You Get To Decide Your Next Financial Step

Summary

The Ramsey Show Podcast Summary

Episode: You Get To Decide Your Next Financial Step

Date: April 20, 2026
Host(s): Ken Coleman & Jade Warshaw (plus guest features from Dave Ramsey, George Kamel)
Theme:
This episode of The Ramsey Show is all about empowering listeners to make purposeful, wise decisions about their next financial steps, even if they’ve made past mistakes. Ken Coleman and Jade Warshaw guide real callers through practical solutions, focusing on getting control of your financial life—whether you’re merging accounts after marriage, navigating a windfall, facing debt, or dealing with tough transitions.

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Key Discussion Points & Insights

1. Merging Finances as a Newly Married Couple (Taylor, 00:46-08:35)

Situation:
Taylor from Miami and her husband are struggling to combine finances due to irregular incomes and multiple rental properties.

Advice:

• Combine finances into one joint checking & one joint savings. (Jade Warshaw, 02:11)
• Budget for your lowest possible income month, then add extra as it comes.
  “If you get more money, just add it onto the budget as it comes in.” (Jade, 02:11)
• If debt-free, split recent wedding gift money between a modest honeymoon and further savings.
• Consider selling some rental properties to pay off your home mortgage and max out margin for investing.
  • “If you took that money that you have now, you paid off the mortgage ... You’re gonna have $17 million.” (Jade, 08:33)

Memorable Moment:
Jade runs numbers live, showing the power of investing an extra $2,000/month over 40 years (08:07-08:35).

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2. Harnessing the Power of Vision and Compound Interest (08:36-14:50)

Core Insight:
Start investing early—the real power is in maximizing time in the market, not just money invested.

• “Nothing beats time in the market ... Compounding interest, it’s what, the eighth wonder of the world?” (Jade, 10:38)
• Listeners are encouraged to use the Ramsey investment calculator and do the math for their own futures (11:56-13:12).

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3. Post-Divorce Reset & Handling a Windfall (Bianca, 15:26-22:59 & 21:30-32:50)

Situation:
Bianca, recently separated and receiving $100,000 from a home sale, has debt and needs a reset with three young kids.

Advice:

• Pay off all debt ($18,000), establish a six-month emergency fund (~$18,000-20,000), then protect the rest for a future home purchase.
• Do NOT use the lump sum to slowly cover living expenses. Keep it separate, with accountability, until financially stable again.
• Intensive focus:
  • “Right now, every ounce of time you have for work needs to be generating money. That’s all.” (Ken, 26:25)
  • If possible, consider working at a salon to have built-in clients before striking out solo.
  • Find work even during weekdays if it can cover daycare.
• Mindset:
  • “You need to almost trick your mind that that $40,000 is someone else's and you cannot touch it.” (Ken, 30:09)
• Empowerment:
  • “There’s no way, Bianca, that Jade and I would bet against a single mama.” (Ken, 30:38)

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4. House Affordability & Construction Financing (Nick, 34:03-39:01)

Situation:
Nick and his wife stretched themselves on a mortgage (40% of pay), want to downsize by building a house.

Advice:

• Don’t use a HELOC to buy land. Instead, sell current home, use equity for land and new construction via a one-close construction loan.
• Target a payment of 25% or less of take-home pay.

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5. Building Wealth for the Next Generation (Emily, 39:18-42:56)

Situation:
Young couple expecting a baby, wants to build wealth for their children.

Advice:

• Priority is building your own financial stability—this teaches kids directly and indirectly.
• Invest 15% for retirement, fund children's college via a 529 plan when budget allows.
• Avoid overextending; clarity and margin are key.

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6. Tackling Money Anxiety Despite Success (Mason, 44:28-52:17)

Situation:
Mason (24), no debt, $50K in investments and cash, but anxious about the future, especially buying a home in an expensive state.

Advice:

• Identify the root of anxiety—often comparison or uncertainty about the future.
• “You're comparing your next to where they are now.” (Ken, 46:08)
• Crunch real numbers for big goals (like a CA house) to create an action plan and alleviate irrational worry.
• “Fear comes in two forms, rational and irrational. The irrational forms tend to be extremely vague.” (Jade, 47:35)

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7. Transitioning to Stay-at-Home Parenting While Wealthy (Angela, 54:20-63:03)

Situation:
Angela (high earner, $3.1M net worth) contemplates leaving a $300K job to be with young children, fears feeling “foolish.”

Advice:

• Align your actions with your true values.
  “It's your definition of success. … For you, success means being there with your kiddos.” (Jade, 57:29)
• Reframe enough:
  “Ask, what is enough?” (Ken, 59:07)
• No amount of money replaces lost time with children.
  “You can always get back in and make more money.” (Ken, 59:56)
• Emotional validation:
  “You're making a great decision. … Listen to your heart.” (Ken, 63:00)

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8. Navigating Housing Crisis After Loss (Leslie, 76:45-85:23)

Situation:
Leslie, caring for her late mother, faces unaffordable rent on her own, unsure whether to rent with a roommate or face high studio costs, all while carrying a hefty car loan.

Advice:

• Sell the expensive car, use cash savings to buy a cheaper car, and pause investing temporarily for stability.
  “Pause retirement ... not forever, just temporarily.” (Jade, 83:46)
• Every bit of margin (from paused investing and cheaper car) can bridge the budget.
• Keep rent as low as possible, even if it means a roommate or moving farther out.

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9. On the Brink of Bankruptcy: Overwhelming Debt (Joshua, 85:41-94:11)

Situation:
Joshua & wife have $130K in debt (tax and credit card) on $100K income; considers bankruptcy.

Advice:

• Bankruptcy puts decisions out of your control.
• Create a clear budget, maximize both partners working full-time.
• It will be hard, but “there is dignity in that” work to pay it off (Jade, 93:14).
• “When you file bankruptcy, the control goes out of your hands.” (Jade, 91:33)

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10. Smart Car Buying & Joint Decisions (Chris, 116:58-124:01)

Situation:
Chris and wife paid off all debt, are choosing between two used trucks: $45K vs $35K. Wife prefers cheaper, Chris wants the more expensive one.

Advice:

• Make sure emergency fund is protected (keep 3-6 months expenses aside even after purchase).
• Run numbers, but also communicate with your spouse to address underlying safety/comfort concerns.
• “If Stacy and I are very separate on ten grand, I’m going to choose ten grand less to be in a better situation.” (Ken, 121:31)
• “This is why you work so hard ... so that the day finally comes where you get to pick the thing you really want.” (Jade, 122:50)

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Notable Quotes & Timestamps

• On starting joint budgets:
  “It’s not as complex as you think. You need one joint checking account ... then budget using your minimum month.”
  — Jade Warshaw, (02:11)
• On time in the market:
  “Nothing beats time in the market ... compounding interest, what is it, the eighth wonder of the world?”
  — Jade Warshaw, (10:38)
• On vision:
  “When there’s no vision, people perish. ... That’s what kills your soul long before you die.”
  — Ken Coleman, (14:21)
• On keeping windfalls safe:
  “I would tuck it away in a high-yield account under lock and key. This is where you need somebody to hold you accountable.”
  — Jade Warshaw, (22:59)
• On dignity and challenge of paying off debt:
  “There’s dignity in that ... you can turn back around and clean it up.”
  — Jade Warshaw, (93:14)
• On enough:
  "What is enough?"
  — Ken Coleman, (59:07)
• On living generously within means:
  “Generosity generally flows out of overflow, and you don’t really have that.”
  — Jade Warshaw, (108:19)

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Practical Homework & Tools Recommended

• Go to RamseySolutions.com, use the investment calculator, and map your potential. (13:12)
• Try the EveryDollar budgeting app.
• For insurance, use Zander Insurance for term life.
• Utilize Ramsey’s home and agent tools before making large housing decisions.

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Timestamps for Key Segments

• 00:46 – Merging finances: Taylor’s situation
• 03:54 – Budgeting with irregular income
• 08:07 – Impact of investing early: $17M example
• 15:26 – Handling a windfall after divorce
• 34:03 – House affordability and construction loans
• 44:28 – Financial anxiety despite success
• 54:20 – Stay-at-home mom, high net worth
• 76:45 – Navigating housing after loss
• 85:41 – On the brink of bankruptcy
• 116:58 – Car buying decision between spouses

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Overall Tone & Takeaways

Empowering, practical, direct—warm but tough love. The team gives clear, actionable guidance, often using humor, personal stories, and empathy for callers facing anxiety, uncertainty, or life changes. The repeated message: Your next step is always within your power—and getting clear on your numbers and vision changes everything.

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This summary captures key stories, advice, and memorable moments of the April 20, 2026 episode, omitting advertisements and other non-content segments as requested.

Transcript

[Dave Ramsey]

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. I'm Ken Coleman. Thrilled to be alongside my friend partner in crime today to help you. She is Jay Gorshaw. The phone number is 888-2552-258882-55225. Let's go to Taylor, who starts us off in Miami, Florida. Taylor, how can we help today?

[Taylor]

Hey, thank you all so much for having me. I'm really excited to be here. I just got married last month and I, my husband and I both are struggling to combine our finances because of all of the moving parts. And we're looking for advice from y'. All.

[Jade Warshaw]

What do you mean by all of the moving parts?

[Taylor]

Okay, so one issue I have is I'm a contingent worker. So some weeks with the job that I have, I only bill for a four day week. And some days I bill for a seven day week, which means my base income a month could be $4,400, or it could be seven $600. And it's contingent on for compliance reasons. I don't want to say publicly, but

[Jade Warshaw]

you just have an irregular income.

[Taylor]

Yes, it's irregular, but usually the base amount, I make 4400 and then the most I can make a 7600 in a month.

[Jade Warshaw]

What about him?

[Taylor]

He is part time for the school system. He makes 1,700amonth.

[Jade Warshaw]

Okay, that's it.

[Ken Coleman]

Okay, so let's talk about why he's only part time.

[Taylor]

Well, he has a rental portfolio and he manages right now four different rental properties.

[Jade Warshaw]

What's that bring in?

[Taylor]

So one of the houses. It's one of the houses has just been built and he roughly built it for 160k. And he's planning on selling this one for 240k. The other two, the cash flow between the two of them, they're only paying for themselves right now.

[Jade Warshaw]

Okay, so that takes us back to Ken's initial question and my initial concern, which is still working part time. The truth is he's still only profiting 1700amonth. We'll get back to that in a minute. I want to answer your first question about getting everything on the same page. So what I would do, it's not as complex as you think. You need one, you need one joint checking account that you're both paid into and then you need One joint savings account or high yield savings account that you're going to place your savings in. And then from there that. That's honestly it. Obviously, if you end up with 401ks each other will, you know, automatically be the beneficiary there, that sort of thing. So for now, just those two accounts. And what I would do is I would open up every dollar and I would budget for your minimum month. So for you, I would budget the 4400. For him, the 1700. And I would start with that as your kind of operating amount of money. And as you get more money, you just add it onto the budget as it comes in, you increase it. And now suddenly you might decide, oh, well, instead of spending, you know, 600 on groceries, now we can add a little bit more to that. Or before we didn't have, you know, money to do anything entertaining. Now we can add that back to the budget. Right. And as money FL in, you can increase line items or you can add line items, or if you have any debt, obviously the extra money would go towards your smallest debt.

[Taylor]

Okay, we are. We are debt free. Both of our vehicles are paid off. We don't have any credit card debt. We have a savings established together. We got about between 3 and $4,000 in gifts from the wedding alone. And we did not take a honeymoon. What, you think that we could, or do you think that money should go into savings?

[Jade Warshaw]

I think you need to take a honeymoon.

[Bianca]

Okay.

[Jade Warshaw]

Yeah, I think that's great. Is the. You said you have savings plus the money from the wedding. Is it just the 4,000 or there's more on top of that?

[Taylor]

No, I have. We have like another little like a. I guess you'd call like an emergency account with 2,000 in it together.

[Jade Warshaw]

Okay, so it's 6,000 total. Okay. So what I would do is, I mean, I would probably plan something modest because, I mean, you only have 6,000. And then I would try, if, if I were. If I were you, I would probably try to keep half of this aside as I'm starting to build the three to six months of expenses. And then I do half for the honeymoon and just keep it modest.

[Bianca]

Okay.

[Ken Coleman]

Yeah.

[George Camel]

What's your.

[Ken Coleman]

What is. You're going to be your margin now that, you know, we've walked through, we're just operating off of 60. $100. That's his 1700 and your 4400. How much margin do you guys have after all the bills are paid, meaning

[Taylor]

how much is left over, how much is leftover? Between 8 and $900 a month.

[Ken Coleman]

Okay, what's. What's. If you have no debt, where's all that money going?

[Bianca]

Well, it up.

[Taylor]

And we just got married last month. It paid for the wedding and now we're just now back to a spot where, you know, we paid for it, so.

[Ken Coleman]

Got it. So what will it go back to

[Taylor]

the spot where we're breaking even because we just paid all that stuff off? Honestly, I got an uncomfortable position paying for all of that, and now I'm like, oh, I can call now.

[Ken Coleman]

Okay, gotcha. Well, again, you know, as he increases his income, you know, or certain. Sees more value out of that, you know, the, the managing. The rentals, you guys are in a decent spot for you to win. And the good news is you have no debt. So, you know, just walking these baby steps out, which sounds like you're in baby step three, which is to get a fully funded emergency fund of three to six months. Three to six months of expenses. As my brain.

[Jade Warshaw]

I'm going to take that. I like that.

[Ken Coleman]

Yeah. Yeah.

[Jade Warshaw]

What's the plan for you guys as residents? Are you renting now or what's up?

[Taylor]

No, I, I purchased a house before I met him, and that's the house we're living in now.

[Jade Warshaw]

So you guys have four properties total?

[Taylor]

Well, really, we have more than that if you include his portfolio.

[Bianca]

He had.

[Taylor]

He acquired all of his rentals and he has like a couple of lots that he. He purchased for.

[Jade Warshaw]

So you guys. A lot of debt.

[Taylor]

Well, and mortgage. And how much mortgage debt?

[Jade Warshaw]

How much home mortgage debt do you have Comb. Including all his portfolio?

[Taylor]

Including all the 60 plus. I'm counting it right now.

[Jade Warshaw]

It's okay.

[Taylor]

I have six. There's 60k on one of the rentals.

[Jade Warshaw]

Okay.

[Taylor]

120 on another.

[Jade Warshaw]

Okay.

[Taylor]

And there's 260 on the house that we live in now.

[Jade Warshaw]

Okay.

[Taylor]

The other things are paid off.

[Ken Coleman]

Okay. Because when I heard managing rentals, at first I thought this was just what he did for somebody else.

