeah. Okay.

[Ken Coleman]

That's 12 grand over two months.

[Jade Warshaw]

Can I be honest? I'd sell the motorcycle.

[Ken Coleman]

Well, I was going that direction.

[Jade Warshaw]

I'd get the two. I'd take $2,000 so that you're not upside down and I'd sell it. That's what I would do.

[Ken Coleman]

But you said he rides it a lot. That's what the only reason I, you know what I do? I challenge him. Yeah, yeah. I Challenge him to go get a side hustle. What does he do, by the way, for $40,000 a year?

[Caller]

He. So we actually live in Anderson, which is like a smaller market, but he is in training to become an electrician, so he is going to skyrocket.

[Ken Coleman]

Okay, you know what?

[Jade Warshaw]

Keep it.

[Ken Coleman]

That's where I'm at. I. Yes, Joy. I mean, excuse me. Actually. Sorry, sorry, sorry. Ashley. I think he keeps it. And. And you guys go all in on this and knock this, knock this out. But I knocked the student loan out today. I'd cut a check for five grand as soon as I got off the phone.

[Jade Warshaw]

Yeah, that's going to feel.

[Ken Coleman]

It's going to leave eight in there, Jade, and it's gonna feel real good. Like that's a massive momentum.

[Jade Warshaw]

Yeah. And then put the other three on the motorcycle.

[Ken Coleman]

That cuts that in half, essentially.

[Jade Warshaw]

And then the next month. So that means in December, the whole bike will be paid off. And now you guys will be setting yourself up to work on the credit card debt. Now is it one credit card for 22,000 or is it littler ones?

[Caller]

No, it's. There's two to basically split in half.

[Jade Warshaw]

Okay, so. Okay, great. So, yeah, I, I would work on right after that. Yeah. Now you got 11,000. One $11,000 card and the next $11,000 card. You guys are going to go so fast like this.

[Ken Coleman]

I love it. I love it. How. What's your anticipated timeline for him to start making the money as an electrician?

[Caller]

I think he's due for a raise in six months, but about a year is. And we'll actually know for sure when he'll get in there.

[Ken Coleman]

I think you guys, if you really get after it, I mean, you're gonna be a long way down the line here on paying off this debt. By the time he comes into some really nice money, I think you're gonna.

[Jade Warshaw]

Be done by the end of the year.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Because I think you're killing it on real estate.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Yeah.

[Caller]

And I think the more not having it done now.

[Jade Warshaw]

That's all right. It takes a minute to get the bearings on this.

[Ken Coleman]

Listen, we're not playing armchair quarterback and looking in the back and looking in the past. Ashley, this. You guys are a great young couple. This debt is very manageable. I'm so proud of you. The thing that made me smile, by the way, Ashley, is when you told me what was in your pipeline. You know, great five houses sitting out there. Let's see if we can stack two or three more on top of that. That's a beautiful situation for you.

[Jade Warshaw]

And if he starts side hustling. Yeah. Mark my words, in 12 months, you're going to be out of debt. He's going to be, you know, increasing his income greatly. You guys are going to be be. It's gonna be looking good for you. Right?

[Caller]

Well, thank you guys so much.

[Ken Coleman]

Yeah, you get. You're in great shape. Head up, right? Super excited. We're gonna put you on the spot. Before we let you go. What are the chances, Ashley, that you cut a five thousand dollar check today to pay off that student loan?

[Caller]

102%.

[Jade Warshaw]

Whoa. How about that? That's what I'm talking about.

[Ken Coleman]

That's like a nice birdie play clap right there. I think that's fantastic.

[Jade Warshaw]

I love that.

[Ken Coleman]

You know what I love about her?

[Jade Warshaw]

Get it? Yeah.

[Ken Coleman]

She said 102%.

[Jade Warshaw]

That means it's happening.

[Ken Coleman]

Ken, I think she's cutting the check right now.

[Jade Warshaw]

That is. That's great.

[Ken Coleman]

Boy, that feels good, doesn't it? Describe for people from a. From a. From a person who, with your husband, you paid off half a million. What is it going to feel like to her? Describe the feeling for somebody who's yet to do it.

[Jade Warshaw]

Oh, boy. It's. It's like nothing else because it never comes back. It's a stress that never has the ability to come back in your life again.

[Ken Coleman]

It's deleted. Deleted from the deleted files.

[Jade Warshaw]

Yes. Yes. Evaporated. Men in Blacked.

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[Ken Coleman]

Attorney advertising Guardian Litigation Group LLP not available in Minnesota and Oregon. Results vary and no specific outcome is guaranteed. Debt settlement may negatively affect credit and not all CRED will negotiate or settle. Savings vary and may be taxable. Please review our website terms for more information. Today's question is sponsored by why Refi? If you've tried everything to fix your default private student loans and nothing's worked, why Refi can help. They'll build you custom fixed rate plans based on what you can actually afford. Learn [e-mail] Ramsey that's the letter y r e f y.com Ramsey it's not available in all states.

[Jade Warshaw]

Alrighty then. Today's question comes from Catherine with a C in California. She says, my husband and I make a combined income of over $250,000 a year. We have no debt other than our mortgage, which we're on track to pay off in two years. We follow the baby steps budget every month. We have college funds set up for our two daughters and are intentional with our money. Jade here's my dilemma. I love Christmas and for years we've only bought dollar store or thrifted decorations that don't last. I'd like to invest around a thousand dollars in quality Christmas decorations for our home that we can after year to build memories with our girls. My husband feels like this is frivolous and not aligned with our financial goals, but it's something very important to me. Jaden King how do I approach this conversation with him in a way that honors our financial goals but also makes room for meaningful spending? Ah, I'm just so mad that this is even a struggle. You guys have done so well with your money. You've been so intentional. This thousand dollars, that really is a one time expenditure because she's saying can I spend $1,000 one time? Get some quality stuff?

[Ken Coleman]

Yeah.

[Jade Warshaw]

This is not gonna derail anything that you're doing in your world.

[Ken Coleman]

No.

[Jade Warshaw]

You could put the thousand dollars out the window and let it blow away and it's not going to change anything in your world.

