You’ll Always Live Paycheck-to-Paycheck Until You Have a Budget

Summary

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The Ramsey Show – Episode Summary

Episode Title: You’ll Always Live Paycheck-to-Paycheck Until You Have a Budget
Air Date: September 2, 2025
Hosts: Ken Coleman and Jade Warshaw (Ramsey Network)

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Episode Overview

This episode of The Ramsey Show centers on breaking the cycle of living paycheck-to-paycheck by embracing the power of budgeting. Ken Coleman and Jade Warshaw guide callers through real-life financial dilemmas—including overwhelming debt, college funding, property investment losses, relationship and safety concerns, and the practical steps to creating true financial margin. Themes of personal responsibility, behavioral change, and the importance of structure echo throughout, always punctuated by the Ramsey team’s direct-yet-encouraging tone.

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Key Calls & Discussion Topics

1. The Importance of Budgeting: “Where’s All the Money Going?”

[00:14–09:03]

Caller: Dallas, Birmingham

• Situation: Over $150,000 in debt (student loans, car and truck loans, credit cards, mortgage) and feeling overwhelmed despite a combined take-home pay of ~$10,000/month.
• Highlights:
  • Dallas and his wife struggle to track their spending; repeated car loans and inability to save plague their finances.
  • Ken points out the need for a precise plan: “You guys have the margin. You just have no plan.” [08:48, Ken Coleman]
  • Jade delivers practical steps:
    • Use the EveryDollar app for budgeting (assigned as homework & “date night”).
    • Research car values honestly; arrange to sell vehicles even if upside down by borrowing the difference for a “cash hooptie.”
  • Jade reframes the narrative: “It really is just a lack of sight line on this.” [08:09, Jade Warshaw]
• Memorable Moment: “Don’t trust Boo Boo” (on bad vehicle appraisals). [07:28, Ken & Jade]

2. Dealing with College Debt: Is It Time to Press Pause?

[10:10–19:34]

Caller: Quinn, South Carolina

• Situation: $49,000 in student loans, 3 semesters left, needs to fund another $28,000, worried about more borrowing.
• Key Guidance:
  • Jade quickly identifies that the school is unaffordable and challenges Quinn's assumptions around college timelines.
  • Ken uses a “MacGyver” analogy: “True innovation happens… as a result of a lack of resources.” [15:10, Ken Coleman]
  • Both recommend pressing pause on college to work and save (suggest mechanic work), rather than compounding debt.
  • Jade reframes expectations: “I think your battle here is with the clock…” [16:53, Jade Warshaw]
• Memorable Quote: “If you adopt that mindset, you go, wait a second. I’m not racing against this concocted societal norm...I’m racing against debt now.” [18:11, Ken Coleman]

3. When Real Estate Goes Wrong

[22:30–30:38]

Caller: Paul, Washington

• Situation: $100,000 HELOC against primary residence, additional debts, invested in three underperforming rental properties.
• Key Guidance:
  • Jade and Ken clarify that personal emergency funds are not for bailing out bad rental investments.
  • The Ramsey advice: Sell all non-performing rentals, pay off HELOC and personal debts, and focus on building retirement funds, not chasing difficult passive income ("Making money while we snore").
  • The hosts stress, “We’re not anti-real estate...Does it fit the baby steps? Does it fit your financial situation? That’s the question.” [30:38, Ken Coleman]

4. Retirement Anxiety—Despite Financial Success

[33:24–42:32]

Caller: Mary, Boston MA

• Situation: 71-year-old working full time, wanting to retire but worried despite $3M+ in assets (2 paid-for homes, cars, Social Security).
• Key Discussion:
  • Hosts enthusiastically confirm Mary is more than financially secure.
  • Jade offers financial education about living off investments: “You should be able to live off the interest alone...” [38:36, Jade Warshaw]
  • Ken reiterates: “You are way ahead of the game.” [40:24, Ken Coleman]
• Memorable Moment: “If you retired today and took your same salary, you would be fine.” [39:39, Jade Warshaw]
• Tone: Celebratory, humorous—Mary is called “the poster child” and “true living the dream.”

5. Should I Borrow Against My 401(k) to Pay Off Debt Faster?

[44:37–52:42]

Caller: Mike, Illinois

• Situation: Recently began Ramsey Baby Steps, considering taking a loss on a $25,000 401(k) loan to accelerate debt payoff.
• Key Discussion:
  • Jade warns against rationalizing past debts (“Your dollars are better than borrowed dollars”) [48:33, Jade Warshaw]
  • Advice to pay 401(k) loan aggressively—treat as priority, but do not cash out and take a penalty.
  • Hosts recommend pausing all retirement investing during Baby Step 2 for debt elimination firepower.

6. Navigating Construction Loans and Personal Values

[54:39–63:42]

Caller: Casey, Wyoming

• Situation: Single parent cash-flowing construction of new home on rural property, considering a mortgage to finish vs. two more years in a trailer.
• Key Points:
  • Hosts outline the math: if a 15-year mortgage for $100k keeps payment under 25% of take-home pay, it's okay.
  • Emotional/practical tension: Casey values building himself but is balancing pride against family needs.
  • Jade: “There’s not a wrong answer...it’s about values. You have to decide what’s it worth to you.” [59:54, Jade Warshaw]
  • Ken: “Life throws you things. No, I’m just being honest.” [59:13, Ken Coleman]

7. Seeking Safety and Financial Clarity Amid Domestic Disruption

[65:11–74:01]

Caller: Esther, South Carolina

• Situation: Considering leaving an unsafe marriage; two children, newborn, no work or support network.
• Key Guidance:
  • Jade urges: “You don’t tolerate that more than once.” [68:09, Jade Warshaw]
  • Immediate steps: Connect with domestic violence hotlines/shelters for safety, approach UK-based family for exam funding to regain pharmacy qualification.
  • Jade and Ken stress to call for help, refuse in-law aid, and stay in contact for ongoing support.

8. Transitioning To “Cash Only” For The First Time

[75:10–80:33]

Caller: Sydney, Colorado (written question)

• Situation: Founding budgeting “hard” after years of living off credit cards; worried about discomfort.
• Key Guidance:
  • Jade likens cutting credit cards to muscle atrophy/new habits, expects it to take ~90 days to feel normal.
  • Ken uses personal anecdote on how “appetite changes”—after time, you won’t crave credit cards: “When you change your lifestyle and you change your habits, your appetite changes with it…” [80:07, Ken Coleman]

9. Building a Budget After Debt Freedom

[80:54–83:47]

Caller: Kyle, Charleston SC

• Situation: Paid off $80k debt, completed emergency fund, first time budgeting for wealth building.
• Advice:
  • Use EveryDollar, allocate expenses, focus on 15% retirement investing, and use remaining margin to save for a home.
  • Celebrate the discipline: “You’re on your way to wealth, young man.” [83:55, Ken Coleman]

10. Should I Buy My Son a Different Car Than His Grandparents’ Free One?

[85:23–89:38]

Caller: Josh, Fort Worth, TX

• Situation: Wants to buy 17-year-old a more “sensible” car, but grandparents offer a free Acura TL.
• Hosts’ Verdict:
  • Ken & Jade agree: The Acura is perfectly reasonable; “Don’t look a gift horse in the mouth.”
  • “Take the gift... At least try it out.” [87:02, Jade Warshaw]

11. Recovering From a Business Deal Gone Bad Near Retirement

[90:30–104:51]

Caller: Dan, Alabama

• Situation: Sold family business via owner-financing which buyer bankrupted; lost retirement savings in process; struggling to piece together late-stage retirement plan.
• Hosts’ Plan:
  • Sell remaining business/building, stack all available cash, and get a job for stable income rather than start over with another business.
  • Jade addresses letting go: “I think the longer you keep it, the more loss you’re going to feel.” [100:53, Jade Warshaw]
  • Ken: “You need to sell everything...Let’s retire with dignity.” [104:51, Ken Coleman]

12. Getting Back on Track After a Car Totaled—And Credit Card Withdrawals

[106:15–114:41]

Caller: Tristan, Norman, OK

• Situation: Car totaled, only liability insurance, has $700 cash, needs transportation but is working on Baby Step 2.
• Advice:
  • Jade: Temporarily rideshare, public transportation, or bicycle to work, grind to save $2k–$3k for a “beater car.”
  • Ken: “Where there’s a will, there’s a way.” [114:16, Ken Coleman]
  • Both caution strongly against going into debt for a car.