[Taylor]

No, no, no. He. He owned.

[Ken Coleman]

He's carrying this debt.

[Taylor]

Yeah, he owns them, but he's positive in equity on all of them.

[Jade Warshaw]

Understood. But they're not. And they're not bringing in. He's breaking even on rents. I'm just wondering about that.

[Bianca]

He's charging too little.

[Taylor]

He's charging too little for rent every month. He got close with the tenants that he has.

[Jade Warshaw]

I'll be honest with you. This is just me. I'm not. I think there's some things you've done really well. If I were in Your shoes. You guys are newly married. There's part of me I would love because you said he's equity positive in all of them. I would love if you sold some of these in order to pay off your personal residence, because if you did that, you guys would be smoking, like, unstoppable.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Okay, think about that. What's your.

[Taylor]

All of them.

[Jade Warshaw]

Yeah, but what's your mortgage every month?

[Bianca]

What do you mean?

[Taylor]

Mortgage is 1600, but I pay 2000 because I add extra 400 to principal every month.

[Jade Warshaw]

All right.

[Taylor]

And that's included in my. And my. Like when I told you I still have eight to nine hundred dollars left over every month. That's already after calculating that.

[Jade Warshaw]

So it'd be 2000 total.

[Taylor]

Correct.

[Jade Warshaw]

I love that for you guys, because if you turned around and took that money. How old did you say you were?

[Taylor]

I'm 27.

[Bianca]

Oh, 30.

[Ken Coleman]

Gosh, she's got the investment calculator out.

[Jade Warshaw]

I'm loving this because this is not even including, like, your normal 15%. I'm just saying if you took that money that you have now, you paid off the mortgage and you said, we're going to take that extra 2,000 DOL. We're going to invest it. We're going to invest it for a long period of time. Let me add this in here. I'm going to tell you what this number is just based on that, and it is. Drumroll, please. You're going to have $17 million.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Taylor, if you do that from age 27 to age 67, you have nothing in there. Now you contribute $2,000 a month. Average annualized rate of return, 10 to 11%. 17 million. Do the math. Buying a home is one of the biggest financial decisions you'll ever make. But too many people base the decision on opinions or what the market is doing that week.

[Dave Ramsey]

Churchill Mortgage has been our trusted partner for over 30 years because they do things the Ramsey way. A lot of people think buying a home starts with going to a bunch of open houses. But if you're buying a home the right way, you start with a budget and a trusted guide like Churchill. Before you even think about house shopping, Churchill will show you the real numbers, not what a bank will approve. Buying before being ready is how people end up house poor and stressed out.

[Jade Warshaw]

Churchill will tell you the truth, and they won't push you into more house than you need. And once you understand what you can actually afford, you can move forward with clarity and confidence.

[Dave Ramsey]

So if you're ready to buy a home, choose the right guide. And stick to a plan. Go to ChurchillMortgage.com and get started. That's ChurchillMortgage.com this is a paid advertisement

[Ken Coleman]

in MLS ID 1591 nmlsconsumeraccess.org Eagle housing lender. Okay, I wanna make sure that we, we lock in on the number you just threw.

[Jade Warshaw]

Yeah.

[Ken Coleman]

At that last caller.

[Jade Warshaw]

Because you don't just say 17 million and speed pass it. Like you didn't just say what you just said.

[Ken Coleman]

No. And we were talking about this. You know, the reason that number is so high is.

[Jade Warshaw]

Well, number one, the time in the market. Like nothing beats time in the market. The fact that they would be starting in their 20s, in their case, 27 years old. That's why it's so important, guys, when we teach this stuff, if you can get it, if you can teach it to your kids, your friends, kids, your grandma, like, teach it. Because the longer, the younger you are when you start this, that compounding interest, man, it's, it's. What is it? The eighth wonder of the world? Is that what they used to say?

[Ken Coleman]

I. I think that's what it is.

[Jade Warshaw]

Is that right? Eighth wonder. And, and it's true because for them. Yeah. Age 27. Age 67. Not saying that they have to work until they're 67 because they're going to be millionaires, obviously well into their 40s. Right. But the point here is it doesn't take much. Can we talk a lot? A lot of times people think this is the sell the car show. Right. Because we're always telling people to sell their cars. But in this case, $2,000 is what is setting them free. I don't even know if that's 15% of their income. I don't know, you know, how much they're going to make over the course of their life. All I know is today, if they paid off their house, which they had the money to do, to have that $2,000 of margin and how powerful that is. And all of you who are watching right now need to think about that. Because if it's not $2000, maybe for you it's 1500. Maybe for you it's 500. Go home today. This is everybody's homework.

[Caller/Guest]

All right?

[Jade Warshaw]

Pull out an investment calculator. Go to Ramsey Solutions.com, pull out an investment calculator and plug in the numbers. It's going to ask your current age. So if you're 47. I'm 42. I put 42 in there. And then when do you want to retire? I'll put 62 and then start playing around with the numbers. And at the bottom where it says, what do you think your annual return will be? I want you to put 10 to 11%, because that's what you should be making in the stock market can, if your mutual funds are not producing, at least that. Which of course, over the past four years, it's been bananas. It's been in the 20s most of the time. You need to put that. Because the truth is, since inception, since 1926, the stock market has an annualized rate of return, which means if we take all the years and take the average of them, it's between 10 to 11%. So you can say, oh, Jade, what about 9 11? What about 2008 and 9? Jade, what about now? Right, that's fine. Yes, it does dip and do all of this, but it does it as it ticks up. It does it like this. So we're always going up. So I want you to do that. And if you're, if you're invested now, go and look and see, oh, my gosh, what are, what have my returns been? Because if you're somewhere in the 5 and 6 and 7%, you're not invested in the top, in the tops 10, Ken, you need to be. Yeah, you need to be doing better than that. So that's just a little, A little something something.

[Ken Coleman]

And here's what we're going to do. To help with the home that teacher J just threw out to everybody, we're going to put a link to the investment calculator that she's got up on her computer right [e-mail] we'll put the link in the show notes. Kelly, the producer, is going to do that because she's amazing as well. So we got a homework assignment and we already have the cheat sheet for it.

[Jade Warshaw]

I know.

[Ken Coleman]

All you got to do is go to the show notes, click on the link, and I will. I just want to second the motion. When you do what Jay tells you to do, you're going to really have a on the ground experience with vision casting.

[Jade Warshaw]

Oh, so good.

[Ken Coleman]

That's what I mean. When you can see into the future and what she's going to have you do is plug in numbers and see what is actually possible. But the possibility has power because it becomes a number and you can see it in the future with just consistent activity. So what's going to happen is, as a result of your homework assignment for these fine folks is they're going to now start to visualize and Set a vision for their future.

[Jade Warshaw]

I know you're ready to preach on this, because what happens when there's no, get me started.

[Ken Coleman]

I'll take an offering.

[Jade Warshaw]

What happens when there's no vision?

[Ken Coleman]

People perish. And what that means, that's straight out of scripture. And what that means is their soul, the spirit in all of us truly begins to seep out of your body and without getting any more of that. And so that's why it's so huge, by the way, while we're at it, there needs to be a vision for your marriage. There needs to be a vision for your children. There needs to be a vision for your professional life. There needs to be a vision for your health.

[Jade Warshaw]

Yes.

[Ken Coleman]

I mean, you will perish. And what that means is that you are slowly, which we all are. But this idea of never having a vision and something that I'm looking forward to is what kills people, kills your soul long before they die, which is what Edgar Allan Poe said to put a bow on it. Most men lead lives of quiet desperation and go to the grave with the song still in them. Sorry, I had to. You know, I'm now pulling old references. I love it, but that's the idea. That's what we're talking about. All right, let's get to Bianca, who joins us now in Las Vegas. Bianca, how can we help today?

[Bianca]

Hi, good afternoon. So I have a question. My dad is selling his house that I'm currently living in, and we're looking at me, my sister, and him getting $100,000. 100,000 each from the house. And I have three kids. I have two twins that are eight months, and then I have a four year old. I had to leave the father of my kids when my twins were five months. So as a stay at home mom, I'm trying to get back on my feet and I'm trying to see what should I do with these hundred thousand dollars to get started.

[Jade Warshaw]

Okay, wow.

[Ken Coleman]

Well, can you give us a little detail of what are the money problems you're dealing with? In other words, you know, we want to know what your debt is. We want to start there, so we can kind of help you walk through what you should do with the 100k. So give us a picture.

[Bianca]

Okay, so I have some school that I have to pay off that is $12,000. And then my debt for credit cards and stuff is 3,000. And then I did buy a mentorship to get started in my business that I have to pay off as well.

[Jade Warshaw]

How much?

[Bianca]

3,000. Okay, so 12,000 for the school, 3,000 debt of credit cards, and then my mentorship. 3,000.

[Jade Warshaw]

So you got $18,000 of debt? The. The 100,000. Is that going to be the only money to your name or do you already have some money saved up?

[Bianca]

No, I have nothing. I was a stay at home mom the whole time.

[Ken Coleman]

How soon do you get the money?

[Bianca]

As soon as house sells and they're taking pictures next week.

[Ken Coleman]

Okay, so.

[Bianca]

And then also too, because I'm getting into like the hair business and like content and all that. I do want a room for the house that I'm gonna rent. Because I'm thinking, I'm debating whether doing a two bedroom and all of us sleeping in one bedroom and then having one room to have all my things to travel and stuff as a traveling hairstylist.

[Jade Warshaw]

Interesting.

[Bianca]

Oh, okay. Exactly. So I'm just debating whether I should. So the houses here are like 1600 for two bedrooms, and for three bedrooms is 2000.

[Jade Warshaw]

To rent the room out. Is that. That's the profit on renting the room out?

[Bianca]

No, for renting a house.

[Ken Coleman]

That's just her cost. Rental cost.

[Jade Warshaw]

Got you.

[Ken Coleman]

So are you generating any revenue, any income at all right now as a hairdresser?

[Bianca]

Currently, I'm just practicing. That's the thing. I'm just practicing my. Because it's a hair bridal business, so I'm still learning, which I did hair for 14 years, but since I did color, it's a way different department. Like learning a lot of stuff.

[Ken Coleman]

Well, here's why I'm asking. Here's what I'm asking. How are you surviving right now? That's what I'm trying to get my mom.

[Bianca]

My mom, she's the one helping me right now.

[Ken Coleman]

Okay, so you're not going into debt.

[Bianca]

Oh, and then I do have child support too, that I'm getting $1,800.

[Ken Coleman]

Okay, so we have $1,800 a month coming in and mom is helping you out, and you're not going into debt for living expenses is what I'm trying to get at.

[Bianca]

No.

[Ken Coleman]

Okay, great, that's good. Okay, so your big question is, I'm getting $100,000. We don't know when you're getting that. We hope within three to four months. The house hasn't even gone on the market yet, and then there's time to get that. So let's just say to be safe, we're looking at four to five months at the earliest that you're getting this money. Is that fair?

[Bianca]

Yes, that's what I'm Thinking too.

[Ken Coleman]

Okay? And so when we get the 100,000, we want to clear the debt and then we set you up for the next level. So here's what we got going on. We got to do a commercial break and we want to be able to help you. And so. Hang on the line, Bianca. When we come back, Jay's going to walk you through every penny of this $100,000 and how it can set you up for financial success. So that's the good news. You're going to be okay. Hang on the line. We'll be back to take care.

[George Camel]

Hey guys, George Camel here. Listen, we need to talk about your phone plan because for a lot of you it's like a bad roommate, you know the one. Unpredictable moods, always asking for money, hard to get rid of and they never do the dishes. And that's what the so called big wireless carriers are like. They're counting on you overpaying forever. But Boost Mobile flipped the script. You can unlock up to $600 in savings per year over the big guys when you switch to Boost Mobile on their unlimited plan. There's no contracts, no hidden fees and no surprise email saying hey, your bill went up because reasons you see with Boost Mobile you bring your phone, keep your number and pay just 25 bucks a month. 25 bucks and that price is locked in forever. So if you're thinking, okay George, that all sounds great. What's the catch? There isn't one. Boost Mobile backs it up with a 30 day money back guarantee which means you can try it without feeling trapped. People kick the bad roommate out. Head to boostmobile.comramsey to make the switch today. That's boostmobile.comramsey based on average annual payment

[Ken Coleman]

of AT&T, Verizon and T mobile customers compared to 12 months on the Boost Mobile Unlimited plan as of January 2026. See website for full detail.

[Kathy]

Foreign.

[Ken Coleman]

We are on the line with Bianca. Bianca is going through a divorce. All the things separating from the father of her kids and she's getting a hundred thousand dollars from the sale of the home. And so we're bringing her back because we got to walk through this. She's got $18,000 in debt. And so Jade, let's jump in here because last we talked to her, she's trying to find a place that in that sixteen hundred dollars a month range for rent and so walk her through here. What would she do with this 100,000? How does she get on stable feet with this money?

[Jade Warshaw]

Yeah, so the hundred thousand, I would use that to walk the baby steps. So the first thing you're doing, you're paying off the 18,000 of debt. Okay? So that's going to leave you with a 78, around 80 left. And then from there on you're going to estimate, you're going to do some research here. You're going to say, okay, what's it going to cost to rent in the area? I think you quoted around sixteen hundred dollars a month. Then you're going to estimate food, transportation, all of these things. And you're going to create a budget. Right now, it's kind of a make believe budget, but you're going to go, okay, what's my cost of living? Is it somewhere around 3,000, maybe $4,000 a month? And then you're going to take that and you're going to multiply that by six and you're going to put aside another 18 to 20 thousand dollars as a six month emergency fund. So we've already spent 40,000 of this money and now we've got 60,000 left. Now here's my challenge to you. I would not take this money, Ken, and siphon off sixteen hundred dollars a month for rent until it's gone.

[Ken Coleman]

I agree.

[Jade Warshaw]

That is not a plan. I would take this money, I would tuck it away in a high yield savings account under lock and key. This is where you need somebody to hold you accountable. You're not married right now, but you need a really good friend, somebody who you're willing to give access to your life in the way of. I know where this money is. I know what you've told me. Maybe I get an alert to my phone if you start spending this money, something like that, to where this money can just hide there until you're ready to purchase a house.

[Ken Coleman]

Yeah, I agree.

[Bianca]

Right? Yeah.

[Jade Warshaw]

You know what I'm saying?

[Bianca]

I just don't want to spend everything on rent. I don't want to.

[Jade Warshaw]

You're not going to spend any of it on rent.

[Ken Coleman]

I have a plan for that, Bianca. So let me ask a quick question. When you say traveling hairdresser, does that just simply mean you go to the clients? Is that what that means? Forgive my ignorance.