[Ken Coleman]

Well, I'd want to know. I wish she was on the phone because I want to know how much she spends every year that he's supposedly okay with. Which, by the way, he's not okay with. She's married to Ebenezer Scrooge on this deal. He doesn't care about Christmas. Racist. He just doesn't care.

[Jade Warshaw]

Yeah, right. Here's the thing. Here's the thing. Let's talk about this. Because you and I are both married, there are things that Sam Warshaw will get excited about spending money on that in my mind, it's like, this is so, like, unimportant. Or. I, I personally, it's not like.

[Ken Coleman]

I know. I know the story about his Halloween outfit.

[Jade Warshaw]

The man bought a Ninja Turtle costume.

[Ken Coleman]

Straight off the movie lot.

[Jade Warshaw]

Straight off the movie.

[Ken Coleman]

But he sold some stuff. We talked through it. He did it the right way. He.

[Jade Warshaw]

But my point is that is just part of being married is there's things.

[Ken Coleman]

That you gotta let it go get.

[Jade Warshaw]

Your spouse, like, ooh, because he's responsible.

[Ken Coleman]

About it, and this lady is responsible. So the point I was making is, let's say, what do you think she spends. What do you think she spends every year on the cheap stuff?

[Jade Warshaw]

Oh, at the dollar store, she's probably spending like 15, $20 just getting some little doodads and stuff.

[Ken Coleman]

I think she, you know, you got to sit down with him, go, babe, this is actually a very small amount of money in the grand scheme of what we do do. I'll bet you she spends about $100 to 200 bucks a year. So she goes, look, $1,000 for really nice stuff. It's going to get us five years worth of stuff. We don't have to spend much at all. You just got to speak the guy's language to one degree, but at the end of the day, you got to pull the wife card and go, hey, you know what? We're doing great.

[Jade Warshaw]

Yes.

[Ken Coleman]

We've suffered and sacrificed to be able to pay this house off in two years. Listen, Sparky. Yeah, I put my foot down.

[Jade Warshaw]

That's the part. Because I don't think she needs to spend a whole lot of time explaining why this isn't very much money. I think the guy knows math. Think he knows that this is not a lot of money.

[Ken Coleman]

He doesn't care.

[Jade Warshaw]

He. It's just not a value to him, but he needs to understand that it's valuable to her. Yes, yes.

[Ken Coleman]

Happy wife, happy life, man.

[Jade Warshaw]

You know, you got to turn the lights off at the end of the day, so let's make sure. Do you know what I'm saying? Certain battles aren't worth the fight.

[Ken Coleman]

Ken, I. You're talking to me. I just want people to know I'm giving out advice that I actually follow.

[Jade Warshaw]

Ken, say what's on your mind.

[Ken Coleman]

You know, I'm about ready to say it.

[Jade Warshaw]

I know what you're thinking.

[Ken Coleman]

Stacy has bought into the. What I call the great candy inflation. Inflation. And in our neighborhood some several years ago, we discovered some houses are giving out full size candy bars. I have a fundamental problem with that. I think that you. You're a teenager, you go buy your own full size candy bar. You don't get it. At my house, we're giving away free candy. You get the junior size. I just think it's too much luxury. These kids have no hardship in their life. I know I'm butt off my lawn. But guess what?

[Caller]

What?

[Ken Coleman]

She thinks it's okay. And guess what's happened the last three years. Papa sat back full size candy bars I'm handing out this year as I sat on my front lawn with the fire pit. And here I am handing out full size Milky Way and having a bad attitude the whole time.

[Jade Warshaw]

But what did you understand that allowed you to do it?

[Ken Coleman]

That it makes Stacy happy.

[Jade Warshaw]

Boom.

[Ken Coleman]

And so therefore it needs to happen.

[Jade Warshaw]

Boom.

[Ken Coleman]

And I can afford the full size candy bars. You could have thrown them a budget item.

[Jade Warshaw]

You could have thrown them in the bonfire.

[Ken Coleman]

I could have burned. I almost did. For principal's sake. I kid I ain't ever gonna throw a full size Milky Way away. By the way, I did a little Mr. Coleman tax.

[Jade Warshaw]

Did you?

[Ken Coleman]

Before the kids got there?

[Jade Warshaw]

Oh, always.

[Ken Coleman]

I had myself a Milky Way. You should have seen me sitting in the front, the whole thing waiting for the kids to show up. I went ahead and had myself a full Milky Way.

[Jade Warshaw]

Wow.

[Ken Coleman]

Underrated candy bar.

[Jade Warshaw]

It's okay. It's not my favorite.

[Ken Coleman]

Just saying. It's underrated.

[Jade Warshaw]

You and I know what the dealio is. We know about the Butterfinger and the Payday.

[Ken Coleman]

Butterfinger's the best candy bar in the world.

[Jade Warshaw]

World.

[Ken Coleman]

And I agree with you on that. Joy is up in St. Paul. Joy, you're never going to get that much of your life back as we talk about candy bars. But we're here for you now.

[Caller]

Fantastic. I was wondering if there's a Halloween version of Scrooge that we could call you. Ken.

[Ken Coleman]

Oh, good call. Yeah. Is there a grumpy Halloween movie character?

[Caller]

Yeah, I think they're all grumpy.

[Jade Warshaw]

I'm thinking Adam's family.

[Ken Coleman]

But you know what? Truth is, Joy, I've gotten past it and now I just go with the flow. And I. The kids go wow. When I hand them their full sized candy bar.

[Caller]

So, you know, so good for you. Okay.

[Ken Coleman]

How can we help you?

[Caller]

Fantastic. Okay. I am working a full time job right now that I sort of like and a part time job that I love. And I am burnt out and I need to make a change. And I've been doing. I've been doing this for about a year and I'm just, I'm over It So I think that my two options here are to number one, quit the part time gig that I love and just do the full time thing that's more stable that I don't really like. Or I'm pretty sure I'm gonna have a job offer come in at the end of this week for another part time thing that will be in the field that I love so I could do the two part time things interesting together.

[Ken Coleman]

Oh, this is pretty simple I think. Do both part time jobs pay the same more or less than the full time time?

[Caller]

Yeah, if I was just doing the full time job. The two part time jobs together is very comparable to what the full time thing is.