13. Senior Dating and Financial Red Flags

[116:40–125:22]

Caller: Nikki, Missouri

• Situation: Senior widow, Facebook “relationship” with an older widower (never met); fears about his money management and her financial risk.
• Hosts’ Advice:
  • Ken is blunt: “This is absolute foolishness...You are putting your financial and your emotional situation in massive risk.” [124:02, Ken Coleman]
  • “Only a desperate, stupid woman would go forward with this and you are neither of those things—so don’t do it.” [125:02, Ken Coleman]

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Notable Quotes & Memorable Moments

• Ken Coleman: “You guys have the margin. You just have no plan.” [08:48]
• Jade Warshaw: “It really is just a lack of sight line on this.” [08:09]
• Ken Coleman (on credit card withdrawals): “When you change your lifestyle and you change your habits, your appetite changes with it.” [80:07]
• Jade (to Mary the retiree): “If you retired today and took your same salary, you would be fine.” [39:39]
• On real estate: “Everybody talks about real estate like it’s some form of passive income. It’s so not passive.” [29:46, Jade Warshaw]
• On Son’s Car Debate: “Take the gift...At least try it out. At the very least, let him try with the Acura.” [87:02, Jade Warshaw]
• On relationship risk: “Only a desperate, stupid woman would go forward with this and you are neither of those things. So don’t do it.” [125:02, Ken Coleman]

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Key Ramsey Principles Highlighted

• Budgeting is Behavioral: The root issue for most is spending without intentionality; “every dollar” needs a destination.
• Debt Is a Squeeze, Not a Strategy: Don’t leverage or gamble your home/retirement/income for investments or “bigger” purchases.
• Baby Steps Structure: Build starter emergency fund, pay off debt, fully fund emergency fund, then invest and pay off house.
• Real Talk on Financial Safety: Protect your financial and personal wellbeing first and foremost; don’t let loneliness or pride cloud judgment.
• Margin is Possible: With discipline and a realistic budget, most callers discovered more financial capacity than they thought.

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The Ramsey Show Tone

• Direct, friendly, and practical — never shaming for honest mistakes, but always challenging excuses and “stuck” thinking.
• Takes time for practical, actionable advice and encouragement, sometimes with tough love or a hearty dose of humor and Southern metaphor.

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Resource & Segment Timestamps

• Dallas' debt/budget call: [00:14–09:03]
• Quinn's college funding crisis: [10:10–19:34]
• Paul's investment/rental headache: [22:30–30:38]
• Mary’s retirement checkup: [33:24–42:32]
• Mike’s 401(k) loan concern: [44:37–52:42]
• Casey’s homebuilding dilemma: [54:39–63:42]
• Esther’s safety and single-mom plan: [65:11–74:01]
• Sydney on “credit card withdrawal”: [75:10–80:33]
• Kyle: first-time budgeting post-debt: [80:54–83:47]
• Josh/Acurra TL “car drama”: [85:23–89:38]
• Dan’s blown business deal/retirement: [90:30–104:51]
• Tristan’s car crash & budgeting: [106:15–114:41]
• Nikki’s risky romance: [116:40–125:22]

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TL;DR

You’ll never escape living paycheck-to-paycheck without a budget. Today's callers discovered margin (and hope) by choosing structure over chaos. Whether digging out of six-digit debt, untangling college costs, navigating late-in-life drama, or just learning to say “no” to car payments and scammy “love,” this episode underlined: You need a plan. You need a budget. And you can do it.

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For New Listeners

• Tool: Try the EveryDollar app—get clarity, set goals, and make your money go where it’s needed most.
• Mantra: “Your dollars are better than borrowed dollars.”
• Encouragement: “Where there’s a will, there’s a way.”—Ken Coleman

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Transcript

[Sponsor/Announcer]

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

[Ken Coleman]

This is the Ramsey show, where America hangs out to have a conversation about their life, specifically their money, their work, and their relationships. We want to help you win in all of those areas. The phone number for you to jump in today is 8888-255225-85225, alongside the fabulous Jade Warshaw. I'm Ken Coleman, and we are ready to go to help you. Let's start it off with Dallas in Birmingham. That's not confusing at all. Dallas, how can we help?

[Caller]

Good afternoon. Good morning. Good afternoon. I'm sorry.

[Ken Coleman]

It's okay.

[Caller]

Just wanted to. My wife. My lovely wife and I of 26 years, we are just swamped in debt. And I have been doing. We've been doing this for so long. I am just. We're beaten down with it, so we're trying to get some help here. We have a decision. Well, we were kind of trying to decide what to do our. Where do you want me to start? I have $76,000 in student loans. I did do two stupid moves. I. I'm an avid Dave Ramsey fan, by the way. I listen to you guys podcasts and I listen to you a lot. So I did do two stupid things. I bought a truck after selling my truck to pay for my baby, our baby's first semester in college. So I missed my truck. I bought another one. And my wife retired a couple of years ago, so I got the bright idea to go out and try to buy her a car.

[Jade Warshaw]

Oh, no. Okay.

[Caller]

Yes.

[Jade Warshaw]

How old are you guys?

[Caller]

We're both 50. I turned. I'm sorry. I turned 51. And she will be turning 51 here shortly. We're high school sweethearts. Sorry. I know that had nothing to do with anything.

[Ken Coleman]

Hey, that's a good year, by the way. And 74 is a good year. I was born in 74. It's a good year.

[Caller]

Great. Great.

[Ken Coleman]

Good year. That's not relevant to anybody but us. Thank you very much. Give us the debt load on the car and the truck.

[Caller]

Okay. The debt load on the car, on the truck, I owe 29,000. Her car, we owe 33,000.

[Jade Warshaw]

Okay. Anything else?

[Caller]

And credit cards? 13. Yes. $13,000 in credit card debt. So that's.

[Ken Coleman]

That's it.

[Caller]

Well. And of course, well, House. Yes. We have a home. You want the total on. On the home, what we owe? We owe 373.

[Jade Warshaw]

Okay. Just. I was just curious about that. Tell me about your income. What I Know you. Your wife's retired, but what do you guys take home every month?

[Caller]

Actually, she started back working again. She had to start back working again. So she's. She's a teacher. She's a retired teacher. And then she's teaching now in the private school system.

[Jade Warshaw]

So what are you guys bringing home.

[Caller]

Total?

My pay varies. Last year I brought home.

[Jade Warshaw]

Think about it by the month. That'll help you out when you see the month. What's it look like?

[Caller]

I wrote it down. My wife, she actually. And I wrote down numbers that we actually touched. So she actually touches $4,049 a month.

[Jade Warshaw]

Good.

[Caller]

And my pay varies due to overtime and things like that.

[Jade Warshaw]

Give me a middle month.

[Caller]

A middle. I can do you better. I can do the worst month. The worst.

[Jade Warshaw]

Why are you.

[Ken Coleman]

At this point? I'll just take a number. I'm anxious for a number. Just any number at this point.

[Caller]

I'm so sorry. I'm sorry. I'm sorry. Okay. 6723 is what I'm totaling this far.

[Ken Coleman]

So you guys are take home. So you guys are taking home almost 11,000. Take home. Is that what I'm hearing?

[Caller]

I'll say 10. Yes.

[Jade Warshaw]

Okay, great. 10K a month. How much is your mortgage?

[Caller]

Mortgage is 2137.

[Jade Warshaw]

Okay, fine. Okay. Who. Listen, that was a lot. Dallas, to get to that. Okay, so you called in saying that you guys are just over overwhelmed.

[Caller]

Yeah.

[Jade Warshaw]

When did your wife start back working? Did that just now start or has she back for a couple months or since last year, I should say.

[Caller]

Oh, no, I remember last year. She started back last year.

[Jade Warshaw]

Okay, so you've had her income. Tell me the. So you did mention a child that went to school, but it sounded like you were able to cash flow that or is college still on the plate?

[Caller]

College is still on the plate now. And it's mainly her. Well, it's mainly her apartment.

[Ken Coleman]

Are you. So you're cash flowing that.

[Caller]

Yes.

[Ken Coleman]

What is the. Okay, I'm going to. I'm going to jump to the crux of this thing quick, Dallas, but I want one more number. What are you paying for her apartment?

[Caller]

750.

[Ken Coleman]

7:50.

[Jade Warshaw]

Okay, so roommates.

[Caller]

Yes, but it's kind of one of those things where they both pay the 750 and.

[Ken Coleman]

All right.

[Caller]

Yeah.