[Bianca]

Yes, yes. So in the bridal industry, you go to the venue and do their hair there or you travel to a salon that I have where I do daily rental. Okay, but I just want to have a room to do content. Because nowadays everything is content, you know?

[Ken Coleman]

Okay, and I thought I heard that. So that means you're doing some social media stuff, right?

[Bianca]

Yes.

[Ken Coleman]

Okay, let me ask you a question. Are you Making any income off of that content.

[Bianca]

So I do practice every weekend on somebody and they tip me like, I mean, for the month I get like 100, 150 maybe.

[Caller/Guest]

Like, but is that, is that making

[Ken Coleman]

money on the content you're posting? That's. That's what I'm asking. You said content. I'm getting somewhere with this. You said I want to make my content work. Well, content doesn't work unless it's generating revenue. So. Are you generating any revenue?

[Bianca]

No, I literally just started two weeks ago.

[Ken Coleman]

You just started? Can I, can I just be a coach for a second for you?

[Bianca]

Uh huh. Yes.

[Ken Coleman]

There's an old phrase on some cheesy motivational poster somewhere that says when you chase two rabbits, you lose both of them. And I just wonder, and I'm not saying that this is chasing two rabbits, but I wonder if you shouldn't be putting all of your energy into doing people's hair. And then we get to a point where, to your point, I'm not spending any of the money. Jade's got it under lock and key and I keep it under lock and key. And I'm able to pay for my rent by my own job. I can pay for groceries through my own job. I don't need mom to support me. And I just wonder if that's not the best use of your time.

[Bianca]

Well, here is my work, my business.

[Ken Coleman]

I understand, but you have to put time into all the social media stuff. So again, you don't have to prove this to me. I'm just telling you, you don't have to prove anything to me. I'm not being cynical, I'm just wondering

[Jade Warshaw]

two sides of it. And I want to clarify this. I think this is going to help you, Bianca, if you, if you are already doing someone's hair that day for money and it's easy for you to film it, it's not taking a lot of time on your day. Yeah. It makes sense to post it online. From there, your revenue can be more so about advertising and getting people in the air because, you know, people use social media like Google now, so that's a great advertising venue. I think to Ken's point, it would be a while before you're generating any sort of revenue from platforms. Is that what you're going, Is that what you're going for?

[Ken Coleman]

Yeah.

[Bianca]

Yes. So the content is not for me to be like a content creator. It's just to advertise myself.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And again, I'm only raising it myself out there. And I love that, Bianca, that's why I'm saying I didn't want you to hear cynicism from me more. Just focus, utter focus right now so that we're bringing in as much money as possible. Because you're a single mama mama bear that's got to take care of some very important people. And so that's just me saying, think about that right now. Every ounce of time you have for work needs to be generating money. That's all.

[Jade Warshaw]

How many hours a week are you working currently? Because what I'm trying to get out. I'm just gonna be honest with you. You got four kids.

[Bianca]

Three.

[Jade Warshaw]

Three.

[Bianca]

Three boys.

[Jade Warshaw]

Three boys. And you're going to have a $1600 rent because remember, the plan is to not touch this money. So my, my, my question for you is how many hours are you working a week at this or where do you think it will start? And if it's at a part time level, what will you do with the other time to bring in money? I'm just throwing some questions out there for you to be thinking about.

[Bianca]

So my goal is to work Friday, Saturday and Sunday and just do it full time. Right now I'm just doing a couple of colored clients able to help me pay the bills and my mom too. But I just basically Friday, Saturday, Sunday, which are the busiest days to work because when, when I get to the point where my business will be successful, I can make up to like a thousand to 1,500 a week.

[Jade Warshaw]

But what will you do on the days that aren't Friday, Saturday and Sunday? What will you do on Monday, Tuesday, Wednesday, Thursday?

[Bianca]

Well, my, my, my plan was to stay with my kids because it pays more, it cost. Have them in daycare or somebody watch them. And that's why my goal is Monday through Thursday, stay with them, and then Friday, Saturday and Sunday work those days.

[Ken Coleman]

Can, can mama not watch them while you're out working?

[Bianca]

My mom.

[Ken Coleman]

Yeah, your mom.

[Bianca]

My mom, yes, my mom works. I literally have nobody to watch them right now. That's, that's why I chose to go. Yeah.

[Jade Warshaw]

Okay, so here's what, what I just want to caution you. I want you to do whatever you can not to siphon this money slowly.

[Bianca]

Okay.

[Jade Warshaw]

And because what can happen is you can have a distorted view of reality of how well you're doing.

[Bianca]

Yeah.

[Jade Warshaw]

Because when the bills are paid and everything seems fine, it makes you feel like everything's good. But if your hair business is not bringing in the money that you really need to survive, you could look up and be in a world of, of pain. In about a year or so from now.

[Bianca]

Right.

[Jade Warshaw]

So just, just caution that I think you're thinking through this. I want you to do a, a, a deeper level of thinking on the Monday through Thursday deal and see if there's anything you can find, because don't automatically assume you can't find work that can pay for daycare. I don't want you to automatically make that assumption.

[Ken Coleman]

Yeah. And, and to that point, I'm going to throw it out there. Maybe the best move for you right now is to go work for an established salon that needs somebody cutting hair. And you're not the one trying to find clients. You got enough to deal with right now as you're going through a very traumatic time. You're, you know, you need. So I would be considering if I could go make really good money or as much money as you possibly can, given your time limitations for a salon where they're generating customers for you or however that works. I'm over my skis here on this particular topic. I should be letting you talk about the business part, but I think if you could get somebody else to pay you is my point. Agree until you get established and then we find. Okay, I'm going to start doing a couple. Keep my hair color clients on. You know, maybe I do a Monday night. You know, the boys are in bed at 8. Maybe I do a couple. You know, I do one late night color.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And you begin to build that way. And I think this is the mindset you're going to have to have. But hear, Jade, well, you need to do everything in your mind. You, I need to almost trick your mind that that $40,000 is someone else's and you just cannot touch it unless there's some crazy, insane emergency, which of course you've got to, but it's truly emergency money only. And I think if you do that, you will find a way. There's no way, Bianca, that Jade and I would bet against a single mama.

[Jade Warshaw]

No way.

[Ken Coleman]

Like, there's zero chance. Right. I want you to hear that like there's no stopping you. I wouldn't get in front of you if my life depended on it to take care of those three boys. So I want you to hear that you got this. We believe in you open. Okay? But get after it like your life depends on it. All right,

[George Camel]

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 curve ball hits.

[Dave Ramsey]

You know, we hear it all the time. A car Accident, a cancer diagnosis, a heart attack. And suddenly everything changes.

[Caller/Guest]

Yeah.

[George Camel]

And that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens.

[Dave Ramsey]

Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook and that's long term disability insurance.

[George Camel]

Yeah, 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.

[Dave Ramsey]

Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan whether you're single or married. It's not optional. If you're going to be out of work for a while, then you need to make sure the money's still showing up.

[George Camel]

And that's why Zander is our go to. They make it super simple to get the right coverage at the best price. No pressure, no upselling.

[Dave Ramsey]

I've trusted Jeff Zander and Zander insurance for over 25 years and so is my family.

[George Camel]

So don't wait. It's fast, it's easy, and it could make all the difference. Go to zander.com or call 800-356-4282.

[Dave Ramsey]

Protect yourself, protect your income, protect your family.

[Ken Coleman]

Buying or selling a home is a big deal. You didn't need me to tell you that. It's just such a huge, huge deal. The emotion, the money that's involved here. And the reality is all these deferring headlines. There's clickbait on social media, somebody always trying to tell you about the latest things. But we want you to know we're here minding the store. What are the real trends? What are home prices at right now? What are we seeing with the inventory? What is the rate on the average? 15 year fixed rate, all of those things. We've got that for you so that you can trust the information. And you can get that by the way by going to ramseysolutions.com market. That's ramseysolutions.com market or we have the link in the show notes. All right, let's go to Nick in Wichita, Kansas. Nick, how can we help you today?

[Caller/Guest]

Hey, guys, thanks for taking my call. It's an honor to be Talking to you all.

[Ken Coleman]

You too.

[Caller/Guest]

So basically, so basically my wife and I bought this house about a year and a half ago with two incomes. We had planned for two incomes for quite some time and the Lord blessed us with our first daughter and so we kind of switched paths. So my wife is a stay at home mom because we'd like to expand our family a little bit further. But we know that now this house is a little bit more than we could chew. So we're looking for other options. And one thing that we're looking at is some land that we would like to buy and then build a house on. So I called the bank up and they said, hey, you should take out a HELOC to buy the land and then get a construction loan. And I said heloc. I don't know, what would Dave say? So that's why I'm kind of calling in today.

[Ken Coleman]

So before we answer that part of it, what is too much to chew? This house, how much are you? You're running short on money. Give us breakdown.

[Caller/Guest]

Yeah, so currently with our mortgage and everything, unfortunately we got a 30 year loan. And so it's 40% of our take home pay right now, which is how much is a lot more than 25%. Take home pay is about 65 grand.

[Ken Coleman]

So take home is 65. And what is the actual amount of the mortgage right now?

[Caller/Guest]

So the mortgage is a little over 1,800 bucks, but we put extra on because we wanted to pay it off earlier than 30 years.

[Ken Coleman]

Okay.

[Caller/Guest]

Now knowing what we're paying about.

[Ken Coleman]

I'm sorry, go ahead. Well, knowing what we know now, the 1800 is too much.

[Caller/Guest]

Right?

[Ken Coleman]

It's too much for you guys. So as we start thinking about what we're doing now, and you're thinking about a house with land, what is the number you need to be at? If you could wave a wand and change your mortgage payment it to the right percentage, what would it be? A 25 at max.

[Caller/Guest]

So 25% would actually be about $1,500. The minimum payment right now is 1,800. But we actually pay more than that to make it not a 30 year loan. That's why it's at 40%. So it's actually about $2,400.

[Jade Warshaw]

Instead you said you take home 65,000. That's around 5,400amonth.

[Caller/Guest]

Yes.

[Jade Warshaw]

Okay. And you said you're trying to get the more. 25 is about 13, 1300. So I, I wouldn't, I just want to, I just want to make sure we're on. We're on the same numbers because you're quoting different numbers than I have on my paper. So I just want to make sure you're off by about 300 on a lot of what you're saying, which is not a lot, but it is a lot. You see what I'm saying? So I just, I want to, I just want to make sure I'm. It's fine that you're off. I just want to make sure we're tracking together. So you've been paying extra on the eighteen hundred dollar mortgage. That's the paying. The extra is what's. Put that at 40%.

[Caller/Guest]

Yes.

[Jade Warshaw]

Got it. Okay, now we can move forward. Keep going. So the plan is somebody told you to take out a heloc.

[Ken Coleman]

It rose your hackles to buy the land.

[Jade Warshaw]

Yeah.

[Ken Coleman]

But first of all, you know our answer to that. But beyond our principal answer on that, I just don't understand why. Well, I do. They're trying to sell you a product.

[Jade Warshaw]

Yeah. Don't do it.

[Ken Coleman]

But you should be able to do the lot and the house all together in one construction loan and it needs to be, you know, within reason for you. So can you do that? Have you found a place where you can get the lot and build a house and come in where you need to come in at? At what's your monthly mortgage is?

[Caller/Guest]

Yes, yes, I think so. So the lot is about 65 grand and we put about 150 into a house on it. And so with the equity we have in our home now, that would bring us at a mortgage of about 150, maybe a little bit less. So that would, our monthly payment would be about probably a little bit less than $1,500 a month.

[Jade Warshaw]

That's great.

[Ken Coleman]

It's a much better situation. So the point is put the house on the market and do what you just said. But you don't need to get a HELOC to buy the land.

[Caller/Guest]

Okay. Yeah.

[Jade Warshaw]

You're just going to be displaced for a while.

[Ken Coleman]

Yeah, well, they're just selling you the bank. That's their job.

[Jade Warshaw]

Yeah.

[Ken Coleman]

That's how they make money. But yeah, you don't need that. You just do it all in one lump sum. You've actually if you built a home before.

[Jade Warshaw]

I've never built a home.

[Ken Coleman]

Neither have I. So I'm a bit of a rookie on this, you know what I mean? But I know you can do it all in one swoops. It sounds like you've researched it, so yeah, you're doing the right thing. I'm glad that you have equity that you can get out of this situation.

[Caller/Guest]

Yeah, absolutely. Me too.

[Bianca]

Yeah.

[Jade Warshaw]

You're looking for a construction of permanent loan. Sometimes it's called like a one closed loan because you're not doing a separate loan on the land and then a separate loan. It's all together and it's one close. It's going to be easy for you to do it that way.

[Caller/Guest]

Yeah.

[Ken Coleman]

Thanks for the call. You're a smart young man and now you know what to do. And, hey, walk away from these things as we have when we've made dumb decisions, or maybe not dumb, but risky, and then the risk comes home to roost. So learn from this. Let's go to Emily, who joins us now in Philadelphia. Emily, how can we help you today?

[Bianca]

Hi. Thank you so much for taking my call.

[Ken Coleman]

Sure.

[Bianca]

So my husband and I were expecting our first baby in June.

[Ken Coleman]

Congrats.

[Bianca]

Thank you. And we were wondering the best way to build wealth for our child, especially because we hope to have many children. So we wanted to make, and we wanted to start now with that and I wanted to know, like, how to start this and then updated as we have more children in our salary changes.

[Jade Warshaw]

Oh, I love that. You know, I feel like that's kind of been a sentiment lately, people calling in and thinking about the best way to build wealth for their kids. And truthfully, and I think, Ken, you would agree, I think the best way to set your children up for wealth is for you to set yourself up to build wealth. Because when you do that, not only are they learning valuable money principles in the home, Right. They're, they're observing what you do on a daily basis. So they're seeing you save money. They're seeing how you speak about money. They're sensing the feeling about money in the house. Right. So when it's healthy, that's very good for them, not to mention as you're building wealth, then you can do those things for them that set them up to succeed, like, you know, pay for their college. You can help them with their first car payment. Right. You can match the cost or, you know, different things like that. So I think that's the best place to, to start. And obviously, as you're doing that, yeah, you're putting money in a 529 for them. Maybe you have the extra money that you're putting it aside, you know, in a mutual fund that you plan to gift them at wedding. Right. Those certain things. So let's talk about. Given that, let's talk about your financial Situation where you guys are today.

[Bianca]

Okay. Yes. So that was also kind of part of it because we make about a total as a household like 200000 great per year. But I am not sure if I'll be returning after maternity leave. So.