[Ken Coleman]

Okay. And if I heard you, you love both part time jobs.

[Caller]

I know that I love the one, the other one, you know, I haven't done it yet, so I'm not 100% sure.

[Ken Coleman]

But you know that. Okay. But you know that that's up to you to determine in the job interview. And I want to tell you, Joy, that the job interview is for you, not for them. So many people think that we're always trying to impress everybody else. Pick me, pick me, love me, hire me. And, and I think the job interview is more for you to go, do I want to be picked by you? And so it's certainly important in this situation that you don't take this second part time job unless you know that you know that you know that you got a good picture of what this thing's going to look like. And that's asking questions like describe this job every day and every week. How much does it change? When it changes, what's it look like? Another fun question to ask the interviewer is describe a year from now. If I'm crushing it in my annual and you're saying, joy, you crushed it. What did I do? People don't get asked those questions.

[Jade Warshaw]

That's a great question.

[Ken Coleman]

And you need to put it on them and just sit back and smile and keep asking those questions. Now let me ask you another question very quickly. Are you in the full time job because you just needed the income to pay off debt?

[Caller]

Oh, we don't have any debt. We're in baby steps five and six. I just, I. But I did need more income because we do have a mortgage and I knew I wanted the full time job because, you know, it's more stable. I've been looking for a full time job for three years and just kind of piecemealing together part time, 1099 contract stuff. So that's why I Took the full time job. All right.

[Ken Coleman]

But the point is, is you guys don't have to have the income. It's nice, but you don't have to have, have it or we have to have it. Yes or no?

[Caller]

No, we need, we need more than what the part time job can give me.

[Ken Coleman]

All right? So my point is I would go with the two part timers if, if you do what I tell you to do and you ascertain through the interview process that this is in fact a great part time job. Now I've got two part time jobs and I say sayonara. Out. I'm out. No longer doing the full time job that you don't love. It's very simple. Okay, we keep the income, but now we got more joy. Pun intended there. I did that on purpose. I couldn't help myself. You did a good job. Thank you. Yeah, yeah. You're a smart, smart lady. I think you know what to do here. So do your, do your due diligence and if the interview feels right, it's a good thing for you. Go for it. Welcome back to the Ramsey Show. Welcome to the show in the Fairwinds Credit Union studio alongside the fabulous Jade Warshaw. I'm Ken Coleman. Excited to be with you all. The phone number for you to jump in is 888-255-2225. Kelly is going to join us now from Syracuse, New York. Kelly, how can we help?

[Caller]

Hi, thank you so much for chatting with me. So I have kind of a loaded question with a complex thing, but I'll just give you the basics up front. I am 37. My husband is 35. We have two boys. One is almost one, one is two and a half. We have been working on baby steps. We've probably got about 80,000 or so left. And other than that we have no consumer debt. It is all either student loans or we owe my mother in law a little bit for helping with taxes. But just this last week I got diagnosed with brain cancer actually. And so this, I'm just trying to like get a grasp on like what, what should we prepare for? Right now we're on Medicaid and so a lot of our medical bills are covered but there's some fertility stuff and stuff that's not covered. And I feel like we're always kind of teetering on the are we going to qualify for Medicaid this year or not? And so just what, like where should we start? My husband and I, as far as like, Kelly, yes you are.

[Ken Coleman]

Can I just tell you the way you Started off this call, I would have never guessed that you were about to tell us that you are an inspiration. I am blown away by your spirit. So I wanted to say that. I wanted to say that our hearts are stunned for you. However, I'm inspired by you, and I think you're going to beat this. I am blown away. So first of all, just know that we're going to walk with you on this, and we're so sorry that you're facing this, the Medicaid issue. What is your income? What is your combined income or. Because that's the income. It's income based. Am I right?

[Jade Warshaw]

That's right.

[Caller]

Yes, it is. So my husband is an independent contractor, so he can write off quite a bit. And so that is, you know, he can write off trucks and tools, miles and all that stuff. So that, I think, has kind of kept us in that Medicaid.

[Ken Coleman]

So what is he. What does he do for a living?

[Caller]

He builds custom homes.

[Ken Coleman]

Easy. Actual home builder. The general contractor.

[Caller]

No, he's not the general contractor. He works for somebody.

[Ken Coleman]

Okay, and what is he. And I understand. Don't give me the fancy tax answer. What's his income in a year?

[Caller]

I want to say we probably take home five grand a month.

[Jade Warshaw]

Okay.

[Caller]

So what's that, 60?

[Ken Coleman]

Yeah. Well, that's net 60. And it sounds to me like the Medicaid. You really need the Medicaid. But at the same time, I never want somebody to stay in an income bracket just to get government benefits.

[Caller]

Totally. No, we know that. We don't want to do that either.

[Jade Warshaw]

Can you tell us about. And I'm not trying to get too far into it, but with your cancer diagnosis, what are they saying? Is this something that they can go in and there's a surgery? Is this something that's ongoing? Do we not know what the future looks like?

[Caller]

So this was literally Friday. We have like six appointments in the next two weeks coming up before Thanksgiving. We're meeting with, you know, all kinds of doctors. And, you know.

[Jade Warshaw]

So you don't know yet.

[Caller]

All of the people you. Yeah, we don't know. The understanding that we have so far is that it's not in the grand greatest spot, but surgery could still be an issue. But there's probably going to be some type of treatment. We just don't know exactly what that is yet.

[Ken Coleman]

Okay, well, high level. Here's what we would tell you. That right now we're pressing pause.

[Jade Warshaw]

Yes.

[Ken Coleman]

On the baby steps. And we're stacking cash. So this is what we would tell someone if they knew a baby was on the way and we have unknown expenses. So it certainly falls in that category. So you press pause. Do you know off the top of your head how much you've been putting towards debt on month?

[Caller]

I want to say so we are in kind of a lucky, I guess I'm going to say lucky situation right now. Is that lucky and bad? We moved in to my mother in law's house to take care of her who has a version of Parkinson's. So add that on top of this.

[Ken Coleman]

Wow.

[Caller]

So we are currently, we have a house that we have good friends who are just renting straight from us.