[Ken Coleman]

So what is the car. What is the car worth? I know you owe 33. Is it. Is it worth more than you owe? No truck.

[Caller]

I know we're. Well, I'm getting confused. I'm sorry. I'm so sorry.

[Ken Coleman]

Are you upside down? All right, here's it. Let me drive down. Let me Dr. Hold on. Let me drive, because we got it. We got three minutes. So you answer. That's okay. I got you, dog. All right. So are you upside down in the car?

[Caller]

Yes. I don't have those exact numbers.

[Ken Coleman]

That's okay. Are you upside down on the truck?

[Caller]

Very. 14,000.

[Ken Coleman]

That's okay. We won't spend any time on that. Okay. So, Jade, I'm leaning in here. I want Jay to be able to help. What I think is happening, Dallas, is you guys have no idea how to budget because even with these numbers, and I don't want to take up any more time on what you're. Well, you know, what do you know your minute, you know, your payments on the car in the truck? What are the trucks?

[Caller]

Yeah, yeah, my truck payment is 545, and the car payment is 668.

[Ken Coleman]

All right, that gives Jay the thing. I bet you guys just don't know how to budget. That's what I think.

[Jade Warshaw]

I don't think you should. You have debt, so you're going to feel the squeeze. But based on the numbers, I feel like the biggest squeeze is from the fact that you guys aren't on a budget. And Ken and I can hear that in the way you're talking about it. So before you get off the call, we are going to set you up with every dollar on, and that's going to help you get control of just seeing the numbers. Dallas is going to give you so much control so that you know actually where your money's going. And you'll be able to see, once you plug the numbers into your budget, how much margin you should have left to be attacking your smallest debt. I'm going to give you three bits of homework. The first bit is. Yeah. When we give you every dollar for free tonight, that's your date night with your wife. All right, so you guys are sitting down, and I want you to complete it. Don't start it and be like, oh, tomorrow we'll do it. I want you to complet the budget tonight so you can see that margin. Second thing is, Ken and I want you to go on Kelly blue book.com and get the true numbers on what the. What you owe on these cars versus what they're worth so that you can find out the amount that you're upside down. Okay, so that's the ne. Next thing. Find out how much I am up upside down from a true source, not just, you know, boo boo, who took a look at your car the other day.

[Ken Coleman]

Don't trust Boo Boo.

[Jade Warshaw]

Yeah, real number. And then the third thing is now we're going to find out, is it something that you know, I don't know what your credit's looking like, but you're going to need to get a loan for the difference on this upside down stuff, whether you go to the credit union, whether you go, I don't care where you go. The point is we need to get a loan for the difference so that we can sell these vehicles at least one. Right. And get ourselves into, into a cash hooptie. I didn't ask you, but do you have any money saved? Quick answer.

[Caller]

Do not. That's the issue. I had to stop my retirement because I can't afford to pay the debt.

[Jade Warshaw]

That was right. That was right. That was the right thing to do.

[Caller]

Okay. And we just cannot save a dollar.

[Jade Warshaw]

It's because you don't, because you don't have a budget. And to Ken's point, you're spending. That's going to stop today because you're going to see, yeah, debt is a problem. But you want to know, Dallas, you're also going to see we've been going out to eat and we've been doing things we can't afford. And it really is just a lack of sight line on this.

[Ken Coleman]

Dallas, I'll say this as point blank as I can say it. I'm doing a rough look at the numbers you gave us. Plus I'm looking at utilities, groceries. We didn't get the credit card minimum, but I have a general idea. Your take home. You ready for some good news? Dallas, if you do what Jay told you and use the budget, you're going to be able to put a couple thousand dollars a month towards debt.

[Jade Warshaw]

Yes.

[Ken Coleman]

You guys have the margin. You just have no plan.

[Jade Warshaw]

No plan.

[Ken Coleman]

Foreign.

[Sponsor/Announcer]

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[Ken Coleman]

Regional analysis of Aldi versus select competitors. Prices may vary by location, product availability and the market. All right, Quinn is up next in South Carolina. Quinn how can we help today?

[Caller]

Hi. I'm currently in College. I'm $49,000 in debt and I have three semesters left and I still, I'm gonna need to come up with about 28,000.

[Ken Coleman]

Okay. And what are we pursuing?

[Caller]

So mechanical engineering.

[Ken Coleman]

Okay. All right, keep going.

[Caller]

And so the. I'm currently a senior, but I switched majors a couple times. So I'm gonna have an extra three semesters after my senior year. And my parents have helped me these four years. And then the next three semesters I'll be on my own. And I'm curious on whether I should continue to do federal loans to pay for that or if I should or how I should go about paying for that.

[Jade Warshaw]

Well, when you said your parents were helping you the first four years, what does that mean? Because you already have 50,000 in debt.

[Caller]

So they would help me. Like they paid for my rent and anything that federal loans plus my scholarships didn't cover, they would cover.

[Jade Warshaw]

Uh huh huh. Okay. So the problem here, and you need another 28,000 is what you said, what school are you? Where are you at?

[Caller]

Clemson University.

[Jade Warshaw]

Okay. I think the problem are you doing any part time work.

[Caller]

I do.

[Jade Warshaw]

And how much does that bring you a month?

[Caller]

I make about depending on the week. And like my classes, I make between like 100 and 200 a week.

[Jade Warshaw]

Okay.

[Caller]

Which pays for groceries and then a little extra.

[Jade Warshaw]

Right. But the problem is none of this is touching tuition. And the tuition is the problem because that's what you're taking out loans for. The problem. Let's go back and identify the problem. I know there's not a whole lot you can do for the spilled milk, but your school is too expensive for you.

[Caller]

Mm.

[Jade Warshaw]

That's the problem. And so you have. You're at a really critical point where you're gonna keep going or you're gonna stop and reevaluate. And part of you has already stopped. Cause you're calling here. But you have to make a very clear decision whether or not you're going to stop borrowing money or not. And it has to start there. And then from there we can decide. Now what are our. What levers do we wanna pull? But the first question is, are you ready to stop actually borrowing money?

[Caller]

Yes, I'd like to borrow. No more money on top of this.

[Ken Coleman]

All right, so let me tell you what I would do. I'm going to walk you through the questions I would ask myself. But I'm asking you. Is that cool?

[Caller]

Okay. All right, here we go. Absolutely.

[Ken Coleman]

What is it that I Want to do, Quinn? What do I want to do? Let's fast forward and assume we have this degree. What would be ideal?

[Caller]

I'd like to work in the automotive or aerospace industry.

[Ken Coleman]

Fantastic. And what would an entry level job look like.

[Caller]

Payment wise?

[Ken Coleman]

No. What are you doing?

[Caller]

A lot of it is, like doing tests on engines and, like, already produced, like, products to see if they're.

[Ken Coleman]

Got it. I don't need to understand it. I'm walking you through an exercise. But you understand what entry level looks like, correct? In those two fields. Okay, wonderful. So the question is. The next question I would have is, can I do those entry level positions now without the degree? What's the answer to that? No, you cannot do entry level without that mechanical engineering degree.

[Caller]

Not an entry level engineering.

[Ken Coleman]

Okay. Can you do adjacent work that is similar to it, but you don't have the degree, but you're doing similar functional type work?

[Caller]

I'm not sure about that answer. I could look into that, though.

[Ken Coleman]

All right. Because I'm clueless about your. Your, Your fields, I can ask this question. You want to work with engines? Yes.

[Caller]

Yes.

[Ken Coleman]

Okay. And this is. This is a mechanical engineering degree. So I know you don't want to be a full blown mechanic who works on my car, but it's the same function. True or false?

[Jade Warshaw]

Yeah.

[Ken Coleman]

Great. Do you have any idea what mechanic. Could you. Could you go and do basic mechanic work right now on something?

[Caller]

Yes.

[Ken Coleman]

And you have any idea what that pays per hour?

[Caller]

I do not.

[Ken Coleman]

It's pretty good. Pretty good. So now I've arrived at a solution because I've committed to Jade and I've committed to myself. I'm playing Quinn right now, okay? And. And I'm not gonna. Debt is not an option. So this is where innovation comes from, by the way. As a mechanical engineer, you should appreciate this point. True innovation happens at its purest and best form as a result of a lack of resources.

[Jade Warshaw]

That's right.

[Ken Coleman]

Right. It's why everybody loved the old show MacGyver, that you're not old enough to know, but MacGyver was innovative, all right? The guy didn't have it. He was under pressure and he saved the world with a T. Paper towel, cardboard.