[Ken Coleman]

Okay, what will it change to then?

[Bianca]

A hundred thousand.

[Dave Ramsey]

Oof.

[Ken Coleman]

Now how is that? Because we don't have a ton of time with you so we're going to roll through this real quick. How will that change your budget in the sense of will it be super tight or will you still have margin?

[Bianca]

It will be pretty tight, especially because we're looking to buy a house now. But we're doing that based off of his income just in case.

[Jade Warshaw]

Good.

[Ken Coleman]

Smart.

[Bianca]

So it will be pretty tight. So you want to optimize what we have.

[Ken Coleman]

And you have no debt?

[Bianca]

No debt, no good.

[Ken Coleman]

Do you have an emergency fund?

[Bianca]

Yeah, we have almost six month emergency fund and about like 60,000 cash and 40 in a brokerage to put down for the house.

[Jade Warshaw]

Very good.

[Ken Coleman]

And so I'm moving fast here just for Jade to give her the final coaching moment here. So will we still have margin to keep investing 15% in Baby Step 4 with the reduction you'll still be able to do that?

[Taylor]

Yes.

[Ken Coleman]

And then it'll be tight. So now it's baby step five. So we just aren't going to have a lot to put in there. Jade is what I'm hearing.

[Jade Warshaw]

Hearing.

[Ken Coleman]

Yeah, you're just 529. You're just. That's a reality. So we got to figure out some income.

[Jade Warshaw]

Yeah, it's going to be tight because you're going to be investing 15. You're buying a new house. That I mean that's what it is. But here's the thing. How old are you guys?

[Bianca]

26 and 27.

[Jade Warshaw]

26 and 27. You are so similar to the couple that called in earlier that was going to have $17 million. If you guys avoid debt, you continue to to do this, your, your income continues to grow over time. Time. You are going to retire with several millions of dollars right on the hundred thousand dollar income. On the fifteen hundred dollar income. You're going to have plenty. You're going to have plenty to put that fifteen hundred dollars into your investment. Savings.

[Ken Coleman]

Foreign.

[George Camel]

Let's talk about something nobody wants to think about until it wrecks their budget. Medical debt. Medical debt is one of the biggest financial landmines in America today. And that's why Health Trust Financial is the only health insurance provider Ramsey recommends you guys. A lot of people have medical debt, even with health insurance, because you can pick the wrong plan, pay big monthly premiums and still get slammed with huge out of pocket costs later. And if you're self employed or you run a small business, you're paying 100% of that bill. But Health Trust Financial shops multiple top rated carriers with no extra cost or pressure to help you get the right plan while finding you big savings. And they don't just look at the cheapest one. They help you understand deductibles, networks out of pocket costs so you don't get surprised later. And most people who work with Health Trust Financial save up to 50% on their health insurance costs. That's real margin you can put towards working the baby steps instead of medical bills. So don't let one hospital visit sabotage your financial plan. Go to healthtrustfinancial.com and protect your budget. That's HealthTrust Financial.

[Ken Coleman]

Welcome back to the Ramsey show in the Fairwinds Credit Union studio alongside Jade Warshaw. I am Ken Coleman. We're so excited to have you with us today. The phone number to jump in, 8888-2552-2588-8825-5225. Mason joins us now in Richmond, Virginia. Mason, how can we help today?

[Caller/Guest]

Hey, how's it going? Thank you guys so much for being here. I was looking for what advice you could give me where I think most financial advisors would say that my fiance and I are doing really well for our age. But man, I just find myself really stressed and anxious about money all the time.

[Ken Coleman]

Well, give us some evidence that would say that these financial advisors are correct.

[Caller/Guest]

So we've got, we've got about 50,000 in investments. We've got no debt. We've got new paid off vehicles. We've got probably about 50 grand in cash. I mean, I think on paper we would be doing well. But there's just something in me that keeps me. There's just something in me that's telling me, hey, you're never going to retire. Life's getting more expensive. It only gets more expensive.

And, well, I can tell you just

keeping me up at night, I get it.

[Ken Coleman]

Totally understand. But this has nothing to do with paper. This has everything to do with your past.

[Caller/Guest]

Okay.

[Ken Coleman]

And what I mean by that is somewhere along the way in the environment you grew up in or some experiences that you have lived or been adjacent to, you have developed this narrative that you're actually calling us about today. Is that true or. I don't mind if I'm wrong, but I doubt you just pluck this fear out of thin air. Where is it coming from?

[Caller/Guest]

That's what I can't tell you. My, my fiance comes from a very well off family and I come from a pretty middle class family, never struggled or anything. I really can't tell you where it's coming from but.

[Ken Coleman]

Oh, I know where it is. You just told me. You actually just answered it.

[Jade Warshaw]

Yeah, you did.

[Ken Coleman]

You married a woman who comes from a very wealthy family, which is very different. And you've got a little bit of fear. I'm not going to be able to finish the way that I see her par parents finish. Or maybe I'm not going to be able to acquire everything that they have acquired. And you are comparing your now to where they are. Excuse me, you're comparing your next to where they are now. And I think that's probably what's driving you crazy. I want to bring Jade in. What are you hearing?

[Jade Warshaw]

How old are you?

[Caller/Guest]

I'm 24, she's 23.

[Jade Warshaw]

I think Ken is exactly right. Number, number one, you're very, I mean you're just getting started. My husband and I got married at 23. And Ken is exactly right. Right. You both came from families that did fine and did well and better than fine. And you do feel that pressure of okay, we both have a lifestyle we are used to, we want to get there right away. And you're right, you know, you got 50,000 invested, no debt, 50,000 in cash. You've done extremely, extremely. Hear me well, for 23 and 24 year olds you are so far above the game. I don't know if you heard the first call that we took where it was some folks in a similar situation and I was explaining to them the power of compounding interest. You are in such a magnificent situation because your margin is yours to invest and you're not a millionaire today. But I'm telling you it ain't gonna take long. Ken Coleman. No, it's not gonna take long at all. And I don't know if you've sat down. Here's what, here's my advice to you. And I've said this many times before, fear comes in two forms, rational and irrational. And what I find is the irrational forms tend to be extremely vague. So what you're saying, I'm just afraid I won't be able to retire. I'm just afraid I'm going to mess it up. I'm just afraid that we won't build wealth. Why? In what way? What's going to happen? So what I would challenge you to do is take that vague fear and put some, like, substantiate it a little and. And put some meat on the bones. Well, if you don't build wealth, why would that be? What would happen? You would lose your job. The stock market would crash and play out your worst fear. And then you're gonna look at it on paper and you're gonna. You're gonna kind of laugh at it and go, okay, that's. That's pretty silly.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Right.

[Ken Coleman]

So let's put you on the spot.

[Caller/Guest]

Yeah.

[Ken Coleman]

Because you're such a kind young man. And let's just put it out there. I want you to be as specific as you can on your greatest fear, the one that you lay awake at night. Be specific. What is it?

[Caller/Guest]

Yeah, we. We'd love to move to California one day. And we. I own a home in Virginia. She'll be moving in here. And it's. It's a lot cheaper in Virginia than California. And so I just feel, hey, maybe we. To be a. Be able to buy a home there. And I understand that.

[Ken Coleman]

Okay, hold on, hold on.

[Jade Warshaw]

Now we're getting somewhere.

[Ken Coleman]

That's good, but I want specifics. So let's be specific because we're actually going to use Jade's coaching here, but we're going to give her numbers. All right, so let's pick a number that's pretty realistic. What is that house going to cost in California roughly?

[Caller/Guest]

Maybe. Maybe 750 for a condo or townhome.

[Ken Coleman]

750.

[Jade Warshaw]

I think you need to up it. My guy.

[Ken Coleman]

Let's go. One, two. Let's go. 1.4.

[Jade Warshaw]

Yeah, I like that. I like that.

[Ken Coleman]

All right, 1.4. And how many years from now that you would be moving to California?

[Caller/Guest]

Any time frame. I mean, we'd love to move out there soon and just rent and buy home eventually.

[Ken Coleman]

Okay, let's go eventually. And let's go. Let's. You like 1.4? Do you want to do more than that?

[Jade Warshaw]

Let's start with 1.4, because they can get a condo or like a smaller townhouse.

[Ken Coleman]

1.4. And you got no debt and all that. So your big fear. You're telling me your big fear is I'll never be able to amass the amount of money I need to. To buy that house and not be house poor. Is that what I'm hearing?

[Caller/Guest]

Right? Correct.

[Ken Coleman]

All right, great, Jay. Takeover. This is fun. Now listen to this.

[Jade Warshaw]

Okay, so here's what I do. I take the numbers, and I'd work backwards. We talked about this. Earlier, because this is vision. Right. You're not there today. Although I didn't get your income. What's your income today?

[Caller/Guest]

Combined it'll be 131 30.

[Jade Warshaw]

Okay. So what I would start with is, I'd work backwards. I'd say, okay, I want a house that's 1.5 million million or 1.4 million. And right now I make 130k out of that. What do you take home every month?

[Caller/Guest]

It's about eight grand every month, eight grand.

[Jade Warshaw]

And out of that eight grand, how much is margin extra?

[Caller/Guest]

About 2,500, 2500.

[Jade Warshaw]

So I'd be looking at that and I'd say, okay, 2500, that's my margin. I want something that's 1.4. I've got to figure out how much money I need to save or make make in order to have something that's 25% of my take home. That's the math. That's the math to solve for. And when you solve for that math, you're going to start having answers and it's going to give you something aspirational to work towards. Because here's the thing, it is 100% not out of reach. It's just going to take some concerted effort to get there. Fair enough, sure. And then what you can do, you

[Caller/Guest]

can say, okay, that makes sense.

[Jade Warshaw]

If I take that 2,500 and let's play this out, let's say this a five or six or seven unit year time horizon. What if I invested that money? How quickly could I get there if I invested it and I would play that out, I would go on Ramsey Solutions, I'd use the calculator, I'd use the mortgage calculator and I'd use the investment calculator. That's exciting.

[Ken Coleman]

Punch in, punch in. 2,000amonth.

[Jade Warshaw]

Okay.

[Ken Coleman]

Still gives them a little bit of, of margin for other things.

[Jade Warshaw]

And we'll do it on a, let's do it on a five year horizon is. Do you want to do that 31, do we like that?

[Caller/Guest]

Five years sounds great.

[Jade Warshaw]

Okay, five years sounds great. So do you have anything invested currently? You 50, right.

[Caller/Guest]

That's just in retirement accounts.

[Joshua]

Nothing out.

[Jade Warshaw]

Okay. Nothing. Okay. I won't use it. Retirement. Okay. So if you started investing that today, you're going to have $250,000 in the next five years. And that's just with what you have now. That's no side hustle, that's no cutting back. That's nothing else. So that's pretty sweet.

[Joshua]

Yeah.

[Ken Coleman]

So the Point is, is we're not even putting you into this timeline that you got to move to California in five years. What we're trying to do is address your faith fear that you're never going to have enough to live the life you want to live. My friend. You're in great shape.

[Jade Warshaw]

Wonderful.

[Ken Coleman]

You need to take a deep breath. You need to take those fears to somebody else besides us, talk through them. What's the source of it? No, I'm serious. Because it's okay, man, but it's so huge. Jay was right to just lay these fears out on paper, very specific, and just see how silly they are or how serious they are. Because sometimes they are justified. So you're in good shape, young man. Thank you so much for the call. You're way ahead of most people your age.

[Dave Ramsey]

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[Ken Coleman]

All right, let's go to Washington D.C. next, where Angela awaits. Angela, how can we help?

[Bianca]

Hi. Thanks for taking my call. So I kind of have a twofold question. My husband and I have great jobs and we're in Baby Step 7 Huge Dave Ramsey fans. My question is, I want to be a stay at home mom. But it's walking away from this high income job worth it? And if so, in the meantime, what do I say for. What else do I do to prepare for this?

[Ken Coleman]

Okay, yeah, let's walk this thing back. So when would you leave? If you were to leave, how long from now?

[Bianca]

Well, I don't have a time frame. I'm thinking September, but of course, like whenever God tells me to. You know, we've been praying into it and stuff like that. So what's your.

[Ken Coleman]

What's your reason? What's your reason for walking Away. I know. Stay at home, mom. But what. Give me something specific.

[Bianca]

My girls, they're five and seven. You know, I don't care to bring them to before and after care. I want to be there on field.

[Ken Coleman]

Totally get it.

[Jade Warshaw]

Totally get it.

[Ken Coleman]

The greatest reason in the world that helps me, though, because I. My. My job here is. Yeah, well, here's what we want to do. We want to help you get to a place on this call call or shortly thereafter where you can make a decision. It's not for us to tell you. That's why I asked that question. That's the greatest reason in the world. How much do you make?

[Bianca]

Right. 300K.

[Ken Coleman]

Okay. And how much does your husband make?

[Bianca]

178.

[Ken Coleman]

Okay. And so you're in baby step seven. What do you. What do you guys have? What does your retirement portfolio look like? I'm looking for a number.

[Bianca]

So net worth right now is 3.1 million.

[Ken Coleman]

Fantastic. Great job. So you're going to go down to 178 when you walk. And my guess is, smart as you've been, you guys are still going to have plenty of margin.

[Bianca]

Oh, yes. Yes.

[Ken Coleman]

How much margin?

[Bianca]

Thank God. Yep. It's about 2,500amonth.

[Ken Coleman]

Fantastic. I'm having a hard time finding any real reason.

[Jade Warshaw]

You probably just feel like, pressure of it.

[Ken Coleman]

Well, that's what my next question was going to be. Is, is this because you're afraid that. What if I want to come back and I might be throwing something away? Is it that? Or is it fear of what other people are going to say?

[Bianca]

I don't think it's fear of what anybody else is going to say because, you know, with my. My husband and I always joke with him inside the house like, we are the Joneses. Right. Because I. Our standard is different. Right. We're content with what we have. So I don't care what anybody else says. I see it as a badge of honor to be able to do that with my kids.

[Ken Coleman]

Absolutely. So what's causing.

[Bianca]

My husband and I grew up in poverty. My husband and I grew up in poverty. Right. I never dreamed, and he never dreamed that we'd be making this much. Right. And so would it be foolish to step away and.

[Taylor]

No, not.

[Ken Coleman]

No, not at all.

[Jade Warshaw]

Because it's your definition of success.

[Caller/Guest]

Yeah.

[Jade Warshaw]

It all has to do with your definition of success, your definition of importance, where you place your values of importance. It all has to do with that. And some people do. Their values are in their job and what they generate and their income and their productivity and all that stuff in the workspace, and other people, their values are centered in other areas in their. That is totally okay. Okay, I'm. I'm going to give you an example. Have you seen the movie the Devil Wears Prada?