[Ken Coleman]

And you're not paying for your current living. You're not paying the mother in law. Correct?

[Jade Warshaw]

Correct.

[Caller]

We are not paying for her. We're not.

[Ken Coleman]

So that's great news. But I want to come back to, I want to come back to the reality of where we stand as a Friday hit us. What were we putting towards baby step two total. What were we putting in payments?

[Caller]

2000Ish.

[Jade Warshaw]

Great. Yeah. So that's the idea. The idea here is we're stacking up as much cash as we can, keep that same intensity that you were and put that money aside. Because the long and the short end of it is your husband may be missing days of work. There's going to be days of takeout, there's going to be you possibly hiring a cleaning service. There's going to be needing other help with the mother in law since you, you guys may not be able to help in the same ways that you were. Right. There is, there's a lot of, and I don't say this in the way that you're a burden, but there's a lot of inconvenience coming this way because you guys must deal with this. And so having the extra money set aside to where it's not a financial problem or struggle is going to give you guys so, so much peace while you're busy getting well and you know, recovering from this. And so that, that Ken is exactly right.

[Caller]

Right. So as part of that like it, there's a couple of like small questions. He has a truck that may be worth 20,000. I'm not sure if it's quite that much. We do own our house. If we sold it, we could maybe walk away with 50,000. And so as far as those two are those things we should consider selling? Well, what would he wait to see all that happens?

[Ken Coleman]

I would definitely hold on the house.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Don't do anything else. The truck though, does he. What, What Would he make if he sold it for 20, what would he make on it?

[Caller]

We paid. We paid it off so we could walk away with 20, but we need to find something.

[Ken Coleman]

Oh, I see what you're saying.

[Jade Warshaw]

I wouldn't. No, I. Nothing's on fire yet. Yes. You guys have the debt, you're covering the minimum payments. No problem. You have the $2,000 of margin. I get get wanting to really go hard at this, but let's. I mean, like you said, this is still so early. Let's go through the next series of appointments that you have coming up. Let's get a little bit more information and, and you can call us back too, Kelly, if you, as a matter of fact, do.

[Ken Coleman]

Yeah, as this goes, call us back.

[Caller]

Okay.

[Jade Warshaw]

And that way we can help you keep learning.

[Ken Coleman]

All right, we only have about 50 seconds. Hit us super fast.

[Caller]

That's fine.

[Ken Coleman]

Go ahead.

[Caller]

We owe my mother in law about $5,500. She's a little bit salty for paying for some of our taxes. Should we work on paying that back as a minimum payment?

[Jade Warshaw]

No, it's storm mode. And you're doing her. This is the same one that you've been taking care of, I think so. You're doing her a solid. She did you a solid right now. Let's call it even.

[Ken Coleman]

That's exactly right. Hold, hold, hold. Everything we're focused on is taking care of you, doing what the doctors tell you. Fight this thing. And I'm going to tell you something, Kelly, your spirit is going to serve you so well. Keep that chin up. I'm so blown away by your spirit. What a phenomenal lady you are. We're praying for you, Kelly.

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[Ken Coleman]

All right, let's go to Richmond, Virginia. Jason is there. Jason, how you do? Can we help?

[Caller]

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

[Sponsor/Announcer]

Sure.

[Caller]

My dad owns a small electrician business and he wants to buy a $90,000 truck for his business so he can use it as a tax write off.

[Ken Coleman]

Sure, I hear that all the time.

[Caller]

He's never been averse to going into debt. Okay, that's, that's good to know. So he's never been adverse to going into debt and he thinks that if he gets this truck, he will not have to pay taxes to the government and he'll be able to take that money. Money and just put it into a truck that eventually he'll keep.

[Ken Coleman]

Right.

[Caller]

He, he owes from last year in his taxes, but I think that's the result of him making a little bit more than he thought. It wasn't like, like he was not paying or anything.

[Jade Warshaw]

Right.

[Caller]

So he, he owes and he's expressed that he doesn't even need the truck. He just doesn't want to pay the taxes 100%.

[Ken Coleman]

Yeah, I've heard this before. We've all heard this before. And it's such a, it's such a weird mental trade off where people go, wait a second, I'm going to spend money, my money in order to pay less taxes. And we think that's some sort of a good deal. And I can't even imagine what a payment is on a $90,000 truck.

[Jade Warshaw]

Yeah. Because he's not, he's going into debt for it. Correct?

[Caller]

Correct.

[Ken Coleman]

Yeah. So you got to help him, dad. You're going to spend. I'm going to guess it's 800, 900, maybe over $1,000 a month. I have no idea what he's going to put down. That's a world that I don't even know. So I don't even know how estimate, but it's going to be a big chunk that he doesn't even need. So you got to kind of go, dad, you just told me you didn't need the truck. That means you don't need the 900amonth payment. And you're all, you're doing all of this because you like the way it makes you feel because you're paying less in taxes. It's just such a weird financial trade off. And it never makes sense when you get it all out on paper. Yeah, but in your head with no one else pushing you on it, it seems to make a lot of sense. Jade, you've heard this more than I Have you've coached people through this?

[Jade Warshaw]

I mean back in the day, you know, when my mother in law did our taxes, she was telling us to do the same thing. You got this money sitting in the business, you need to go do this, you know, spend it. Well, my bigger question is before we even get into all the odds and ends, will your dad listen to you? That's the real question. If you tell him, hey, dad had this. Listen, going into debt to avoid a couple thousand dollars on taxes is not the move. What would he even say to you?

[Caller]

Yeah, I mean we've talked about it and he, I think he takes my opinion into consideration. What's the numbers by that? I mean like.

[Jade Warshaw]

Oh, sorry, did he tell, when, when you told him him, when he told you the plan and you spoke back to him, what were the actual numbers? How much is he going to save specifically? That's what I want to know. And does he even know?

[Caller]

Right? Yeah, yeah. And that's like something that like I have a computer science background, I'm pretty good with numbers. What I'm not good with is the tax code. So that's really like what I've been having a hard time figuring out what is deductible so that I could give him a, like a factual number of how much you would save.