[Jade Warshaw]

That's right.

[Ken Coleman]

Some duct tape and the inside of a Bic pen. And he killed a man and operated on him at the same time. And it was innovation, and we loved it. Right? It was this. So. So what I'm. What I'm challenging you to do right now is. Is to be innovative. And if I'm you and I've got $28,000 I got to come up with seems insurmountable when we put it in the form of a student loan. But when I say, wait, can I make two grand a month using my basic mechanical skill set, the answer is absolutely bargain basement. You can. So if it's me, I'm going to press pause on Clemson because here's what I know about Clemson. Clemson is going to be there.

[Jade Warshaw]

Yeah, that's right.

[Ken Coleman]

When you come up with 28,000. So my last point, I want to bring my. My partner in here on this one. I would press pause, I'd go make $28,000, and then I would show back up to Clemson. They'll take your 28,000 whether it's tomorrow or two years from now. And it doesn't take two years to make 28,000. I'm making the case to you that you can make 28,000 in less than 12 months.

[Jade Warshaw]

Yeah, you can do that and go.

[Ken Coleman]

Turn a wrench and get dirty and get nasty and go. I never want to do this kind of mechanical work, but I'm going to do it because I have to do it so that I can do what I want to do later. And that's what I would do. I would come back with the 28,000. I'd lay it on the counter for the Clemson folks and go paid in full. I'm going to finish my courses. I'm out of here. And now I'm rocking and rolling. Yeah, that's what I would do, I think. What would you do, Ken?

[Jade Warshaw]

I think you're 100% right, Quinn. I think your battle here is with the clock because people think, I mean, I'm in college. I got to do it in four years. I got to do it back to back. I have to do it at this time, in this amount of time. And if you can change that and say the most important thing is that I get where I want to go.

[Ken Coleman]

That's right.

[Jade Warshaw]

And where you want to go is not just you. You made it clear. You said, where I want to go is not just where I want to end up is not just with a degree. I want to end up with a degree without a dime, more debt. And since you said that's the destination, then you have to be willing to invest the time to go the right way to get there. Otherwise, you won't end up there. You'll end up with $28,000 more of debt. So that's. Those are your. Your guiding lights. There is. You want to be clear about where you want to end up with this degree without a cent more of debt. And you've got to wrap your head around the fact that it's going to take time to get there, and that's okay.

[Ken Coleman]

Yeah, I love that. I love that. Jay just nailed the. I gave you a. Here's what I would do tactically, but she gave you the mindset that you're going to have to adopt. You've got to listen to what she said. If you adopt that mindset, you go, wait a second. I've now changed the clock. I'm not racing against this concocted societal norm.

[Jade Warshaw]

Right.

[Ken Coleman]

I'm racing against debt now. It's a different race I'm running. I don't want more debt. And I throw another one at you. How many credit hours are we talking about that you. Is it. Was it two more semesters or three more semesters?

[Caller]

Three more semesters.

[Ken Coleman]

How many hours are you paid for? Would you be able to do mechanical work and carry the class load?

[Caller]

Not at a full. Okay, all right, that's fine.

[Ken Coleman]

That's fine. Because I was going to challenge you to keep on, you know, getting the. I mean, I got a movie in my mind. Tell me what movie, Ken, what is that movie?

[Jade Warshaw]

Describe it.

[Ken Coleman]

It's Matt Damon and Goodwill hunting. Thank you. You know, I. I got a hustler in my mind. Thank you. This is what happens when you throw an alley oop to somebody who can dunk it. She just comes in, broke the glass, she just ripped the rim off. Love that. But that's what I'm talking about. I'm talking about blue collar attitude. I'm gonna work my way through this. And I was hoping that you could make some money and pay off some of that 49,000 while we're doing it. And so we got a little grease under our fingernails. That's the price of admission. So chin up, New mindset that Jade gave you and decide today I'm going to finish this and make it a new race. I'm going to race against the societal norm.

[Jade Warshaw]

Come on, Quinn, I.

[Ken Coleman]

We believe in you, man. So go do it.

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[Ken Coleman]

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[Caller]

And.

[Ken Coleman]

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

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[Ken Coleman]

They don't know what to do next.

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[Ken Coleman]

Hey folks, buying or selling your home is a really big deal. And with all the clickbait headlines and conflicting data out there, it's hard to know what's happening in the housing market. And we want to make the latest trends easy to understand. To give you an example, median home prices stayed steady last month at about $439,000. The number of homes for sale hit 1 million for the third month in a row. So buyers have more options and more negotiating power, while sellers are the ones facing a little bit more competition. The average 15 year fixed rate dipped a bit to 5.86% last month. So if you're debt free and have a fully funded emergency fund and a solid down payment, now is in fact a great time to buy or sell your home. If you'd like to learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to ramseysolutions.com market. That's ramseysolutions.com market. Or you can click the link in the Show Notes. If you are listening via podcast and YouTube, Paul is up in Washington. Paul, how can we help?

[Caller]

Hey guys, thanks for taking my call. About five months ago my wife and I took FPU and we've been working on baby step two. So about two years ago I took out $100,000 HELOC against our primary residence in order to make down payments on three different rental houses. It was an idea to, you know, for a retirement plan was to try to accumulate a bunch of rental houses. We're seeing problems with that. They've not been cash flowing. Well, one of them, especially that one's for sale right now.

[Ken Coleman]

Good.

[Caller]

When it sells, we're going to pay off. We have about $17,000 in like between a car loan and credit cards. We're going to pay that off and then we're also going to. I was thinking it would be wise to have a six month emergency fund for the rental houses to cover their mortgages in case the rental income doesn't.

[Jade Warshaw]

How many rental houses are there.

[Caller]

Currently? There's three, but one of them is for sale. We close on it next week.

[Ken Coleman]

But none of them are cash flowing positively on a consistent basis, correct?

[Caller]

Not consistently, no.

[Ken Coleman]

Do you have equity in all three?

[Caller]

Yes. Okay, we have.

[Ken Coleman]

Okay, let me address something before the call gets going too further. We're going to tell you what to do, but I want to go and address something. You just kind of said this, the emergency fund, the six month emergency fund is not there to cover the rent, the rental income on these homes. That's not what the emergency fund is for. It's for actual emergencies that affect your life that are, that are your expenses, your income, you know, your bills, you want to cover your expenses. It's for your personal expenses, not for your rental homes. Okay, so that's a, not a, that's a non starter.

[Jade Warshaw]

That's right. Okay, Ken, I'm glad you clarified that because I, that is so important. What it sounds like is you could benefit from some simplification here. Am I, is that fair?

[Caller]

It is fair.

[Jade Warshaw]

Okay, that's question, that's question one so that you said that was fair. Question two would be like you said, these, these properties aren't making you any money. Right.

[Caller]

Right.

[Jade Warshaw]

So my, since they're not making money and since you could benefit from some simplicity, I would recommend selling them since they're all worth more and you could actually make some cash on these things, get out of these hundred thousand dollars of helocs and obviously, you know, clear all your other personal debt and kind of start this idea over from scratch and just build it the right way. Because if you do that and you're able to use some of this money because I, I mean we could go through it if you want. If you were to sell all three, what would you end up with? After fees and everything.

[Caller]

I think of selling all three, I think we would clear the $100,000 HELOC and the 17k in debt. I think that is about it.

[Jade Warshaw]

And then you'd be at zero.

[Caller]

Okay, we would be at zero debt except for our primary residence.

[Ken Coleman]

Tell him what he's won, Jade.

[Jade Warshaw]

Well, you've won peace. And now you've won the ability to focus in on your security, which is your primary residence. What do you owe that?

[Caller]

Shoot. 100 and no. What are we out on that? I'm sorry, I'm not prepared for that.

[Jade Warshaw]

That's okay. Around 100 and a half something around there.

[Caller]

160.

[Jade Warshaw]

Okay, 160. And then what's you guys income without the. I mean your properties weren't making anything, but what's your income.

[Caller]

After, like take home? I think we're at about 110.

[Jade Warshaw]

Okay, so with that income and with what you owe on the mortgage, I mean with a little intensity or with just being intentional, you could clear your own mortgage out if you wanted to very, very quickly. And then now you can start this real estate dream if you even wanted to. Like this might have been your last. I don't know, maybe you're sick of it at this point, but now you could go back in and say, okay, next time we do this, we're going to do it for cash. We're going to move a lot slower and we're going to make sure that no matter what, we're not putting ourself in a risky spot and we're going to be making money on whatever we do.