[Ken Coleman]

I have.

[Bianca]

No.

[Caller/Guest]

No.

[Bianca]

I have kids, 5 and 7. I don't. I don't watch.

[Ken Coleman]

I got it.

[Jade Warshaw]

You got to watch it. But in the. In the movie, she has this amazing job that, quote, a million girls would kill for. She's making. She's. She's in proximity, she's making money, she's doing her thing, and she doesn't like what it's doing to her home life. She doesn't like what it's doing to her relationships around her. And so she sacrif. And people think she's crazy for giving up this dream job, but for her, her values are placed in other places. That's all I wanted to tell you is it's totally okay. Success for you means you're there with your kiddos. Yeah, that's fabulous.

[Ken Coleman]

Let's rewind to your real fear here, which is, we grew up in poverty. So the fear under there is will I. So the question. I'm making this up, but the question that comes with that reality is, will we have a enough? That's a question that is constantly rotating in your head because of your backwards. Okay, great. So here's the deal. So we have to reframe the question. And so instead of allowing the question to be will we have enough? Now we know we'll have enough. Like your confidence. When I asked you what will your margin be, it was awesome. You literally went like this. You went, oh, 25. Like, you're so.

[Bianca]

I was prepared.

[Jade Warshaw]

I mean, you find the numbers in

[Ken Coleman]

advance, but I'm praising you and I'm pointing out to you your confidence. When you weren't thinking about that question, you just, boom, we're fine. So now the new question is, what is enough? And so before you make this move, you write that out, what is enough? And it's like, what we have is enough. We are the Joneses, to use your phrase. What is enough is that I get to be mom to my 5 and 7 year old. That's a enough.

[Bianca]

Yes, it is.

[Taylor]

It is.

[Bianca]

That's where my importance is. God has gotten that out of me the past year and a half.

[Ken Coleman]

So my point is, broke. You're making a great decision. You're making a great decision. And here's the deal. Those girls are going to be 15 and 17. In a whisper of a moment, I'm telling you, I'm on the other side of it. I'm ahead the of you. Okay. I got. My middle one's going to college in three months. My youngest has got two more years. I don't even know how that happened. Okay. My point is you'll never get this time back. You can always get back in and make more money.

[Bianca]

Right? Right. It's just, it's just so much. Right. And it's like, what else haven't I thought of to do it? Well, it's good.

[Kathy]

Yeah.

[Ken Coleman]

Have you allowed yourself to picture what a day is going to look like? Let's, let's just assume that tomorrow, you know, you're out, you've checked, you're done.

[Bianca]

I'm decluttering my house. I'm decluttering my house and I am going to exercise.

[Jade Warshaw]

Oh, I love that.

[Ken Coleman]

Great. What are you going to do with the girls? What are you going to do on the first Monday when you aren't working and it's summertime and you realize I don't have to go in today. What are you going to do with the girls?

[Bianca]

We're going to go on walks. We're going to go to the park. Depends on how old they are. Like we're going to go find something to get into or maybe we'll travel. Travel? I don't know, go visit family. I haven't really decided. Summers.

[Jade Warshaw]

I love that for you. I love that so much. You're gonna cook meals, you're gonna, you're gonna take care of yourself, man.

[Bianca]

My husband wants to be. Wants me to be a stay at home mom like everybody wants me to.

[Ken Coleman]

Oh my gosh. What are we waiting on? Why are we even waiting till September?

[Jade Warshaw]

She just needed permission.

[Ken Coleman]

Yeah.

[Bianca]

The chain of 300,000.

[Jade Warshaw]

Well, listen, it sounds like all the handcuffs.

[Ken Coleman]

Well, by the way, that's real.

[Bianca]

It is.

[Ken Coleman]

By the way, that's why that phrase came about and why it has stuck in culture so long. Because it really adequately describes the psychological situation when somebody is thinking about doing what you're doing. It almost feels stupid, doesn't it?

[Bianca]

Yes.

[Ken Coleman]

Yeah, I get it. But what we got to do is. I know. Well, I hope we helped because we have to reframe. The reason I asked you what the first Monday looks like with the girl when you're done is because that's what you have to reframe around. That's what you're deciding on. You're not deciding on being stupid and walking away from 300,000. You are deciding to make unbelievable Memories that when it is all said and done, long after you stop working, you are dreaming and fantasizing on the past, the good old days. And when you go home, you are in the middle of the good old days.

[Jade Warshaw]

Come on, Ken.

[Ken Coleman]

So that's. Listen to that. That.

[Jade Warshaw]

That's joy.

[Ken Coleman]

That's kind of what we wanted on this call. So, Angela, you didn't need our permission. I think that hopefully you see this now as not a dumb decision, but maybe the smartest decision you'll ever make.

[Bianca]

Yeah, that's powerful. Okay, well, thanks for. Thanks for walking me through that.

[Ken Coleman]

Yes, ma'.

[Bianca]

Am. And help validating something.

[Ken Coleman]

You're awesome.

[Bianca]

Very much.

[Ken Coleman]

You're an awesome mama. And boy, you'll never, ever, ever, ever, ever regret making the move that your heart's telling you to make. That I'll stand by. And I'll fight with anybody on that anytime. Listen to your heart. It's not just a great song by heart.

[Jade Warshaw]

Listen to your heart.

[Ken Coleman]

I knew she was gonna do it. Oh, it's such a blessing to be able to throw a bounce pass to somebody who can do something with it. There it is.

[Kathy]

This.

[Bianca]

Foreign.

[Dave Ramsey]

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[Ken Coleman]

All right. Are you aware that we have asked Ramsey what is Ask Ramsey? You ask, I'll answer. Ask Ramsey is an AI tool that's built and trained on our proven Ramsey principles. And today, we're going to break down the most asked questions from the week. And the big question kind of wins the derby as the most asked question, Jade, is how do I determine the appropriate amount Amount and type of life insurance that I need.

[Jade Warshaw]

Wow. Well, first off, I love people are thinking about this and the Ramsey principles do make it simple. When you go on Ask Ramsey, it's going to get straight to the point. They're going to say term life only. That's all you need. That's what we would say here on the show. You need a term of about 15 to 20 years. That's what we would recommend on the show. They're going to say, hey, coverage amount needs to be 10 to 12 times your annual income. Which is just what we would say here on the Ramsey show. Now the reason is it's very straightforward. Your life insurance guys, it has one job. The job is to replace your income if something happens to you so that your family is taken care of. Okay. If you should be beamed up sooner than you expect. Okay. And the whole point is we want you to avoid really bad policies, things like whole life, universal life policies. And just remember, if you're a stay at home parent, you need coverage too. You need term and term life insurance insurance even if you aren't debt free. So that's the main thing here. Life insurance is not a baby step. You need to get it in place as soon as you learn about it. Ken.

[Ken Coleman]

Absolutely. So remember, Ask Ramsey can help you determine how much term life insurance you need to get from Zander based on your specific situation. Of course, you've been with us anytime. We have been partnering with Zander for a very, very long time. They are fantastic. Xander. Insurance. Insurance absolutely can help you. What they do is they actually shop all the different insurance opportunities for you to get you the best rate. I've known Jeff Zander for probably 15, 20 years. Great dude, great organization. So Zander.com is the website there and go today. You won't believe, by the way, how affordable term life is. I don't think most people, people think that life insurance is as cheap as it is.

[Jade Warshaw]

Yeah. It's in the teens.

[Ken Coleman]

Yeah. So very, very important. And you gotta do it. I remember early on when we got this, this teaching, this was many, many, many years ago and we were in our 20s, Stacy and I just newlyweds. And I remember feeling so responsible going to bed that night that if something were to happen to me, my bride, I didn't have, we didn't have kids. It was going to be okay.

[Jade Warshaw]

Absolutely.

[Ken Coleman]

And that's the key, the peace of mind to know that if something TR happens and unexpected, that after all the grief and all of that kind of stuff, that they're Dealing with. They don't have to deal with the stress of not being able to take care of themselves. That's why this is such a huge deal. And that's why, by the way, Jade, people are asking that question. They're starting to see it. So very good stuff. Kathy is up next in Denver, Colorado. Kathy, how can we help today?

[Kathy]

Yeah, thank you for taking my call. What I'm calling about is my dad's finances. He's 80 and has Parkinson's and recently had a fall, so I ended up having him in a nursing home so he'd have access to therapy. So he has, oh, close to 600,000 in checking.

[Taylor]

Wow.

[Kathy]

Yeah. And so I'm wondering if I'm overstepping my bounds to put it in a cd. I've asked him several times and his theory is he's going to get out and he's fine and he's going to go back to running his business and everything's good. So he says, nope, don't worry about it.

[Jade Warshaw]

Okay.

[Kathy]

But it's, you know, it's only earning one accounts at point zero one. One's at zero point two five.

[Jade Warshaw]

You have power of attorney?

[Kathy]

No, you know, because I'm just a kid and I don't need it.

[Jade Warshaw]

Understood.

[Bianca]

So.

[Jade Warshaw]

So it sounds like I, I have a feeling, yes, this money is of issue, but I think there's a bigger issue here, which is you've got to work on convincing him that you need more control in this situation as he's aging and hopefully as his health is declining at a very slow rate. Is was my hope here. But you said he's 80. How long has he had part Parkinson's?

[Kathy]

He's had Parkinson's for probably 25 years. His mental state since this fall has deteriorated and he. Yeah, I'm the only child, so I don't have like anybody else to kind of bounce ideas off of.

[Jade Warshaw]

What about his home?

[Kathy]

That's his previous home. Yes, it's quite right.

[Bianca]

Rural.

[Kathy]

And so I had originally thought I would try moving him home this summer when the weather wasn't going to be an issue. But last time I talked to him here this morning, he thought he was in a hotel.

[Ken Coleman]

So what is his retirement accounts like? What does he have there? I know he's got 600k in checking. What does the rest of it look like?

[Kathy]

Most all of it's in CDs. And honestly, I'm, I would have to

[Bianca]

go look all those up.

[Kathy]

I'm not 100% sure my names are on the checking accounts. So I can write checks.

[Jade Warshaw]

Can you just move the money and not. I mean, I. I'm not saying I would move it to a cd. I'd probably just put it in High Yield Savings Account. But can you.

[Kathy]

Okay.

[Jade Warshaw]

Can you move that? You. Yeah. Your. Your name is on the account. I honestly. I might just go ahead and do it. He's going to be none the wiser, and it's for his benefit. I probably wouldn't go as far as to invest it because I feel like he needs. He would need to sign off on that.

[Ken Coleman]

But he has more than 600,000. Is what I'm trying to understand. Correct?

[Bianca]

Yes, yes.

[Kathy]

Yeah. He's.

[Ken Coleman]

What's his worst.

[Jade Warshaw]

I mean, if you had to guess.

[Kathy]

Oh, including land.

[Dave Ramsey]

Yeah.

[Kathy]

Probably 10 to 12 million.

[Jade Warshaw]

Oh, my gosh.

[Ken Coleman]

Yeah. I guess the reason I'm asking. This is. Kathy, I love where your heart's at, and I'm so glad you called us. I don't think you have to do much here.

[Jade Warshaw]

Does he have an estate plan?

[Bianca]

No.

[Joshua]

Oh.

[Ken Coleman]

Now, that, to me is the priority. You getting in charge of you taking over his finances. I think that's going to happen pretty soon anyway. He's in such good shape that I think the bigger issue is you're the only child. What kind of a will does he have?

[Jade Warshaw]

There's no will.

[Kathy]

There's no will.

[Ken Coleman]

He has to do that. That is priority number one. Not you managing his. Already managing his money in the sense that if he begins to lose all of his ability to function, you're already on the account, so you can do all that. But the guy's got 10 to 12 million out there. You need to get a will while he's still coherent.

[Jade Warshaw]

Yes.

[Bianca]

Okay. Okay.

[Ken Coleman]

That's priority number one. You know what's going to happen. Jade, tell him. Tell her what happens if. If he passes and there's no will.

[Jade Warshaw]

There's no will. It's going to go through the courts, it's going to go through probate there. It's just going to take forever. And you don't know how all of this is going to get divvied up. I mean, you're the only child. But I don't know what else is going on.

[Ken Coleman]

I don't know if there's anything. If he's got a stepbrother and everybody comes out of the woodwork.

[Jade Warshaw]

Yeah. This is scary to me. I. This is something I would be dealing with this weekend.

[Ken Coleman]

Not this weekend, like. Well, you're hanging up the phone with us and you're going to See, Dad. Okay, now listen, you know how to talk to him, okay? But you've got to be asking him questions like, hey, dad, do you have an estate plan and things of this nature. And that's not going to be fun to talk to because he's thinking about getting out. And last thing he told you, I'm coming back to run my business and all these things.

[Jade Warshaw]

You know what I might do? I might call up a lawyer and find somebody that will. Will take this on and that will go with you to him.

[Ken Coleman]

Great.

[Jade Warshaw]

And kind of work, you know what I'm saying? So your dad doesn't have to go anywhere. You could almost, almost start wrap. Wrapping this up. So I would get with the lawyer. I'd say, here's the situation. We need to get this done. He's not going to come to you and, and try to knock, knock out and let him get, you know, the gist of the situation in order to get that started.

[Bianca]

Okay? Okay.

[Kathy]

All righty.

[Ken Coleman]

But I would, I would say this. I'd start with a question with dad. Hey, dad, what's your plan? What? What is your plan? And maybe you've already had this conversation, have you?

[Kathy]

Yeah, to a certain degree. And yeah, he. He's gonna get out and everything's gonna be fine and he's.

[Ken Coleman]

I understand. I meant like, dad, what is your plan upon you passing.

[Jade Warshaw]

Because that.

[Kathy]

I don't think he thinks he's gonna. That's gonna happen.

[Ken Coleman]

Wow. Well, no, that's.

[Kathy]

I don't know how he's figured that one out because, you know, nobody else has.

[Ken Coleman]

Nobody else has gotten out of the steel alive. That's true.

[Kathy]

No. No.

[Ken Coleman]

Well, Kathy, not sure that's a tough one, but this has got to be the sweetest, kindest, most respectful nudge.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You. There's no one else to do it. And trust me, this is not going to be near as painful as what it will be if you don't get this handled. I can assure you of that. Oh, we've had a blast on. On the road, taking the Ramsey show out on the road to see all you fine folks. We have two down. We did Charlotte and Denver. Jade and I were out with John Deloney in Denver just last week and we're about ready to head out next week to join Rachel Cruz. It'll be Rachel, Jade and myself on April 21st in Phoenix. And we have a few seats left. Not many, but a few.