[Jade Warshaw]

It's not going to be over $90,000, I can tell you that. That's the point. The point is he's going to put $90,000 on his name. He's going to add that in the plus category on his side. And I can guarantee you the savings is not going to be as such. That alone does that make, I mean I don't need to tell you that, but do you see what I'm saying?

[Caller]

Yeah, yeah, I guess what he's. Yeah, I guess it's like with the tax savings it could be around 20 to 30 grand that he saves. And so like he'd still have like a $90,000 truck that he paid 60 to 70 for. So I guess that is like a huge luxury. Like you don't need that.

[Jade Warshaw]

So why would he have only paid 60 to 70 for the truck? He's paying 90,000 for the truck truck.

[Caller]

Right. I just seem like if he, like I don't and I don't know these.

[Jade Warshaw]

Oh, you're saying after the savings, after the taxes.

[Caller]

Yeah, yeah.

[Jade Warshaw]

No point of it. No part of that makes sense. He's, he's spending money, but he's not making any money per se. Cuz he didn't even need the Item to begin with. That's the, that's the equivalent of me just being, going to the store and being like, well, I bought this thing, it was on sale. Usually it's this. But it's 50% off. So I just got it for 50% off, but it's like, yeah, but you still spent $60,000. That's essentially what he's doing is he's saying, I can get a truck for 30,000 for, for 30% off. No, I don't need a truck, but I'll just get one anyway. That's the equivalent. Maybe if you explain it to him like that, it'll help him understand, but I have a feeling he might do it anyway.

[Ken Coleman]

I think so too. He can punch in the numbers. I just did a bit little. I mean, this thing is all you got. Well, first of all, if it's, if it, if it qualifies as many full size pickups do, it's the GVWR, over £6,000. So if it's over £6,000, you could potentially write off the entire $90,000. But it still doesn't qualify in something we'd recommend because he's going into debt for it.

[Jade Warshaw]

Right.

[Ken Coleman]

Do you know what I mean? If he's flush with cash and he's just, you know, but going into debt for a tax deduction. But then there's also scenarios where he might only be able to write off, you know, section 179 deduction limit for 20, 25. He might only be able to write off 31,000. So he needs to get with a tax pro.

[Jade Warshaw]

Yeah. Find out more about it. If there was a situation where he was paying cash. Yeah.

[Ken Coleman]

If you're paying cash, sit with a tax pro. But if you're going into debt, this makes zero sense.

[Jade Warshaw]

Agree. I would agree to that. To that. I would agree to that. All right. Jason, I wish, I wish it were different. You, you've got your work cut out for you.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Unfortunately, it's not your life.

[Ken Coleman]

Yeah, yeah, but I mean, run the numbers. If you'll, if he'll listen to you, run the numbers and show him on paper. Right. And just walk him through it and go. And, and you, by the way, you got to make it simple. So you're going to pay this much over the life of the loan. Okay. You're going to pay this much per month.

[Caller]

Month.

[Jade Warshaw]

Yep. To get this savings all.

[Ken Coleman]

To get this. And you already owe the federal government taxes. It's got to be super simple. You can't debate. Emotionally, you can't say things like this makes no sense. The Ramsey people say this, none of that's going to work. It's got to be real numbers. And even then, to your point, Jade, somebody goes, you know, I'm going to do it anyway.

[Jade Warshaw]

I mean, we've all been guilty of going to the store. We didn't plan on getting anything, but we see that, that it's 40% off and we go, well, that's a good deal. And I, you know, I haven't put anything on a credit card in, in over a decade, but plenty of us would swipe a credit card to get the thing that we don't need simply because it's 40% off. That's essentially what's going on here.

[Ken Coleman]

Yeah. And we do it. Even if it's not Deb, if it's debt, I mean, yeah, I, I, I'll buy stuff sometimes that I walk by and I go, well, that looks, that looks nice.

[Jade Warshaw]

Right?

[Ken Coleman]

And then I see the deal on, I go, well, that feels nice.

[Jade Warshaw]

Yeah.

[Ken Coleman]

I don't need it.

[Jade Warshaw]

It, yeah. But the point is, there's levels of how, how irresponsible that looks. It's one thing if you had cash. It's one thing if you needed the thing. You found it on sale, you paid cash. Great. You got the savings. Next level is I didn't need the thing, but I did spend my own money and I paid cash for it. That's debatable.

[Ken Coleman]

It's debatable.

[Jade Warshaw]

Then the third tier is I didn't need the thing. It was on sale, I bought it. And I bought it on borrowed money. That's when we're getting into Dumbo territory.

[Ken Coleman]

And by the way, this age old argument that we've heard on the show a million times, it's all rationalization. So I want people to understand that what's happening here with Jason's dad is it's rationalization. I don't need the truck, probably don't even want it. But it might be a fun toy. But I can justify it if there's a good cause attached to it. So we don't even run the math. We don't even think of the logic. You say the word taxes, it's a good cause, right? Because people hate getting taxed taxes. You feel like you're sticking it to the government.

[Jade Warshaw]

Right.

[Ken Coleman]

And you're really not.

[Jade Warshaw]

Right. You know what I mean?

[Ken Coleman]

And here's one for you. What are the, what's the tax. What are the taxes on a ninety thousand dollar truck, Jay?

[Jade Warshaw]

That's what I'm saying you're paying taxes. Yes. Yes.

[Ken Coleman]

So I hate to be like sticking it to you over there, pops, but you know you're paying taxes on that car as opposed to just holding on to that cash.

[Jade Warshaw]

Right? And can we talk about that for a second?

[Ken Coleman]

How about getting current with your current tax bill?

[Jade Warshaw]

I love that, love that idea. That's f fantastic.

[Ken Coleman]

Item one, Jason's dad. Let's go ahead and get current on what we owe the irs. Oh, last time I checked, they are not fun to deal with.

[Caller]

Sam. Foreign.

[Jade Warshaw]

S Our Black Friday sale is live. So if you're already feeling the pressure.