[Caller]

Yeah, yeah, that's, that's been the gist of how we've been feeling. I just, it was hard to let go of the idea that, you know, down the line we would have all this rental income. But it might, I'm afraid we won't even make it there.

[Ken Coleman]

Not now. But to Jade's point, if you clear all this and now you go about it the right way, you still have time. How old are you?

[Caller]

44.

[Ken Coleman]

And what do you have in retirement?

[Caller]

About 30k.

[Ken Coleman]

Okay, so we got to build that.

[Jade Warshaw]

Yeah.

[Ken Coleman]

I am not thinking about houses. Let me tell you why. Just this to kind of, if I was in your shoes, this may help your stomach and your heart. Sell these three homes. Here's why. Okay, the three homes, let's say that you guys were cash flow positive, which you're not on these things. But let's just say, you know, because we hear this call all the time and somebody will say, well, we're clearing. We're clearing about 6 to $800 a month on these things. Or let's go to a thousand. Let's do a round number. Let me get $1,000 a month, free and clear. All right, that's $12,000 a year. Okay. That doesn't include expenses, right? That. Home repairs, $12,000. I would rather be investing in the investment strategy that Ramsey teaches than I would be fiddling around with houses, especially in your shoes. You're not what I would call completely behind the eight ball. You're a little age with only 30,000. But the baby steps is the play for you. So you get the. You get this debt out of the way by selling these houses. And now we attack. Baby step three, Go to three to six months of your expenses. And then we think, all right, now we're all baby step four in the sense of we're now 15% fully funded retirement accounts. And let's see what happens above and beyond that. But I just think for a lot of people, the rental house income is. It just looks and smells and sounds way better than it actually is. It's a lot of work. A lot of work for $12,000.

[Jade Warshaw]

It will never be me, Ken. It's too much.

[Ken Coleman]

I'm not doing it.

[Jade Warshaw]

Yeah, I know.

[Ken Coleman]

On the other hand, I look at my little dashboard every month and I go, oh, look what the stock market did today.

[Jade Warshaw]

That's true. That's the true path of the big.

[Ken Coleman]

I made money and I was snoring. You know, there's like, I got a guy in the audience, thumbs up, man. He's a. You're a fellow snorer, but we're making money while we snore, bro. Yes, sir. That's the play.

[Jade Warshaw]

Yeah, Everybody. Everybody talks about real estate like it's some form of passive income. It's so not passive. But I think. I mean, I don't know what your wife says about this. You guys have to go home and talk about it. But I think to solve for the two things that you said, which is, hey, it's fair to say I could benefit from some simplicity. And the truth is these things aren't making me any money anyway. But you are losing, you know, your.

[Ken Coleman]

Peace over them, so your blood pressure's gonna drop.

[Jade Warshaw]

Ye.

[Ken Coleman]

You know, sleep better. The baby steps is the plan for you, Paul. It's not too late, but I would say at 41, this is the time to make this move.

[Jade Warshaw]

And let me just be fair. Let me. Because. Because somebody's listening and going, guys, you know, anytime somebody calls him with real estate, you guys tell them to sell it. That's not necessarily true. If he had called in and said, hey, I've got these three properties, they're killing it, you know, banging. I would have maybe suggested selling one, possibly to clear some debt. And I would have said, yeah, keep the others. Here's the plan to pay them off like they're a couple. There is a time where somebody calls in and they've gone and done what they're going to do. That's right. And it's not always about telling them to, you know, fold everything and start from scratch. So just put it out there.

[Ken Coleman]

That's actually a great point. It depends on a person's financial position. I know some of you going, well, Ken, okay, my little rant about the $12,000, that's okay if you're no debt.

[Jade Warshaw]

Yes.

[Ken Coleman]

And your retirement's great. And this is something we're going, we're trying to pay this off as quick as we can. And now we're not doing it for the $12,000 a year. We're doing this for a house that you know is going to be worth 400 grand and we're going to pay it off in a year. Now that's real money, right? That's 400 grand cash that I could unload. That's the idea. So we're not anti real estate. It's just, does it fit the baby steps? Does it fit your financial situation? That's the question.

[Caller]

Foreign.

[Ken Coleman]

This show is sponsored by BetterHelp. Most of us are guilty of over sharing with the wrong person sometimes. And as fun as it can be to talk to people about everyday stuff, when you need help with relationships, anxiety, depression, or other clinical issues, random people may not have the right answers. Sometimes you need real guidance from a licensed therapist who follows a strict code of conduct. Someone who's actually trained to sit with hurting people. And that's why I recommend reaching out to my friends at BetterHelp. BetterHelp is the largest online therapy provider in the world. That means no matter what you're facing, they've probably got someone who specializes in exactly what you're struggling with. Better Help is totally online, which makes it easy to fit therapy into your busy schedule. To get started, just answer a few simple questions, nothing scary, and they're going to connect you with a licensed therapist who fits your needs. Plus, if it's not the right fit, you can switch anytime for no extra cost. BetterHelp has been matching people with therapists for over 10 years. And their 4.9 rating shows that they usually get it exactly right. Find the right one with BetterHelp. Visit betterhelp.com Ramsey to get 10% off your first month. That's BetterHelpH. E L-P.com Ramsey hey, if you are enjoying the show, if it's helping you, would you help us? You can do that by liking the show whether you're listening on podcasts or on YouTube subscribing on any of those platforms. And of course, share, share, share. That helps us so much. There's no marketing strategy world that competes with the good old fashioned word of mouth and that's how you can help us. So thank you for those that do and we'd love for you to continue to help us there. Mary is up now in Boston, Massachusetts. Mary, how can we help?

[Caller]

Hi. You know, I really would like to retire, but I'm very nervous about it. Not sure I can afford it.

[Ken Coleman]

Okay, give us some numbers so we can figure this out with you.

[Caller]

Okay. Well, I'm still working. I work full time. I'm 71.

[Ken Coleman]

What's your, what is your. What is your income?

[Caller]

It's about 100,000.

[Ken Coleman]

Great. What do you do?

[Caller]

I'm sorry?

[Ken Coleman]

What do you do for a living?

[Caller]

Sales sale.

[Ken Coleman]

What are you selling?

[Caller]

Electrical supplies.

[Jade Warshaw]

Nice. Wow.

[Ken Coleman]

For you. Is it? I'm just curious because this is awesome. I think you like. You're the hero of today's show. That is so fantastic. Still be crushing it. Is it straight commission or is it a base plus salary? Straight. Oh, a salary. Okay, great. For you? Okay. All right, so walk us through.

[Jade Warshaw]

Yeah.

[Ken Coleman]

What do you have?

[Caller]

Yeah, well, I have about a million and a half in a 401k.

[Jade Warshaw]

Okay.

[Caller]

I have about a million and a half in stocks. Probably a little more than that.

[Ken Coleman]

Mary, I've got great news. This is breaking news. It's coming in my right ear right now. Getting this fresh from James right here. Breaking news. He says you're fine.

[Caller]

Mary.

[Ken Coleman]

I mean, I have $3 million.

[Jade Warshaw]

I was getting out my calculator like we were going to have real work to do.

[Ken Coleman]

I was nervous for you.

[Caller]

A lot of expenses, though.

[Ken Coleman]

What are your expenses?

[Jade Warshaw]

Okay. Yeah, let's hear it.

[Caller]

Well, I have two houses, two cars. I mean, they're paid for, but then they're assets, taxes, insurance.

[Ken Coleman]

Mary, you only need one car. So sell the other car. But it's not costing you.

[Caller]

Well, they're in different states.

[Ken Coleman]

Okay, well, why are they different states? You also, you gotta. You got two homes in two states?

[Caller]

Yes.

[Ken Coleman]

Are the homes paid for?

[Caller]

Yes.

[Jade Warshaw]

What are the states? Is one your, your wintering home and one is your summering home?

[Caller]

Yes.

[Ken Coleman]

Okay, Mary, America is about to get mad at you. You are truly living the dream. Mary. This is. We're having a little bit of fun, but in all honesty, you're in great shape. You have have two paid for homes, you have two paid for cars. What are these expenses that you said you have that are so, so high that 3 million as it continues to grow is not going to be enough for you? What are we missing?

[Caller]

Well, I don't know.

It's about 45,000 a year. The expenses for insurance, and that's without any emergencies.