[Jade Warshaw]

Few.

[Ken Coleman]

And it's your last chance to snag those. It is a live Q and A, so it's the show. And instead of phone calls, we got people in the room standing up at mics asking us questions. We have a lot of fun. The energy in the room is absolutely amazing. So if you're listening to us or watching and you're in the Phoenix area, we'd love to see you April 21st. Go to ramseysolutions.comevents ramseysolutions.com events and get your tickets. Going to be fun. Are you, are you going to be enjoying any Phoenix food or sights and sounds? Have you thought that far ahead?

[Jade Warshaw]

You know, if I could, I would try to get to a basketball game.

[Ken Coleman]

I know. We already checked on that.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Unfortunately, Sons will not be in town.

[Jade Warshaw]

That comment.

[Ken Coleman]

I know. We would have been there. Will we absolutely would have been there. So anyway, it's not going to happen. Leslie is joining us in San Diego, California. Leslie, how can we help?

[Kylie]

Hi there.

[Bianca]

So I'm looking for financial advice about had a lot of major changes in my life over the last couple of years and the most recent one has actually led me to a housing issue where I'm not sure if I can even afford housing sticker shock at this point. And just I have family and friends who are giving me advice and options and different things to do and I'm just not sure what is really the best option for me.

[Ken Coleman]

Okay. Maybe walk us through these options that you're getting all this advice on.

[Bianca]

So one is, is all of this kind of plays into I was doing the baby steps before all of this happened.

[Jade Warshaw]

Oh, before all what happened? Take us back.

[Bianca]

So my mom passed last month.

[Jade Warshaw]

Oh, I'm sorry.

[Bianca]

And I was living with her, helping take care of her.

[Dave Ramsey]

Oh.

[Bianca]

So I was on baby step two, paying off all of my debt because I, a couple years prior I was in a car accident and I got a settlement and I, my coworker worker was like, hey, our job pays for this. Do it. See what it says. And before you do anything with money. So I started the, you know, the dates are in the baby step final planning and everything. And I was on step two. And then my mom got sick. Cancer. Sorry. So I, it's funny, a week after she was diagnosed, I watched a video of your guys's and all of them had said in, in the instance of cancer, drop everything in safe. So that's what I started to do because I wasn't sure what to do next. And I was focusing on taking care of my mom. But she's now passed and I can't afford the place that I was renting with her. And frankly, I don't. I wasn't expecting the cost to be so close to what I'm paying now on my own for a studio compared to what we were renting.

[Dave Ramsey]

Sure.

[Bianca]

Okay. So I, I have been looking for different options and you know, there are different things. So I saved some money, about $13,000 in cash over the last couple of months to try and get an essay to figure out what I want to do. I have. They're not blood related, but they're family and they, they have offered to help me buy a home and I would pay them back.

[Ken Coleman]

No.

[Bianca]

Which makes me nervous because rightfully so, I don't want to ruin the relationship.

[Jade Warshaw]

Absolutely. Go with your gut.

[Ken Coleman]

So take that off the list, shall we? Can we just delete that?

[Taylor]

Okay.

[Bianca]

And then what's next? So I have been looking at housing and I'm about 600, $800 short on just basic cost, whether it is rent or, you know, estimated utility cost. I do have a car loan, which is pretty, pretty, pretty high. I mean, it's not too bad at $21,000, but the monthly payment on it is about 600amonth, which is, which is roughly what I'm short. Yeah, yeah, I have, you know, like I said, I've saved up $13,000, so I can take a good chunk out of that and try and refinance it again. And that, that was a thought. And I, you know, continue to try and save between now and when I have to leave where I am.

[Jade Warshaw]

What about.

[Bianca]

But I just.

[Jade Warshaw]

When do you have to leave where you are?

[Bianca]

Two months to find a place.

[Jade Warshaw]

Okay, two months. What about. Because you're, you're getting back on your feet and I'm going to ask you in a minute what type of work you're doing, but have you considered someplace where you have a roommate? Because you've just been in a roommate situation and you were able to. It was tenable for you. So what if we find another roommate situation temporarily while you're able to get career back up and going and all of these things. Things pay. Maybe pay off this car or sell off this car.

[Bianca]

It is crazy that a small 300 square foot studio apartment is the same cost as a roommate.

[Jade Warshaw]

So then why don't we do a small. So if what you're saying is I'd rather have a studio apartment than a roommate and it's the same price, that's fine.

[Bianca]

Yeah. So that originally I was like, oh, if it's cheaper, I'll do a remain. I mean, I don't have anyone I can do it with. But I'll, you know, there, there are ways to find people, you know, kind of a thing. But the price is, you know, minimal. Like a hundred dollars difference maybe.

[Jade Warshaw]

I mean, do you have to stay in that area? Do you have to stay in the area that you're in? Because it sounds like your area is super expensive.

[Bianca]

So that, that is leaving the area that I'm in.

[Ken Coleman]

Okay, so let's get real numbers.

[Bianca]

Stay in the same neighborhood. That that number would be like 3,000amonth.

[Ken Coleman]

Okay.

[Bianca]

But what's a 1:30 minute in one direction or another gets me closer to

[Jade Warshaw]

what are the prices?

[Ken Coleman]

What's the one bedroom studio going to cost you?

[Bianca]

A one bedroom studio about 20 minutes from where I am now is between 1695 and 2100.

[Jade Warshaw]

Okay. What's keeping you in the area where you are now?

[Bianca]

My job. So I do work for a construction company and my Radius has been 30 minutes from that job.

[Ken Coleman]

Okay. I'm going back here because there was so much floating around. The $1600. I'm taking the lowest number you just threw out at us. 1695. Okay. That's your saying if you got a roommate for something bigger, it would be the same amount. Did I understand that right?

[Bianca]

Yeah.

[Ken Coleman]

Okay. Is the 1600amonth, is that putting you 600 bucks but behind

[Bianca]

about. Yeah.

[Ken Coleman]

Okay.

[Bianca]

So when I factor in utilities. Yes.

[Jade Warshaw]

So we got to get out of this car. That's what I'm thinking.

[Ken Coleman]

Yeah. Because with the $600 in the car payment obviously make a massive difference for you. Correct?

[Bianca]

Yeah. So I.

[Ken Coleman]

You'd still be scraping in my bank account. You What?

[Bianca]

I have 13,000 in my bank account.

[Jade Warshaw]

Uhhuh. Tell us. Okay.

[Bianca]

I have been essentially hoarding while we figured out what was happening with my mom.

[Jade Warshaw]

Great. I want, I want to get some real numbers from you before we run out of time. First off, I want to know what are you earning from this job?

[Bianca]

Before taxes? 62,000 a year.

[Jade Warshaw]

Okay. What does that look like? What do you take home every month?

[Bianca]

My net is about 3,000. I am putting money into a 401k.

[Jade Warshaw]

And there we go. We need to pause cause that. I think that we need to get you familiar with the baby steps. And we're going to make sure you leave with every dollar and everything that's connected to it, which is the. Our Ramsey plan. But what I'm getting, what I'm trying to get you down to is a foundational spot. We need all of your income at your disposal. If we were to do the following things. This is going to work for you if we pause retirement, because kind of like what you said with the cancer deal, you kind of paused and you. You stuck. Stacked up money until it was. Was time. It's the same thing with investing. You're not in a place that you're ready to invest yet. So it's temporarily pause it, get that money back in your pocket. How much money would that be back in your pocket?

[Bianca]

Let's see, it's 6%, so about 200 each paycheck.

[Jade Warshaw]

There's. Well, we're at $400 already. And what I would do if I were in your shoes, that $21,000 cost car, I would look and see what it's worth. Hopefully you're not upside down. I would go on Kelley Blue Book tonight, see what it's worth, Private sale, and I would sell it, and then I would use the $13,000 that you have, and I'd maybe use, I don't know, 8 or 10, and I'd buy myself a car in cash. And now you've still got a little bit of money there that if you have other debt that you need to clear out, you can start using that for other debt. And I keep $1,000 saved. That's what I would do because now you've got the $600 back in your pocket every month, but plus the $400 from investing. I just found you $1,000.

[Bianca]

Okay.

[Jade Warshaw]

Why are you not excited about this? That's a lot of money, girlfriend. I just broke you free.

[Bianca]

It's so my job matches my 401k. So that's why I.

[Jade Warshaw]

You'll be able to do that later. Remember, this is just temporarily. I want you to have the money that you need to get in a situation where you can find some stability, get your legs underneath you. And now you're not feeling like you're in crisis mode. And when that happens, you'll be able to find ways to build up your income. And eventually you'll be able to invest again. And that match will still be there waiting for you when you need it.

[Ken Coleman]

Welcome back to the Ramsey show in the Fair Winds Credit Union studio alongside Jay D. Warshaw. I'm Ken Coleman. So excited to have you with us today. 888 825. 5225 is the phone number. We start off with Joshua in San Francisco. Joshua, how can we help today?

[Caller/Guest]

Hi.

[Joshua]

I've got about $80,000 in tax debt and 50,000 in credit card debt. And I'M wondering if I should file bankruptcy and just kind of start over.

[Ken Coleman]

What's your income?

[Joshua]

70,000. And then combined with my wife's like around 100,000.

[Ken Coleman]

Okay, and that's your total debt that you just gave us?

[Joshua]

Yes.

[Ken Coleman]

Okay. What is your mortgage or your rent?

[Joshua]

Rent is 2200.

[Ken Coleman]

Okay. What's your take home number every month?

[Joshua]

Take home for me is probably like 4400. And for my wife, is she. Her job's a little bit seasonal, she cleans Airbnb, but it's probably her around like 3,000amonth at least on average.

[Ken Coleman]

Okay, and what's making you think that bankruptcy is the only way out of this?

[Joshua]

Because it just seems like such an insurmountable number. And now the taxes are like, racking up interest and penalties, and the credit cards are. You know, I used to be able to do balance transfers and kind of keep it under control, but it's just gotten out of control. And some now, you know, it's just high interest. I can make the minimum payments, but just seems like I'm never going to be able to pay it off.

[Ken Coleman]

Sure. What do you do for a living?

[Joshua]

Maintenance tech for apartment buildings.

[Ken Coleman]

Okay, and what does your wife do?

[Joshua]

She cleans airbnbs.

[Ken Coleman]

That's right.

[Joshua]

And does some caregiving.

[Ken Coleman]

Okay, I'm going to start right here and go right to what I think is one of the key things we need to address today is what is the amount of income after taxes? If Jade and I could just put it into your account today. Okay. What amount of money would allow you to start making progress and feel like you're actually getting momentum?

[Joshua]

You mean like, how much money?

[Ken Coleman]

Let's just assume I'm giving you extra income after taxes every month. I'm asking you, do you know how much money money extra a month? If I gave it to you in payments, what would make a huge difference for you where you go? Not only am I taking care of it, but I'm actually starting to knock this debt down. I'm making progress. I see momentum. What's that number? Additional income?

[Joshua]

I mean, if it's 150 or 130 grand total,

[Caller/Guest]

I don't know.

[Ken Coleman]

Like, that's the problem. You see what I'm saying? That wasn't a trap question. But I don't think you're on a budget, am I right?

[Joshua]

Correct.

[Ken Coleman]

So the reason I ask you that is because that's part of the issue. Your wife needs to be working at minimum, 40 hours. Seasonal work for people who are broke and are worrying about bankruptcy is not an option. There is no seasonal work. You work in every season. You're working 60 hours a week for a season. Right. You said that like, that's interesting, but like, you didn't believe me.

[Joshua]

I mean, we have a 14 year old. I've, you know, I've encouraged her to get more of a regular job for many years.

[Ken Coleman]

Why are we talking about the. Yeah, but the 14 year old is self sustaining. The 14 year old can let themselves in from school. School. I've. I've raised three kids. My youngest is 18. Now, I'm not worried about the 14 year old. That's an excuse. Why isn't she making more money?

[Joshua]

I'm just telling you where she's at.

[Ken Coleman]

She, I get it, but she's like

[Joshua]

resentful of the fact even that she has to work at all.

[Ken Coleman]

Well, that's a problem. But I'm tr. You called us for financial advice and you guys need more income. So let's shift.

[Caller/Guest]

All right?

[Ken Coleman]

I can't solve the marriage problem. I can't solve that issue.

[Jade Warshaw]

But I can tell you this. I can tell you $3,600 changes your life without question. $3,600 a month.

[Ken Coleman]

So let's shift it to you, okay? Because she's resentful for working and you're calling us. She's not on the phone. So with the skills you have, can you pick up overtime or go to a second job? And what this basically means is roughly 2,500 bucks a month, or even 2,000 bucks a month would make a big difference. Can you do that, Josh?

[Joshua]

I could, yeah.

[Ken Coleman]

Well, that's our.

[Joshua]

I've worked, I've worked two jobs, many points in my life.

[Ken Coleman]

Great.

[Joshua]

But still, like, so say I came up with an extra three grand a month to pay down this debt. That's. Even if I'm putting every dollar of that, that's 36 grand a year, it would still take me, what, five years? Four or five years.

[Jade Warshaw]

Take you between three and four years if you go intensely to pay this off.

[Joshua]

Right. So my question is, as an alternative to that, what if I just filed for bankruptcy, got rid of as much of this debt as possible?

[Jade Warshaw]

What if I told you. What if I told you I spent seven and a half years paying off $460,000 of debt and I didn't file for bankruptcy?

[Joshua]

I think that's awesome. I'm just kind of. I'm older now.

[Jade Warshaw]

Why are we different? How old are you?

[Joshua]

I'm 47, bro.

[Ken Coleman]

Don't be bringing that to me, I'm 51. You're not old.

[Jade Warshaw]

Here's here. And here's why.

[Ken Coleman]

Here's.

[Jade Warshaw]

Here's why. When you file bankruptcy, the control goes out of your hands.

[Ken Coleman]

Yeah. Do you understand what it looks like? I don't think you do. Go ahead, Jade. Paint the picture.

[Joshua]

No, not exactly.