[Caller]

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[Jade Warshaw]

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[Caller]

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[Jade Warshaw]

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[Caller]

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[Ken Coleman]

All right, question for you folks. Do you ever feel like you're doing everything right with your money, but you're still not getting anywhere? Well, if that's you, you're not alone. Maybe you've made the changes and had a few wins or something. Still feels off. It's not because you failed. It's because money isn't just math. It's emotional. It's exactly why Jade Warshaw wrote her new book, what no One Tells yous About Money. It's the very first Ramsey book that takes an honest deep dive at the looking at the emotional side of money. And it's going to give you practical tools to make progress for good. You can pre order it now for the fabulous price of $24.99. And when you do that, you get over $100 in free bonus items including the enhanced audiobook, early access to the ebook, instant access to the exclusive video where Jade teaches you. It's entitled your financial checkup. And then exclusive 3 week online book club. Plus live Q& A with Jade. So how do you get all that?

[Jade Warshaw]

Pre order?

[Ken Coleman]

Yeah, pre order [e-mail] that's ramseysolutions.com store. Gotta give you a quick word on it, Dave. Why should people buy this?

[Jade Warshaw]

Because Dave gave you a plan for your money and now I'm giving you a plan for you the part that's causing you to not work. The plan for your money. That's it.

[Ken Coleman]

Okay, I like it. There it is, folks.

[Jade Warshaw]

It's a plan. It's a proven plan. Just like. Yeah, the money proven plan. This is a proven plan for your motions. Boom. Done.

[Sponsor/Announcer]

Yeah.

[Ken Coleman]

Ramseysolutions.com store go get it. Let's go to Susan who is in New York City. Susan, how can we help?

[Caller]

Yes, hi, thank you for taking my call.

[Ken Coleman]

Sure.

[Caller]

So I'm a 69 year old divorced woman that has four adult children in their 20s. I own a home worth about 780,000 with about a $380,000 mortgage left on on it. I have only about five, about $5,000 in credit card payments that I, you know, I have left. My question is, is that I would like to build a little detached mini house. I guess a small tiny house for me to live in off the side of my house which I can do as like a senior living situation. And then I want to rent out my 3 bedroom 2 bath house for $500 and I haven't made an apartment also downstairs for another 2,000 that I could rent out and then I would live in my tiny house. How do you feel about doing this for my end of life retirement plan?

[Ken Coleman]

I don't like it.

[Jade Warshaw]

I don't like it either.

[Caller]

Why?

[Jade Warshaw]

Because it's a requiring you to go into more debt in order to do it. That's thing one and it's requiring you to be a landlord in to order old an older age. Because it's like you said this.

[Caller]

Yeah, I'm a contract. I've been a contractor though so you know that, that part is, is easy for me.

[Jade Warshaw]

What do you mean?

[Caller]

Like I'm, I'm a general contractor.

[Jade Warshaw]

Okay. How old are you?

[Caller]

I'm 69.

[Jade Warshaw]

69. Okay.

[Caller]

Contractor for 30 years.

[Ken Coleman]

Yeah, yeah. But, but, but to Jade's point, this is not a know how you know how to do stuff. Totally impressive. It's just a function of. Is that something that you want to lock into? What, what happens when you can't physically do it? It's not to know how you've got the knowledge but as you age.

[Caller]

Yeah, I would get it then I would have. If something came up then I would have to get help of course.

[Ken Coleman]

What are the numbers? First of all, we're never going to tell you to borrow money. So the answer is no to borrowing money to build a tidy home you save up and pay cash for for it after you've walked the baby steps out, which we teach. And you already have $5,000 in credit card and Jade can walk you through that in a second. But I just want to know for the rest of the Numbers. If you rent out your home, plus the bedroom in the basement or whatever, and I think you gave us about $6,500 a month in rent that you believe you could get. Did I get those numbers right?

[Caller]

That's correct.

[Ken Coleman]

What, what do you owe on the home? So 6,500 is what you're taking in. What do you owe every month?

[Caller]

About 20. About 2,800.

[Jade Warshaw]

So the mortgage is 2,800. Can I just ask a simple. Because there's a solution here that I'm just wondering about. Why wouldn't you. The mortgage is 2,800amonth. Why wouldn't you stay in the three bedroom, two bathroom part and just rent the apartment below?

[Caller]

Oh, that's just not going to give me enough. And it's not just not going to give me enough money.

[Jade Warshaw]

Okay, so let's solve. Let's solve a little bit more of that because then you'd be paying $800 on month for a mortgage, which I don't think you're going to live anywhere cheaper than that. No.

[Ken Coleman]

That's a fantastic number.

[Jade Warshaw]

So let's talk about this. So you've got this house. I'm going to hold it to the side for now. It's worth 780. You said you owe 380, is that correct?

[Caller]

Yes.

[Jade Warshaw]

Okay, so you've got some nice equity there. You've got only. The only debt in your Name is the 5000 in credit cards. Is that correct?

[Caller]

Yes. Yes.

[Jade Warshaw]

Okay. Is there any money, Is there any other debt anywhere?

[Caller]

No.

[Jade Warshaw]

Is there any other money anywhere?

[Caller]

No.

[Jade Warshaw]

Okay.

[Ken Coleman]

You have no savings.

[Caller]

No savings.

[Jade Warshaw]

And what are you earning right now? Because you said you're a contractor.

[Caller]

I would say roughly only between, say, 50 to 60,000.

[Jade Warshaw]

Okay. About $60,000 a month and.

[Ken Coleman]

No, no, A year.

[Jade Warshaw]

Oh, yeah, I'm sorry, You're right. Year. And what's your Social Security?

[Caller]

Very little. 800. Nothing.

[Jade Warshaw]

800. Okay. So that's nothing there.

[Ken Coleman]

And you have no retirement accounts at all?

[Jade Warshaw]

Nothing. So.

[Caller]

Wow.

[Jade Warshaw]

I. I think for you. I didn't want to say this because I was hoping that there was a way to get to it. How? I mean, I can ask realistically, how many more years you plan to work?

[Caller]

Probably at least say 8 to 10.

[Jade Warshaw]

8 to 10. We could do something with that.

[Ken Coleman]

Yeah, we got to. We got to pay this credit card off.