[Jade Warshaw]

But you insurances on all your assets.

[Caller]

I don't get any pension.

[Ken Coleman]

Right. But my guess is you're going to have a pretty nice Social Security benefit. Is my guess.

[Jade Warshaw]

And you'll draw from your account 4400.

[Ken Coleman]

Sweetheart, how much does it take for you to live every month? Because I know you know the answer to this, Mary. What is your top line expense for everything? All in Food, gas, clothing, everything?

[Caller]

Well, it's about.

I don't know.

[Ken Coleman]

Oh, come on.

[Jade Warshaw]

You don't have a mortgage. It's just you, you're not married, right?

[Ken Coleman]

What do you need to live? Take an educated guess of what you need every month to live comfortably. How much money?

[Caller]

Probably about 4,000.

[Ken Coleman]

4,000. Okay. You're gonna have a Social Security payment of $4,400. So we've got that. And then you've got 3 million that is continuing to grow. Jade, I don't think I'm getting through to Mary. She's in great shape.

[Jade Warshaw]

You're in great shape. In the words of Ken Coleman, this is a nothing burger.

[Ken Coleman]

This is a nothing burger. Yes.

[Jade Warshaw]

Nothing there.

[Ken Coleman]

This has got ketchup, mustard, pickle, lettuce, the whole. It's the works. You are great, Mary.

[Jade Warshaw]

Great job. Do you know how many people who are in their 20s wish they had a job that paid them $100,000 that.

[Ken Coleman]

Would chew their right leg off on camera. To have your portfolio.

[Jade Warshaw]

Yeah.

[Caller]

You're doing so to lose that. Why, when I retire, that's fine.

[Jade Warshaw]

Yeah, you're gonna.

[Ken Coleman]

What are you losing?

[Jade Warshaw]

You will lose the job. No, no, no, you won't. You won't. You will lose the job because you will choose, hey, I don't want to work anymore. Then you can look over to any of these retirement accounts and say, I'd like to make $100,000 a year, please. And they're gonna go, okay, you can.

[Ken Coleman]

Afford that, by the way. You've got that you could pull.

[Caller]

How long would that actually last?

[Ken Coleman]

Your whole life?

[Jade Warshaw]

Because you're not touching. Let's. Okay, let's teach for a minute, because I want to make sure you understand this. So if you have this money invested the way it sounds like you do, you should be making, on average annualized rate of return. You should be somewhere around the 9, 10% mark. Okay. That is when you take all the years that you've had it invested and average those rates of return, it should be around 10%. Okay? So that means, let's just take a round number, like, I don't know, $1 million. If you've been making 10% on that, what is 10%? $100,000. Does that make sense? So you should be able to live off the interest alone without touching the nest egg. Does that make sense? If it doesn't, I'll explain it another way.

[Ken Coleman]

Well, let's. Let's use real numbers. You've got a total of. You've got over $3 million in retirement accounts. That's what you told us.

[Caller]

Right? I do have some CDs and cash.

[Jade Warshaw]

I'm sure you do.

[Ken Coleman]

Well, listen, none of this is a surprise. I think you got more money buried in your backyard than most people make in a year. I think there's probably that level.

[Caller]

Sometimes they do. Sometimes I do bury it.

[Jade Warshaw]

I know you do. The point, Mary, is these things. If you really lived off of 10%, you could take a $300,000 site, you know, salary.

[Ken Coleman]

Well, that's exactly right.

[Jade Warshaw]

There's. We would account for inflation, and we would account for. You know, I don't know if this is in Roth or what it's in. So there are some things to consider here. But none of it. None of those details are going to drain your nest eggs. None of those details are going to cause you to be even close to broke. Okay. I. I would go on. I would stand on business today and say if you retired today and took your same salary, you would be fine. Now, if you don't believe me, that's okay. I would encourage you to get with a smartvestor and let them show you this.

[Ken Coleman]

But here's what we haven't discussed yet, Mary. Okay.

[Caller]

Yeah.

[Ken Coleman]

The 3 million you have right now. Just the 3 million. You got more than 3 million. But at this point, we're.

[Caller]

There's no need to get into four.

[Ken Coleman]

Yeah. Oh, sure. Of course. Let's just say three for a moment. Okay. Based on what Jay told you earlier, with the historical return of the stock market that Jade laid out, you realize that you're a young and vibrant 71. Seven years from now, at 78, Jade, you want to tell her what that 3 million is going to be worth?

[Jade Warshaw]

Yeah. So we call it like a rule of seven. A lump sum, generally at a rate. The right rate of return will double every seven years.

[Ken Coleman]

So that means you're with. You got 6 million.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And the truth is you got 4. So let's just have some fun, Mary.

[Jade Warshaw]

So 8 million.

[Ken Coleman]

$8 million at 78. I mean, this is like. This is like you and your fried green tomatoes. Annual trip, we're blowing it in Barbados. We're having a blast. Like, you are way ahead of the game.

[Jade Warshaw]

You should be. What you should have done was called Ken and I to invite us to your retirement celebration.

[Ken Coleman]

I will emcee it. And Jade will sing. Yeah, it's a. It's a combo. It's a. Great. And all we ask for is four star accommodations and travel expenses. That's all we asked for.

[Jade Warshaw]

That's right.

[Ken Coleman]

No, Mary, we're having fun.

[Caller]

Hasn't been that great, though. What, that it's going to double in seven years?

[Ken Coleman]

No, Mary, this is. This. You can actually go. You can Google this one.

[Jade Warshaw]

Yeah. This is real, Mom.

[Ken Coleman]

You can really Google this. Check our. Check us on this. This is the historical path of the stock market over its entire inception. Okay. This is a rate of return that you can expect. But even if you didn't get the 9 to 10% that Jade. All right, let's go conservative.

[Jade Warshaw]

Okay. Yeah.

[Ken Coleman]

Let's go 6%. Run your numbers on 6%. Here's what we really want you to do. Do you have somebody that manages your money? A licensed professional?

[Caller]

No, I do it on my own.

[Ken Coleman]

Oh, my gosh, Mary, you are such a rock star. The superlatives, I can't summon enough. Okay, here's what I want you to do.

[Jade Warshaw]

I don't want to get on Mary's bad side.

[Ken Coleman]

We're going to put you on hold. And Kelly is amazing. And Kelly, let's make sure she gets to the smartvestor pro section of our [e-mail] and. And I want you. Kelly will walk you through this, but I want you to interview 3, 4, or 5 in your area. And Mary, I know you got a gut and go with your gut on the one you trust the most and help let them tell you you what they think your portfolio is going to turn into and where you are. And then if you choose to have them work with you, great. But trust me, these folks are affiliated with us in the sense that they believe what we believe and they'll back what Jade and I are saying up and show you real numbers. So thank you for calling. Way to go. And can we just slow down? The whole audience is clapping for Mary. This is what we do. This is why we do it. Mary, you're the poster child. You're a.

[Jade Warshaw]

You want.

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[Jade Warshaw]

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[Jade Warshaw]

All.

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That is faith in action. So let me say it again. CHM is not insurance. It's a nationwide health cost sharing ministry. It's Christians helping other Christians with their medical bills. With chm, you get to choose your providers. There are no networks, no surprise bills, and no insurance headaches. Whether you're just starting out as a family or you're looking for something that fits your budget better, CHM is where your faith and finances agree. Programs start at just $98 a month. So go to chministries.org budget to learn more and take the leap of faith. Today, that's chministries.org budget.

[Ken Coleman]

This is the Ramsey show where America hangs out to talk about their money, their work and their relationships. And we're so glad you've joined us. I'm Ken Coleman. The incomparably fabulous Jade Warshaw joins me. The Phone number is, call-8825-5225. Mike is up in Illinois. Mike, how can we help today?

[Caller]

Hi, good morning. So, just had a question for you guys on. We are new to you guys's program and I'm talking really new, like maybe three, four or four days.

[Ken Coleman]

Welcome on board, sir.

[Caller]

Yeah, we don't, we don't really have a lot. And I'm not even gonna say like this is even overwhelming for us because it's, it's truly not. We're in a pretty good spot, I feel. All right. We're, we're about 150 a year between the two of us. And we, we got about 45, 000 in our cars. 57000 on our house. We got really lucky on our house. So yeah, so we're good. We do have some credit card about between seven and 10 and we got some medical about four. But we did some home improvement and we took out. Borrowed against ourselves. We took the advice of somebody else and borrowed against our 401k. So we have how much payments? About 25,000.