[Jade Warshaw]

They're going to decide. They're going to make all the decisions. Depending on which chapter you file, they're going to make all decisions. They're either going to say, hey, we're going to put you on a payment plan, which is honestly something you can do yourself. They're going to look at your assets and they're going to say, we're going to sell off these assets and these assets, and we're going to put that towards the debt. That's something that you can decide to do for. For yourself. It's going to tank your credit. That's something that's already happened or going to happen anyway. Do you see what I'm saying? So why relinquish control when you have the opportunity here to go, okay, I can look at my assets. I can determine what I want to sell off, when I want to sell it off, how I want to sell it off. I can look and I can call the IRS and I can say, let's get on a payment plan. Here's how much I can put towards it. And that's. That's what I want to. To retain for you is the dignity of being able to make your own choices and not them come in and have your stuff sold out from under you and all the choices made for you. That's what I'm trying to save you from. I've never experienced bankruptcy. Dave Ramsey has, and he would sit here and tell you, you can work your way through this. And I'm telling you, from my experience of paying off debt the next four to five years, they're not going to be fun. I can tell you that right now. It's not going to be something that's enjoyable. There will be enjoyable parts of life, but working two to three jobs is not going be the enjoyable part. But what is going to feel good is knowing that you made some mistakes, you made a bit of a mess, but you're also the same person that can turn back around and clean it up. There is dignity in that. And there is something. There's a confidence that's built in that. And I can tell you on this side of it, if you allow yourself to walk through that, you're going to come out of This a completely changed person and guaranteed better for it. Guaranteed. Ken.

[Ken Coleman]

Oh, there's no question. I think Joshua, what we're hearing is guy who feels like he's ready to give up. You called us going, I think this is my last shot. This is the Hail Mary. The clock's ticking down and I only have a 55 yard pass and I hope someone catches it. And I think it's bankruptcy and we're telling you that's not the case. You got to believe. I do tell you you've got a marriage issue. You guys got to get on the same page. I get that you don't want to do it, but I think you guys are in the have to stage. You're past the one to.

[Dave Ramsey]

Alright, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near [e-mail] agent that's ramseysolutions.com.

[Ken Coleman]

If you're working the baby steps, the best and fastest way to do it is by using EveryDollar. It's more than just a budgeting app. The plan is built right in. You can track your progress plus get personalized recommendations and coaching for your situation. It's like having one of us walk with you every day showing you the next right step. You can start every dollar for free by downloading it in the app store or Google Play Play. All right, let's get to Alex right here in our backyard in Nashville. Alex, how can we help today?

[Caller/Guest]

Hey guys. Me and my wife are recently married. We have a 10 month old. We're about $35,000 in combined debt. I make about $84,000 a year before tax and she recently started doing photography and that's bringing in kind of a slow passive income. We have about $13,000 saved and I'm about to receive a $10,000 bonus. So we're just trying to figure out how to navigate this debt.

[Jade Warshaw]

Okay, $10,000 bonus. I was just writing everything down. When do you get the bonus?

[Caller/Guest]

I also, I was supposed to get it this past paycheck but I work for the government so there's no telling. It could be next paycheck or three months from now. So I'm not super depending on that right away, but I was wondering what the best course of action would be to do with that. I also recently found out that I have a pension from an old job that I have that I didn't know about. And I have to decide what to do with that.

[Ken Coleman]

How much?

[Caller/Guest]

Well, there's about $13,000 in that. And when I called them a week ago, they said that I can leave it in that fund for up to five years after separation from that police department, and it'll grow at a guaranteed 5%. Or I can transfer it to my new retirement, or I can withdraw it and take a penalty.

[Jade Warshaw]

I would transfer it to retirement. I would not pull it out. It's if, if it's retirement funds, I'd keep that retirement fund at this point because the penalty will be what? Not just that you're taxed on an income tax, but will there be a 10% penalty?

[Caller/Guest]

I believe she said it was 20.

[Jade Warshaw]

Oh, yeah, we're keeping that locked in. So, yeah, I would do. If you're able to do a direct transfer, Rollo, and just roll it over to an ira, I would do that. So let's take that. Let's take that money off the table. So we've got the 13,000 saved. We've got a $10,000 bonus that's coming at some point. We don't really know exactly when. So that gives us, in theory, 23, but today just the 13. So are you familiar with the baby steps?

[Caller/Guest]

I am.

We're on baby step two. Been on it for quite a while. We spent the last two years paying off about $80,000 worth of private student loans.

[Jade Warshaw]

Oh, wow. Very good. Very good. Good. So this 35,000 is just the tail end. What kind of, what kind of debt is it?

[Caller/Guest]

18 of it is government student loan for me. 3 of it is a government student loan for her. 3 of it is a credit card that she had before marriage. And Am I missing any?

[Jade Warshaw]

Yes.

[Caller/Guest]

Oh, sorry. About 11 of it is a vehicle.

[Jade Warshaw]

Okay. Okay. So. So yeah, I'm going to look at this and I'm going to reverse engineer it, and I'm going to say, how quickly do I want to pay off this $35,000 of debt? And that's going to inform how hard we work going forward. Is that fair enough?

[Bianca]

Yeah.

[Jade Warshaw]

So I don't know if you've gone into every dollar, but in every dollar there's a really cool feature in there. It's a financial roadmap feature where you can basically go in, plug in Your numbers. And it'll say based on what you're doing to today, here's how quickly you can pay this debt off. So my question to you is, how much margin do you have to throw out this debt every single month?

[Caller/Guest]

Well, we just recently sat down to do a complete overhaul of our finances. And I would say currently like excluding her photography, maybe 500amonth.

[Jade Warshaw]

Okay, 500amonth. So you brought up the photography. I want to actually talk about the photography because I think that's part of you guys breaking this thing free. You didn't include include it in your $84,000 of debt, which makes me think there's not a whole lot. I'm sorry. In your $35,000 of debt, which makes me think that there's not a whole bunch of money being made from that. How much is she bringing in every month?

[Caller/Guest]

Well, she started it two months ago and she initially was booked out every weekend for a month and she did all those shoots for free and now she's doing shoots for about a hundred a shoot and she's doing usually two a day. Friday, Saturday and Sunday.

[Ken Coleman]

Yeah, I want to go back into the numbers here. You have a car loan for $11,000. What's the payment on that? Every month?

[Caller/Guest]

It's about 500. I wanted to. When we got married, we talked about just selling it and getting something cash. Unfortunately, there's some damage to the vehicle.

[Ken Coleman]

Alex, I don't know why we're not talking about the $13,000. You said you're walking the baby steps. Well, if you're in the baby steps, you shouldn't have $13,000.

[Jade Warshaw]

12 of that has to go.

[Ken Coleman]

You should have 12,000 at your disposal today. And if it's me, I'm going to pay that car off. I know that's not the smallest debt that you have, or maybe it is. I can't remember what the number, but

[Jade Warshaw]

it's got 3,000 in credit cards and 3,600.

[Ken Coleman]

I don't know if you're okay with that, but I'm going to pay that car off and get that $500 a month back and that's going to take care of that credit card payment fast. I'm not sure why we aren't paying the car off.

[Caller/Guest]

Well, the reason that we had so much saved is because originally we were living with my family and we didn't know how much money we needed because we're first time parents. So we'd saved it up. And then I just didn't know the best way to no shame at all.

[Ken Coleman]

I'm just saying, you know, I'm not cracking on you. I love that you've been responsible. I'm just saying that's $12,000 you have

[Jade Warshaw]

to, to tackle this stuff, you know, at this point. Yeah, if you wanted to pay off the car first, fine. If you wanted to do typical Babel, you know, debt snowball method, knock out the credit card for 3,000, knock student loan and then come back and hit the car, that's fine. The point here is you've got $23,000 to pay off. And how quickly can you do that? If you throw 2,000amonth at that, you're done in six months. Right. If you throw a thousand a month at it, you're done in a calendar year. Right.

[Ken Coleman]

And if a wife goes to work Jade full time and still does the photography part time, we're only talking about a season. We're not telling her to shut the dream down. Just go get a $30,000 job or something and boy, we're out this of quick real fast.

[Jade Warshaw]

Right, but you guys are going to have to. I think this is your first encounter with kind of like that sacrificial lifestyle and you're going to feel it. Well, you're either going to feel it in time, you're going to feel it in your wallet, you're going to feel it in the things that you wish you were doing with your money instead. The things that you wish you were doing with your time instead. Because I can guarantee you this can. Nobody likes a side hustle. No, nobody likes working extra hours and nobody likes doing it for 12, 12 months. So we'll go ahead and get. That's a gimme. We'll tell you that, that, that's the truth. But if you're asking us, hey, how do we do it? That's the method. You keep a thousand dollars saved as baby step one. You take anything else that you have saved and you apply it to your debt using the debt snowball method. That's smallest to largest by balance, you knock them out and then from there on now you're on to being able to take that money, save up three to six months of emergency funds. But baby step two is the kicker because that's where the sacrifice, sacrifice lies.

[Caller/Guest]

Right.

[Jade Warshaw]

What are your thoughts?

[Caller/Guest]

No, I mean that's exactly what I was looking for. I guess I was just kind of looking for the green light to go ahead and just dump the 12 and keep the 1,000 saved. And I really wanted clarification on the pension as well. And yeah, I guess I'll just move that over to my current retirement instead of throwing it at the debt.

[Bianca]

Yeah.

[Jade Warshaw]

Because it's, most of it will get sucked up anyway if you do this. If you said there's a 20% penalty, you'll be taxed on your, your income tax. Yeah, I would not touch that. Please just roll that over and make sure your wife's on board with this.

[Ken Coleman]

Yeah. What are you doing for a living now?

[Caller/Guest]

Federal law enforcement.

[Ken Coleman]

Yeah. Are you able to pick up, you know, part time work, you know, in

[Caller/Guest]

that I am not. But the nice thing is I have guaranteed salary increases. So in October of this year, I'm going to get a $20,000 pay raise in October of next year to be the same. Great.

[Ken Coleman]

Well, if your wife is willing to, just for a season, start making more money and boy, you're, you guys are going to be out of this. I, I'm going to tell you right now, we've heard too many stories. So I'm going to challenge you to be out of debt in 10 months.

[Jade Warshaw]

I think you totally have that in the bag.

[Ken Coleman]

That's, you know, I, I, I, that's going to require again, sacrifice and stretching, you know, as far as more work. But I, I think you guys can do that.

[Caller/Guest]

Yes, sir. I appreciate you guys.

[Ken Coleman]

Yeah, appreciate you. Thanks for all you've done to serve our community and, and, and our country. That's great. You know, this is very interesting. You said something that I wanted to bring back to you to young couples that are out there listening and they're new to this.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You said this is your first time. You're talking to Alex, you know, and his wife. It's your first time reaching this thing where we've got to come together and sacrifice. And you and Sam have always been the model of that. Encourage young couples.

[Jade Warshaw]

Yeah. This is good for your marriage. Whenever you can lock arms, whenever you can band together and gang up against the things that, that's trying to horn in on your marriage, your life, your relationship, your dreams for each other. That is so solidifying. And what you get the opportunity to, to prove to each other is I can count on you and you can count on me. If Sam says he's going to do it, he does it. If Jade says she's going to do it, she does it. That is the best thing. It builds trust and security in your marriage and wealth.

[Dave Ramsey]

Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, ask Ramsey is here to help. It's fast, simple and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com.

[Caller/Guest]

All right.

[Ken Coleman]

Our Ramsey Show Question of the day is brought to you by Y Refi. Defaulted private student loans can leave you feeling stuck and overwhelmed. But why Refi helps you explore refinancing options with a low fixed rate and a payment based on what you can actually afford. Visit yrefi.com Ramsey that's Y R E F may not be available in all states.

[Jade Warshaw]

Okay, Today's question comes from Brooke in Alabama. My husband and I are on baby step two with about 50,000 in debt. We are also in stork mode, meaning they have a baby on the way. I love that my husband has a generous heart, but we always go over budget with tithing and gift giving and never make progress paying off debt. I suggested that we buy smaller gifts for now so that we can be more generous in the future, but he won't consider doing this. Am I being stingy or is he being too generous for our means? Okay, so I want to start by differentiating between the tithing and the gift giving. So if you're a tither, that means that you're a Christian person and you have the belief of giving 10 person percent of your earnings to a local church and it sounds like they have that belief. So I'm going to decouple that from the gift giving because if that's a, a religious value or conviction that you have that needs to be part of your budget, I would say whether you are in baby step two or not. So for most of us, myself included, even when we are in baby step two, tithe is at the top of the list. Giving is at the top of the list. We never stop tithing. I would not recommend you do that. Now if the tithe aside from the gift giving, if that is causing you to go over budget, that means there's something else that's wrong. Either there are other items in your budget that are overinflated or your income is an issue. Right, Ken? I mean that, that's what I would say.

[George Camel]

Yeah.

[Jade Warshaw]

So that would be my first. I'd put my detective hat on and I'd say, okay, are we going over the budget simply if we tithe, if we stop the Gift giving. Are we still in the red? And if that's. That's the case, we have further work to do. All right, let's talk about the gift giving side of it in baby step two. I think that you need to be very choosy parsimonious in your. In your gift giving, because generosity generally flows out of overflow, and you don't really have that. So. So I would be very thoughtful about if I'm giving, when I'm giving, and how much I can actually put towards it. Because you can't be putting yourself in the red being generous.

[Ken Coleman]

Yeah. You know. Yeah. You just can't give gifts right now. I mean, if we're not. Are we talking about your kids? Are we talking about the birthday?

[Jade Warshaw]

Exactly.

[Ken Coleman]

Are we talking about Christmas? What are we talking about? But if we're talking about, like, hey, you know, Larry. Larry's retirement. Larry's retiring. I'd like to get him a golf hit cover. It's like, no, man, you're broke.

[Jade Warshaw]

We're all chipping in for Janice. You know, she's getting Janice.

[Ken Coleman]

I can tell you who doesn't need a gift is Janice. Janice.

[Jade Warshaw]

She don't need it. She's got cats at home. She don't need anything. She's.

[Ken Coleman]

That is.

[Jade Warshaw]

So she's knitting on it.

[Ken Coleman]

That's right. There's. There's like, hundreds of thousands of Janices that are listening to us right now. And we're gonna get slack for that.

[Jade Warshaw]

Janice, we love you. I'm also. We love you, Janice.

[Ken Coleman]

Yeah. That's funny. Good stuff there. Let's go to Kylie now in Dallas, Texas. Kylie, you are. How. How can we help Kylie?

[Kylie]

Hi. Hi. How are you?

[Ken Coleman]

Good. How are you?

[Kylie]

I'm doing well. I'm calling with a quick question regarding my husband and I. We actually have no debt, strong savings, and invest constantly and consistently. But we feel very stuck. We're hesitant to make big decisions like buying a home or spending because we don't want to make the wrong move. So we just are looking for clarity on what we can actually afford and how to move forward confidently without overthinking everything.

[Ken Coleman]

Great. All right, so let's take the thinking out. Let's just look at the numbers. How about that? Is that okay?

[Bianca]

Sure.

[Ken Coleman]

Okay, so what is your combined income?

[Kylie]

Combined income is my husband makes 200k a year, and then he gets a quarterly bonus that ranges between 20 and 35,000.