[Jade Warshaw]

We're going to do that, like immediately. And then from here on we've just got to start stockpiling. We've got to start stockpiling retirement. That's what you've got to do. Because if you got, if you can work for 10 more years, we can turn this around a little bit for you and for go selling the house as long as possible. And that would be my plan. Plan would be for 10 years I'm going to save as much of my income as I possibly can. I'm going to rent out this lower apartment and then I'm going to look up and in 10 years I'm going to reevaluate can I keep this house and can I live off of what I've stockpiled here or do I need to sell this house? And by then, hopefully it's grown in value a couple hundred thousand dollars more.

[Caller]

Okay. So my ultimate goal is to keep my house for my family, my kids, you know, so this is the only way that I could think that without, you know, that, that that would work. Well, I appreciate the equity of that, of the house for them to, you know, they're not going to, it's going to be very difficult having four children that are, you know, in their 20s to buy a house these days. And so really that's, that's why I was thinking that this, this plan would be something that would, you know, possibly enable that to happen.

[Ken Coleman]

Well, but Jade's. Did you understand Jade's plan? Jade's plan allows you to keep the house?

[Jade Warshaw]

Yeah, because if you think, let's run some, let's run some real numbers here for you a minute. Let's say right now, what are you making? Around 4,100 bucks a month.

[Caller]

Roughly. Yeah.

[Jade Warshaw]

Okay, so let's say you rent down the, rent out the downstairs apartment. So you're paying $800 a month in mortgage. Let's say you picked up some other work somehow, some other things that you could bring in some money. If you could get to the point where you're putting away $2000 or $1500 a month into retirement in 10 years, that's $400,000 dollars. That ain't bad to have that at 79 years old. And you could draw some off that, right? And suddenly that's not looking so bad.

[Caller]

When you say draw, you say draw some in what way?

[Jade Warshaw]

Well, I'd wanna, I'd want to see if, if there's any way that you can for sure off the growth for, so maybe 10% and work with the smartvestor pro to see, say, what is this? How long is this going to last me? What can I take from this to where I can take from this until I'm 85 or what have you. 95. And I'd work with a smart fester pro to get that number. And then that's buying you time of not having to sell this house.

[Ken Coleman]

That's right.

[Jade Warshaw]

Because if you can live off that nest egg, that that's another day that you get to keep this house for your family.

[Caller]

Yeah, I did that.

[Jade Warshaw]

You see what I'm saying?

[Caller]

My main goal. Yeah, no, that's my main goal.

[Ken Coleman]

Or, or listen, here's an alt and we're trying to get you some retirement income of which you have have none. Okay, but if you don't decide, if you decide not to do that, go with your plan. I would at least wait and pay off your credit card debt and I'd save up the money for the tiny house. If you're going to go your route, don't go into debt is my point. I love Jade's route. It's the route. We got to think about your long term while you're healthy because your Social.

[Jade Warshaw]

Security is going to pay for the rent, so you could easily live off 2. Invest 2. That's what I would do all day and not go into more debt.

[Caller]

Sam. Foreign.

[Ken Coleman]

Hey, George. Camel here. So you're thinking about buying or selling your home? It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in depth video content course hosted by yours truly, what's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com realestate that's ramseysolutions.com realestate. Our scripture of the day comes from Luke 11. Nine verses. Excuse me, verses nine and ten. So I say to you, ask and it will be given. You seek and you will find. Knock and the door will be open to you. For everyone who asks receives. The one who seeks, finds. And to the one who knocks, the door will be open. Our quote of the day from Ronald Reagan. We can't help everyone, but everyone can help someone.

[Jade Warshaw]

One. All right.

[Ken Coleman]

Sadie is up in Grand Rapids, Michigan. Sadie, how can we help?

[Caller]

Hey, so my question today is should my husband and I pull out our retirement to pay off the last of our consumer debt?

[Ken Coleman]

No.

[Caller]

Okay, so we're adding.

[Jade Warshaw]

I'm just kidding.

[Caller]

We paid off $12,000 of credit card debt from selling property, and we have 39,000 left on a vehicle, and that is our only vehicle. And so we were thinking, you know, to get out of debt right now and to be at a better point, should we pull that out.

[Ken Coleman]

So do you understand? And if it's, if you don't, it's okay. We'll explain. Do you understand why we both said no in unison?

[Caller]

I believe so.

[Ken Coleman]

Tell us.

[Caller]

Explain.

[Ken Coleman]

Well, no, you tell us. It's always better if you get it without us having to explain it. Why do you think we said no?

[Caller]

Well, I mean, it's already, it's already invested, it's already in the works, and you have to pay penalties as well as taxes.

[Ken Coleman]

You got it. You got it. And can I just say, there's no shame in your game. We're not judging you. I love that you've had it. Yeah, and this is all a result of having it.

[Jade Warshaw]

It's expensive.

[Ken Coleman]

We want to pay it off today. Yes, and, and, and, and, and we get that. And we've both been there before. But, but you guys have done so much. How much money have you paid off in debt to this point.

[Caller]

Roughly 18,000.

[Ken Coleman]

Okay. And you did it in one fell swoop with the land sale that.

[Caller]

Was on the vehicle already, so.

[Ken Coleman]

All right, we lost you.

[Caller]

Are you there?

[Ken Coleman]

Yeah, well, we are. We're not sure. You were on that one. We couldn't hear you.

[Caller]

I'm here. So we paid off 12,000 on the property and roughly 8,6000 on the vehicle already.

[Jade Warshaw]

Good.

[Ken Coleman]

Okay.

[Jade Warshaw]

And what's your incomes together?

[Caller]

So I don't work. I'm a stay at home mom, and my husband makes about 60,000 before taxes.

[Ken Coleman]

All right, tell us about the $39,000 car. What is it worth if we were to sell it? Private sale.

[Caller]

So we're underwater roughly 10,000 on it right now.

[Ken Coleman]

Okay, well, that's the other reason why you wanted to dip in to the retirement. That feels even worse when somebody's committed to something.

[Jade Warshaw]

So if I were in your shoes, what would happen? I mean, if you really wanted to get out of this fast, I'm not saying you have to do this, but if you really wanted to get out of it fast, you could say, okay, we're gonna save up a quick 10,000 maybe, and then get a loan for the other 10,000. So you get out of the car, and then you have 10,000 to pay for a cash car. So now you have $10,000 of debt plus a $10,000 cash car. How quickly could you save up 10k?