[Ken Coleman]

Oof. You're gonna love the tax on that, pal. Yeah, I know that's gonna feel great.

[Caller]

We do have it paid down to maybe 20ish, I'm guessing.

So.

So we're. We're just in a 401k loan, so we're paying that back. But my question was, is because we want to attack, we want to tackle all this pretty aggressive, you know, following the program. Should we take the hit on the 401k, get rid of that big monthly that we have there and then apply that thousand dollars a month towards paying everything else off? More aggressive. And then put the money back. And then, then put the money back quickly. You know what I mean? It just seems like we'll. The way we've been kind of running the numbers is if we, if we were to take away from. Use that money from the 401k, the monthly part of it, we would be able to go really aggressive and really pay this down because we're super excited to get towards the finance, the. The investing part.

[Ken Coleman]

Are you familiar with our snowball? I know you're three or four days in, so that's why I'm asking.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Are you familiar with that snowball?

[Caller]

Yeah. You know, and I think so familiar with the Ramsey name. Just didn't really know.

[Jade Warshaw]

That's fine.

[Ken Coleman]

So Jade. Let Jade. Let Jade coach you through what exactly we would do if we were in your shoes.

[Jade Warshaw]

Yeah, I'm going to simplify this for you because I'm going to go back and kind of assess. Can I. Can I just take a moment and go back and assess, do another diagnosis? Yeah, because then it will help us be in the right mindset to talk about the solution. The problem is, you know, you make a really great income, you and your wife combined. And the sad part about this is you didn't realize it, and so you let people trick you into thinking you needed to use debt to do all of the things that honestly you could have done with your income because it's so great. And the fact that your mortgage is only $57,000. And so I kind of want you to get your head around the fact that your income and your Money is real money, and it's better than borrowed money. And somewhere in your brain, you started thinking that borrowed money was better than your actual money. And I really want you to spend some time thinking about that because I never want you to be here again.

[Caller]

Sure. Just not to interrupt you there real quick, but the only thing that kind of put the. Put us in that is like, I guess I didn't say in the beginning is I went through a divorce 10 years ago. So I did have child support that was pretty. A lot of child support, which is pretty substantial.

[Jade Warshaw]

Sure.

[Caller]

Complaining about it, you know, my kids. But that, that did play a huge part in us, you know, financially.

[Jade Warshaw]

Sure, it played a huge part, but it didn't make you take out debt. You still chose to do that. So 100.

[Caller]

Yeah.

[Jade Warshaw]

I just want you to go forward from today going, you know what? Like, my dollars are better than borrowed dollars. And yeah, to Ken's point, less. So let's, let's walk this thing out. Because if you have something like a 401k loan, if you owe money to the IRS, that business is jumping to the top of the list. So typically what we would tell people to do is list your debt, smallest to largest. But there are a couple of exceptions. And like I said, owing money to the federal government is one of them. And having something like a HELOC is, or I'm sorry, having something like a 401k loan is one of them, because the implications around that are very, very big. And so for this, for this, I would say to you, like, you gotta understand every minute that you don't pay this back is a interest that you're missing out on. Every moment that you don't pay this back means if something happens and your job is on the line, it's gonna become paid due in full 12 months after you, you know, were let go. So there's a lot here around that. So I would, I would get in full gear on this and start getting it knocked out. Now, the good news is you've got 150k of income, but are you guys on a budget?

[Caller]

Yeah. So we kind of use a calendar system. We kind of write everything out on due dates and everything on our calendar.

[Jade Warshaw]

Good.

[Caller]

My wife, she's. She's pretty on top of it. So we, we do know exactly what to do, when, where, and we pay weeks ahead.

[Jade Warshaw]

Good. And so how much are you guys putting extra on debt every single month?

[Caller]

Month? Not a whole lot. Why?

[Jade Warshaw]

You have, you don't have hardly a mortgage, and you make this Great income.

[Ken Coleman]

What are those cars? Yeah. I wonder what this. Two cars?

[Caller]

Yeah. I think the car payments are pretty high.

[Jade Warshaw]

What are they?

[Caller]

We got one that's 600 and some change. Ish. And then another one that's four. Four something, I believe.

[Jade Warshaw]

Listen, it's not as bad as. It's not as bad as it could be. That's not what's taking your income. What's taking your income is you guys aren't. You're not on a budget. You're still spending a lot of money in a lot of areas. It's not the 4,000 of medical debt. It's not that. Because I can guess what the 10,000 of credit cards payment is. It's. You guys are living like 150,000 is the be all, end all. And I think that's what it is. And I'm sure you're still contributing to retirement, am I right?

[Caller]

Oh, yeah.

[Jade Warshaw]

100.

[Caller]

Yeah. We're doing, I'm doing the match and then I'm, I'm doing just the match right now. And then my wife's, my wife's doing 10.

[Jade Warshaw]

So let, let Ken and I give you a rundown because you did say you're brand new to the baby steps. So let's just dial it in. And from here you're going to get to choose. Do you want to do it, do you want to not do it? And that's your choice to make with you and your wife later. So what we would say is baby step one. When you're in your situation, baby step one is, hey, I just, I need to go down to a thousand dollars saved. If I can just keep a thousand dollars aside. That's my, you know, quick rainy day fund. But every other money needs to go to baby step two, which is paying off all the debt. And I told you before, it's list them smallest to largest with the two exceptions, and then we're there. But part of Baby Step 2 says, Hey, I need all of my income at its fullest power. So that means I am not dwindling my income on, you know, investing right now. I'm not putting too much into my withholding right now. I'm putting just enough because I don't want that tax refund. I want that money in my pocket every month. So those are quick ways to make sure we have all the money. And a lot of people don't like when we say pause investing, Ken, because they feel like they're missing out on time and they are missing out on time. But the thought process of that is, if I have Ken, if I have a bucket of water, if I have a pitcher of water here, and I have. I don't know, you have 1, 2, 3, 4. Four or five different glasses of debt. If I put a drop in each one, it's going to take me forever to fill up those glasses. But if I just take all the income in my pitcher and pour it on one, I'm going to fill up that glass very quickly. It's going to be gone. Okay? So that's why this works that way, Casey. And then we can go on to steps three and four and on down the list later. But right now, one and two is big. And something tells me he might have some savings somewhere that he needs to tap into.

[Ken Coleman]

And I'd even. We're running out of time. But I would tell you that. Look at those cars. If there's enough equity in those cars, you could go to a clunker. Let's see if we can get that $1,000 as well. So that's what we're doing here. Thanks for listening.

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[Ken Coleman]

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[Jade Warshaw]

Insured by the NCUA.

[Ken Coleman]

All right. Casey is joining us now in Wyoming. Casey, how can we help?

[Caller]

Hey, thanks for taking my call. I'm trying to get some Input or advice on. I started building my. Building a home on a property that I own. And I'm getting to the point where it's getting difficult to continue cash flowing it. And I'm debating on just continuing down that path of cash flowing it or if I should take out a construction loan for what I need to do to.

[Ken Coleman]

How much more do you need to finish?

[Caller]

Probably a hundred thousand dollars to. To finish out where I'm at.

[Ken Coleman]

So 100 grand is what you need to either cash flow, which is going to take you longer, or your idea of a construction loan gets it to you and you can finish this house by what time?

[Caller]

If I took the loan out, I could probably finish it, I would think next spring. I mean, we're heading into where I'm doing all this, all the work myself physically. So.

[Ken Coleman]

And so if you cash flow it, how long will it. It estimate to take?

[Caller]

So probably. Probably another two years. And that's kind of where the.

[Ken Coleman]

Okay, and is this where the difficulty is? I get it and I'm digging a little bit here to get full perspective. So is this your dream home and you guys are already in a home that you can easily afford? What I'm trying to figure out here is, is there financial pressure to finish this house? Like, what is the status of this house?

[Caller]

So I. I bought the acreage. It's. It's 40 acres. And I bought the acreage four and a half years ago with the plan of just moving out there and building the house over a couple of year period. And then some things in life changed and most of the money that I had saved up for the project went away. So.

[Ken Coleman]

Okay, so the plan was to live out there on the 40 acres in some type of a temporary situation.

[Caller]

And that's where I am now. I'm in an old. It's an old single wide trailer on the property. So I'm building. I'm building, you know, right next door to where I'm at.

[Jade Warshaw]

Okay.

[Caller]

But it's. It's just me and my. My two kids and yeah, that little trailer. So, yeah, it's just getting to the point where a cup. I've been doing it for three years and a couple more years.