[Ken Coleman]

So let's split the difference there, right? Let's go 25,000 just for fun. It's not truly splitting, I know for those of you keeping score, but let's say so that's another 100,000.

[Bianca]

Correct.

[Ken Coleman]

So 300,000. Do you bring any income in?

[Kylie]

I do not currently.

[Ken Coleman]

So 300k. What do we have saved?

[Kylie]

We have around 250,000 in a high yield savings account.

[Ken Coleman]

Great. What do you have in your retirement account accounts?

[Kylie]

We have 50k in a brokerage investment account and maxed out the Roth IRAs and we also max match the 401k.

[Ken Coleman]

So what's your total investment nets nest egg right now? What is it at

[Kylie]

including the 401k?

[Ken Coleman]

Yeah.

[Kylie]

I'm not sure.

[Jade Warshaw]

I'd love to know. Minus the 50,000. So the 50,000 is the only note non retirement investing that you have?

[Bianca]

I believe so.

[Jade Warshaw]

Okay.

[Ken Coleman]

Yeah, I was just trying to get a full picture. The bottom line is you have $250,000 in cash in a high yield savings account which is way above what your 3 to 6 months emergency fund would be. And you're you and, and you got a great income. So what type of house? What, what, what's the price point for the house that if you had all the money right now? I don't want scared Kylie. I want Kylie who's dreaming because she can get any house she wants to get within. You know, obviously we're not talking about any house that was poorly worded. What is the house you want to get? Yeah, just give me the price range

[Kylie]

for the school district that we would prefer to be in the entry level. Homes are probably around a million.

[Jade Warshaw]

Okay. Okay. And so when I look at that, you know our rule of thumb here is you don't want your monthly payment on that to be any more than 25% of your take home pay. And of course that's everything in, that's hoa, taxes, insurance, all of that is included in that price. So my question to you is if we were to get on a mortgage calculator and plug those numbers in, you've got the two. And this is what I would do tonight with, with your husband technically at your disposal. I would take the 250,000 that's in the HYSA and I would knock it down to six months of expenses. What would you call six months of expenses

[Kylie]

currently without having any debt? We're renting. Our rent is 3,000amonth. No car notes, no anything. So I'll say 6,000amonth.

[Jade Warshaw]

Okay. Okay. So 36. 6,000. We save that out. Does that feel good? We'll round it up to 40. That makes me Feel good. Okay, so now we're playing with $210,000. So what I'd be looking at is what's you guys take home pay?

[Kylie]

His take home is 6,000 after taxes, a paycheck.

[Jade Warshaw]

So 6,000, that doesn't sound right. On a three, you say this man makes 300,000 a year.

[Bianca]

Well, it's B.O.

[Kylie]

he gets quarterly bonuses. So just from the 200K K, it's a little over 5,000 a paycheck. So two, a little under 12,000amonth take home.

[Jade Warshaw]

Okay. Okay. So what I would be doing is I would be looking for a mortgage of around $3,000, give or take. That would be my goal that you're paying every single month. So then what I'm going to do is I would go into a, you know, mortgage calculator. I'm using the one on Ramsey Solutions and I'd say, okay, what do I have to put down in order to get my mortgage into that placement? And then I'd work backwards from there. Right now you got 210 you could throw in there. And if you wanted to get into this brokerage account, you could, that'd give you 260 if you wanted to. There's really no penalty in you doing that. And I'm looking at a 15 year fixed rate. If I do that, if I put $260,000 down on this million dollar house, that gives me a monthly mortgage payment of $7,955 estimated for you. That's too high. So then I go, okay, what if we doubled that? What if we saved up, you know, 250 more over the course of time? How quickly could I do that? Now I'm putting 500,000 down on this house. When I do that, suddenly my mortgage is down to $5,800. Right. So that's the game I would play. And that's going to help. You know, how much money do we need to have saved up in order to do this in a way that feels good? It feels right.

[Bianca]

Right.

[Kylie]

Would you recommend in the meantime to just continue renting in the school district that we would want to be?

[Jade Warshaw]

I would, yeah, I would. I think that that's where you guys want to be. And all you're doing is when you're renting, you're just buying time. You're buying time and you're buying money to stack up for this down payment. And I think that that's a great investment for you guys. You're going to be there in the next two to three years.

[Dave Ramsey]

Dave, Ramsey here. Most people stay stuck with their money because they're not paying attention. Most people are living paycheck to paycheck, stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke and you deserve to have something to show for it. That's why we built the EveryDollar budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan. Step, step by by step. Look, most people hearing this will just keep hoping something changes, but not you. You're ready to make change happen. Starting now. Go download every dollar in the app store or Google Play and start for free today.

[Ken Coleman]

Our scripture of the day is first Thessalonians 5:11. Therefore encourage one another and build each other up. Just as in fact, you are doing our quote of the day from David Brinkley. A successful man is one who can lay a firm foundation with the bricks others have thrown in him. I promise you, I've done that. I've done that a couple times in life. That always feels nice. Chris is up in Atlanta, Georgia. Chris, how come we help today?

[Caller/Guest]

Hey, I was calling, had a question, wanted to get you guys opinion on if the vehicle that me and my wife are looking to purchase is in line with our current financial picture.

[Ken Coleman]

Okay, tell us about it, how much it costs.

[Caller/Guest]

All right, looking at two different trucks and one of them that I really like is $45,000.

[Ken Coleman]

Okay. Okay, what's the other one?

[Caller/Guest]

The other one's 35,000.

[Ken Coleman]

Okay, and what else do we need to know here? So do you have any debt?

[Caller/Guest]

No, sir, no debt, just a mortgage.

[Ken Coleman]

And what do you have saved up for this vehicle?

[Caller/Guest]

Well, currently in retirement savings, I have 272,000 in a traditional 401k. Through my employer and me and my wife, we have $115,000 liquid cash in a savings account.

[Ken Coleman]

And what is your combined income?

[Caller/Guest]

Last year my taxable income was $187,000. My wife makes 35,000. So after tax, bring home between 150 and 160.

[Ken Coleman]

Right. So you've got more than enough to cover it looks like the truck plus have a good 3 to 6 month emergency fund in cash, correct?

[Caller/Guest]

Correct. Yes, sir. And really where the question comes from is we just, just bought my wife a new vehicle after having our first child. We did that with cash and it was $37,500 vehicle. We paid cash for that and we, we have cash to pay. We'd be paying cash for the truck as well. It just felt like a lot of money, you know, within two months of each other.

[Jade Warshaw]

Yeah, yeah. I mean, you've got it. What would you. Of the 115,000, what would you consider your three to six months of emergency as he fund?

[Caller/Guest]

We, you know, probably 25,000.

[Jade Warshaw]

Oh, okay. Well, it sounds like you've got the margin there. Did you have the money possibly earmarked for something else? Because usually when you're saving up, you know, a stack of money like that, you're doing it for a purpose, otherwise you'd be investing it.

[Caller/Guest]

Right, Correct. Yeah. And I mean, you know, for me, I've just always been, you know, when I, soon as I get paid, I move everything over that I don't need for the month to a savings account.

[Jade Warshaw]

And, and you just said it right there, your language there, that should set you three free because you said what you need, you keep in your account and what you don't need, you move over. So that, that means you don't need this money. It's not earmarked for anything else. And you're wanting to upgrade a vehicle. And what I'm looking at is the numbers of someone who can afford to do that. You don't have any debt. You've got the emergency fund of 25,000, you can spend another 45,000 and you've still got plenty of money left over. You've got a great income. It doesn't go against our rule, rule of thumb here at Ramsey. As we say, vehicles shouldn't go, shouldn't be more than half of your annual take home pay. And that's because, you know, vehicles go down in value. And so we want to make sure that we're limiting that. So, so you're not, you know, you're not going against that rule. I think this is just kind of a personal.

[Ken Coleman]

Yeah. Are you, what's your emotion? Because you called us to get our take. What was your emotion about it? What did you think you should do?

[Caller/Guest]

Yeah, it just felt like a lot of money.

[Jade Warshaw]

Well, it is, it is a lot of money.

[Caller/Guest]

Whenever we, you know, whenever we bought our house, we put 20% down. So we wrote a big check. Then, you know, we paid cash for my wife's vehicle. We would pay cash for this one as well.

[Ken Coleman]

Right. No, does it, but does the 35 like that? Right, but my, I'm leaning in here. Does the 35 feel way better to you than the 45 or is it Very little difference.

[Caller/Guest]

Well, the main reason I called, because the 45 is the truck that I want. The 35 was where my wife was going.

[Ken Coleman]

Right. No, I get it. But I'm asking again, is there a different feeling in your gut, in your head, however you want to measure it, Is there a different feeling about the 35 if I pay the 35 for something versus 45. That's what I'm trying to understand.

[Caller/Guest]

Right. On my behalf. No, sir.

[Ken Coleman]

Great.

[Caller/Guest]

I'm very comfortable with the 45.

[Ken Coleman]

Right.

[Caller/Guest]

That's what I, My wife.

[Ken Coleman]

Okay. And that's what I thought. I thought there was. And so that's the, that's where the relationship stuff comes in. So now to me, and again, I'm, I'm speaking from a guy who's been married almost 28 years.

[Jade Warshaw]

Uhhuh.

[Ken Coleman]

If Jade, if Stacy and I are very separate on ten grand.

[Jade Warshaw]

Uhhuh.

[Ken Coleman]

I'm going to choose ten grand less to be in.

[Jade Warshaw]

In a better situation, maybe I would, I would pr. I would push it a little bit because of course I would. Because expense something being denoted expensive is all, Is all has to do with ratio. And I don't.

[Ken Coleman]

I. Yes, but that you're discounting emotion mathematically.

[Jade Warshaw]

Yes. Now. And, and I would put that to her because obviously numbers and facts have the ability to affect emotions.

[Ken Coleman]

I agree.

[Jade Warshaw]

And so if she doesn't have the right numerical facts.

[Ken Coleman]

That's fair.

[Jade Warshaw]

You see what I'm saying? So I think she does push that just a little bit.

[Ken Coleman]

These are. Yeah. Again, I'm not telling you not to do it. I'm just giving you my take. And I think that what I'm trying to get out of that. And I love that you push back on this, because what I'm saying is then you got to cast vision better.

[Jade Warshaw]

Yeah, that's true.

[Ken Coleman]

You're not casting enough to where she feels safe. For some reason, in her mind mind, she feels safe emotionally with 10 grand less. True or false?

[Caller/Guest]

True.

[Ken Coleman]

So we got to cover that. You got to fix that.

[Jade Warshaw]

Let me ask this, because I didn't clarify this. Are these brand new vehicles or are these used vehicles?

[Caller/Guest]

These are used vehicles.

[Jade Warshaw]

Okay. Yeah, Yeah, I, I, I hear what Ken is saying. What I, My thought is this is why you work so hard. You work so hard.

[Ken Coleman]

I agree with that.

[Jade Warshaw]

And you stack up and you save and you scrimp and you do all that, these things so that the day finally comes where you look in the lot and you go, that's the trucker one.

[Ken Coleman]

I get it.

[Jade Warshaw]

I like that one.

[Ken Coleman]

But when the wife is going, I don't think you need that one. This one's better. He's got to deal with it.

[Jade Warshaw]

Yes. But at the same time, I'd be like, come on, woman, don't kill my vibe. Because this is why I did all this.

[Ken Coleman]

Only you can say that. Cuz any dude that's got half a brain doesn't look at his wife and say, come on, woman, don't kill my vibe.

[Jade Warshaw]

I'm saying, Chris, how comfortable are you?

[Ken Coleman]

Yeah, Chris, how comfortable are you saying that?

[Caller/Guest]

I'm going to rewind this and let Jade say it for me.

[Ken Coleman]

That's my point. Which is, by the way, really smart. That's a pro move. Let Jade say it. I would rewind it.

[Jade Warshaw]

What's your wife's name? If you want to say it.

[Ken Coleman]

Oh, boy.

[Caller/Guest]

Ashley.

[Jade Warshaw]

Ashley. This is you and me talking over lunch. You guys have done so well. You got to live a little. This is what gives people gas in their tank when they get to take, you know, the, the spoils of the war and go out and do something with it and have a good time. And by the way, Ashley, you, you can get yourself a little something too. That's what I think. I think you've earned it.

[Ken Coleman]

I'm backing away from the mic, Ashley.

[Jade Warshaw]

I'm just saying they've done so well. They're doing so well.

[Ken Coleman]

I'm having fun. I, I agree with you, actually, that the, the $10,000, if I'm talking Ash, I'm going to go. Let's walk through this. Let's walk through the 10,000 difference.

[Jade Warshaw]

Yeah, let's walk through.

[Ken Coleman]

You feel so comfortable with 35. So I want to walk through this with you. Let's walk through it. Not minimize her feelings. Let's walk through it and let her get all of her words out. And instead of having a counterpoint to her words, ask a question in response.

[Jade Warshaw]

There you go, Ken, you're so diplomatic. I love it.

[Ken Coleman]

Well, well, it's not diplomatic. It's just psychology 101. And I think she, for some reason, doesn't feel safe. She's going to get to watch this, and I actually think she should watch it because I think she'll see our heart. We're having a little fun with it, but yeah, I think it's fine for you to get the $45,000 truck. We spent all this time talking about these trucks. What are the two trucks?

[Jade Warshaw]

Yeah,

[Caller/Guest]

one of them is a 2022 Ford F150K Ranch, and the other one is the same in 2019. And a little bit difference on the mileage as well.

[Ken Coleman]

Right. So the 2022 is the $45,000 one, correct?

[Caller/Guest]

Yep. There.

[Ken Coleman]

You know, I haven't seen these newer King Ranches, but I had a friend who had a King Ranch when they first came out. That is a nice truck.

[Jade Warshaw]

It's nice.

[Ken Coleman]

And I'm not a truck guy. If I showed up in a truck, people would be like, what happened to you?

[Jade Warshaw]

Oh, I'd be concerned. But everybody in the studio is, like, shaking their head like, yeah, that's the one.

[Ken Coleman]

Yeah. Yeah, I think that's a good move. So, hey, I think her favorite dinner, her favorite restaurant, her favorite cocktail, maybe a gift. Maybe a gift. And. And dude, woo her on this truck. That's not manipulate. That's woo wooing. That's a big difference. And I think. I think if you woo, you're gonna go woo woo when you get that big old King ranch truck. Thanks for calling. Calling, man. I appreciate it. Hey, to the rest of you, thanks for being with us. Remember this. There's ultimately only one way to financial peace, and that's to walk daily with the prince of peace Christ Jesus.