[Caller]

I mean, probably within 10 months. 12 months.

[Ken Coleman]

12 months to save up $10,000.

[Jade Warshaw]

I mean, with you guys side hustling, he picks up extra work. You're working at night, you're doing something from home. I'm talking about with balls to the wall. How, how quickly could you do it?

[Caller]

Aggressively, probably six months.

[Jade Warshaw]

Okay. This is I as, as excited as you were when you first called about getting rid of this and going to any experience extent, even, you know, pulling out retirement. I want that same energy on the side hustle to get the actual cash to do it because you guys can do this. And again, this is a suggestion because I thought you were super, super excited to get out of debt. If you think you can pay off the 40,000 here quickly, it's going to take the same sacrifice. So it's just how quickly do you want to do it? Because if you have 40,000, that's going to be that much longer that you're going to be in that, that frame of mind of we're doing whatever we have to take Beans and rice. Rice and beans. Right. And that's not necessarily fun. So I was just trying to shorten it for you.

[Caller]

And that's kind of where we're at. We're only positive $600 a month. So we're putting that towards it. And then I'm working on getting a part time job. Good to work from home to help with that. So we'll be hopefully $1,100 positive a month and that's with nothing extra. So.

[Jade Warshaw]

Great, great. And, and your husband, he needs to kick it into high gear too. And when I can, when we say scorched earth, high intensity. Yeah. We really mean it, Sadie. Like this is, yeah, this is, I, I, I kiss my husband in the morning and I might not see him until we're both sleep at night kind of thing.

[Ken Coleman]

Yeah, I mean we've, we've had so many debt free screams. You may have heard them on the show where people are working crazy hours and you know, just instead of the crazy hours hours, let's just throw a number out there. All right, so let's say you guys generated an additional three grand a month and all three grand of it went to the car. We're out in a year now. I always like to oversimplify, but I don't think that's truly oversimplification. I'm just going, I'm giving you a.

[Jade Warshaw]

Number Then you work backwards and then.

[Ken Coleman]

You start going, well, if I got to work this many hours to get there, but it's like, what do we have to do? You and your hubs, through selling more stuff and working like crazy, can we generate three grand a month that we would put on the car? And in that case, we're out of it in 12 months and we got a nice car. I would go that route if it were me.

[Caller]

Okay.

[Ken Coleman]

And I'll tell you why. And I want Jade's take on this, but I've heard Dave say this. I've been. Been on the show a day before. And he'll say something to the effect of, I like you paying this car off so that you get this whole debt payoff with large swaths of selling something here and there. While we fundamentally don't care, you don't, you don't feel it as much as when you're hustling.

[Jade Warshaw]

If the, if it was a little cheaper, I might say that. But you know, you guys making 60 and having a $40,000 car, it's too much. Car. It's too much.

[Ken Coleman]

No question.

[Jade Warshaw]

And that for me and the fact that he had another car that was, you know, eight, 18 or whatever, it was six. It's just you guys have too much for your income. And so that's why, why, if I had to do it, I would sell the car and get something cheaper. Not saying that you have to stay in a $10,000 car forever, but after this debt is done, then you can save up another 5,000, get yourself into 15,000. Right. Get something closer to 20, 25. That feels right. But I think that if you do my plan, you'll still get some of the medicine that Ken is talking about. Of the. Oh, yeah, I got to work.

[Ken Coleman]

I am all for selling on the car, but because it's the only debt they have, I'm fine if they attack it too, but I, I'm giving you a 12 month plan.

[Jade Warshaw]

Yeah.

[Ken Coleman]

On the car.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And, and you got to choose, but it's going to be uncomfortable regardless.

[Caller]

Yeah, for sure.

[Sponsor/Announcer]

Yeah.

[Ken Coleman]

Is your husband fully on board here?

[Caller]

Oh, 100. Yeah, he's. He's listening to the show as we speak, so.

[Jade Warshaw]

Okay. Okay. Game on. Game on.

[Ken Coleman]

Yeah. Well, there go you go.

[Jade Warshaw]

I mean, you'll be surprised what you can get for 10,000.

[Ken Coleman]

Oh, I love searching up cars.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You know, and, and by the way, that's the quickest way to do it. Now, again, you, you got to go get the smaller loan. That's the only Time, we're okay with that. But you're going to get out of debt faster. No question about it. So, yeah, appreciate the call.

[Jade Warshaw]

Good call.

[Ken Coleman]

Explain the, the, I love this because again, I always want to remember we have a lot of new people coming in.

[Jade Warshaw]

Yes.

[Ken Coleman]

Explain our ratio on car. Why did we say this was too much car based on. Yeah, their income.

[Jade Warshaw]

The thing to remember about cars is we all need transportation, but cars go down in value. They're not going up. And once they start going down in value, you feel that in your wallet, you feel that in your take home. And so if you're making, you know, our rule of thumb is you shouldn't have more than 50% of your salary and things that are going down in value. So they make 60,000 a year. The max car they need is about 30,000 combined. So each of them are driving a $15,000 Camry. That's basically what that looks like. They've got, they've got a $40,000 car and then another vehicle that they paid off. So we already know more car than they need. And I know, Ken, when we tell people to sell cars, it's like what have, what are you saying, Jade? But the truth is that car payment is keeping so many people from doing the things that they want to do and need to do with their money, like invest for the future. And so if you can get back your car payment, you are ahead of most American Americans if you can sell off your vehicle. And if you're upside down, what we were telling them to do is go to the, the bank or I don't care what kind of debt you get for the difference. It's bet if you're going down, it's good if you're going from $40,000 to $6,000 because you got a six thousand dollar loan to cover the upside down portion so you could actually sell the vehicle. That is a win. That is a win.

[Ken Coleman]

And while we're talking about this, this may not be a fun tank take for a lot of you, but you know, when I hear a lot of Americans, you know, talk about how expensive it is to live, most of the time they're not looking inward for just a moment to go, what are our combined car payments? And with two car household, you're probably looking at 1500 dollars a month easy. That would change their life if that wasn't there. So just food for thought. Hey, remember this. There's ultimately only one way to financial peace and that's to walk daily with the President, Prince of peace, Christ Jesus.