[Ken Coleman]

Yeah. So essential. The only. So this would be like taking out a mortgage of 100 grand is what I'm hearing.

[Caller]

Right. Plus I do owe some on the land itself. What is your land outright?

[Ken Coleman]

What do you owe on the land?

[Caller]

I owe 130 on the land.

[Ken Coleman]

Okay. So if you were. So if I'm in your shoes, I'M going to, I'm assuming you know the numbers. But what do we, what's our, what will be our combined. I'm going to call this a combined house payment. That's what I'm looking at here. Because the land and the home. What would be that combined mortgage payment?

[Caller]

It. Well, It'd be a, a 15 year rate on 250,000.

[Jade Warshaw]

Can you afford that at 25.

[Ken Coleman]

Yeah.

[Jade Warshaw]

Of your take home pay?

[Caller]

Yeah, I don't, I don't think the payment is, is that big a deal.

[Ken Coleman]

No. Is it underneath our 25% threshold? So 25%.

[Caller]

Right. Right at.

[Ken Coleman]

Okay then, then I don't have an issue with this because it's like a, it's like buying a home and I don't think living in this trailer with the two kids is sustainable for much longer. So. Yeah, this is not what we would consider an irresponsible home purchase. That's essentially you're doing it a different way, but it's the same idea. Am I right? I want to make sure.

[Jade Warshaw]

Yeah, right on.

[Caller]

I guess there's. Well, because I am not a contractor, I can't qualify for. I would need to hire a general contractor and get somebody else involved in my business to. They won't loan and it makes sense. They're not going to loan somebody that's just building a house. You bring a general contract.

[Ken Coleman]

Sure, of course.

[Jade Warshaw]

What's your problem with that? You don't want a general contractor. Is that the biggest problem? You want to do this all your own. Is that the biggest thing?

[Caller]

I mean that's a big thing. And also, I mean there's, I guess there's a pride component of it where I had a plan to cash flow building.

[Ken Coleman]

I have planned to dunk a basketball in a game when I was in high school and it turns out i5 9 and couldn't jump so I had to deal with it and become a pass first point guard. Life throws you things. No, I'm just being honest.

[Jade Warshaw]

No, no, no.

[Ken Coleman]

You're swallowing the pride. I don't care that you want to finish it yourself.

[Jade Warshaw]

Well, I do because here's the thing. You do. I do because there's, there's that. Because the, the financial side of it, there's not a wrong answer. If you want to cash flow, cash flow. If you want to get the mortgage, get the mortgage. There's not a wrong one. Cash is better. But for time we would have said, yeah, go ahead and get the mortgage. But then you turn around and said, well here's the Thing. I want to build this thing. I don't want to hire a general contractor. So now we're talking about other things. We're talking about values. And so if you say to me, you have to then decide what's it worth to me to have the timeline, do I want to sacrifice timeline to have the values I want, or do I want the values at the sake of the timeline? That's really what it's about.

[Ken Coleman]

Or do I want my kids and hate my life all to keep my pride intact?

[Caller]

I mean, that's the thing. Yeah, the kids don't really get a vote in it. They're.

[Ken Coleman]

I'm not talking about the kids.

[Caller]

Say they'd rather have the new house.

[Jade Warshaw]

You hate the kids.

[Ken Coleman]

I'm talking about you, brother. You're the one that's on the phone and you're the one that talked about. Everybody heard it on your voice. I don't, I'm with you 100. The kids don't get a vote at all. I don't care what your kids think. Think I'm with you on that, but I think you're the one going, I don't think I can stay in this trailer with this kid.

[Jade Warshaw]

How old are they?

[Ken Coleman]

Am I right or am I wrong?

[Caller]

The, the kids are 6 and 8.

[Ken Coleman]

So you didn't answer right.

[Caller]

But they're not, they're not going to know if it's two years old. They're not really.

[Ken Coleman]

All right, let me, let me come at this a different trailer. But can you live with these kids in this trailer for two more years?

[Caller]

Well, you can do anything. I mean, my, that's what I said. You just have kids in a little two bedroom house.

[Jade Warshaw]

That's what I'm saying. You have to decide. So only you can decide because Ken will say, hey, and my, if it were Ken Coleman, he would say, I'm taking the loan.

[Ken Coleman]

Well, if it were me, I'd never even be in a trailer on 40 acres. I don't like to sleep on anything less than 700 thread count. And if, yeah, you know, I'm not an outdoorsy sleep guy. All right, I'll be outdoors and then we take a shower and we stay in a nice room. But I, I, here's what I'm getting at. This is up to you. I just walked you into it and you went, well, I can, I can do anything for two years. Well, then there's your answer.

[Jade Warshaw]

Yeah, I think you just want to cash.

[Ken Coleman]

If to Jade's point, your pride is like building this thing yourself. And it's really important to you. I'm not going to poo poo that right. I said swallow it and get the house done. But that's when I thought you were angst about staying in this trailer. If you're going, I can stay in the trailer. I can do anything, Ken. For two years. Then I think that's your answer. So you build it yourself, and then you agree, and then you take two years and the kids are six and eight. They don't know, you know, Get a pup tent in the backyard. When the weather's nice in Wyoming, the kids can sleep outside. You know, I do whatever you want. It's your 40 acres. I was trying to, like, say.

[Jade Warshaw]

Yeah, I hear you.

[Ken Coleman]

It's okay for you to take out a loan, but this is before you threw the. It's important to me to build it myself.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Again, I can't even process. I can barely put gas in my car.

[Jade Warshaw]

Do you have tools? Tools? Do you have any tools?

[Ken Coleman]

I do, but it's limited to the socket wrenches. The. I got a cool little set of those L Wrenches.

[Jade Warshaw]

Wait, no, that's the stuff that comes.

[Ken Coleman]

I do have a. I got one of those little battery powered drills that has a Phillips head and then a normal. But I hire the people.

[Jade Warshaw]

It's called a flathead.

[Ken Coleman]

What is it?

[Jade Warshaw]

Flathead.

[Ken Coleman]

See?

[Jade Warshaw]

No, that's all I know. I'm just making that up. That's all I know. I don't know.

[Ken Coleman]

I'm gonna say hire a contractor.

[Jade Warshaw]

Yeah. Yes.

[Ken Coleman]

Because I got nightmares in my mind of building this house and. But you know, look, man, you're. You're a man. You live in Wyoming on 48.

[Jade Warshaw]

Right? Okay.

[Ken Coleman]

This is something different. This is a different paradigm for me. I go to Wyoming in a postcard.

[Jade Warshaw]

Yes.

[Ken Coleman]

I go, oh, that's. That's. That's nice.

[Jade Warshaw]

I go to Wyoming when I watch. What was that Kevin Costner show?

[Ken Coleman]

I don't know.

[Jade Warshaw]

What was the show? That was big a show.

[Ken Coleman]

Remember the Yellowstone?

[Jade Warshaw]

Yeah. That's the only time I go, yeah.

[Ken Coleman]

Oh, yeah. No, I love that. But see, I'm in my. I'm in my living room with a nice blanket, you know, hot cup of tea. Kevin Costner's roughing it. He's cold, and you're like, ooh, look at him. I'm like, it will never be me. I get a little shiver, and I tell Stacy to turn the heat up.

[Jade Warshaw]

One of my favorite things about you is when you told me about your. Your robe and how comfortable your robe was.

[Ken Coleman]

My robe is next level. It goes all the way to the ankles. Restoration Hardware. Super plush. It's great, folks. It's like wearing a Snuggie, but you have freedom.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And I can move on arms and legs. Yes. It's a great robe. I think every woman should buy my robe for their man in their life. Restoration Hardware.

[Jade Warshaw]

Ropes over tools. Robes over tools.

[Ken Coleman]

Which one are you going to use more? It's pretty easy. I'm using my robe. 365. Hey. If you're tired of living paycheck to paycheck and feeling like you can't get ahead, you need to join one of our free Every Dollar trainings. We've got one every week this month, and they're all hosted by one of our Ramsey person. What are we doing? We're going to show you how to stick to a budget and even find $9,000 of margin using every dollar so you can get out of debt and then begin the process of building wealth. You get to ask questions during live Q and A. You can sign up for [e-mail] webinar ramseysolutions.com webinar Esther joins us now in South Carolina. Esther, how can we help?

[Caller]

Hello. Thank you for taking my call. I'm just trying to figure out a game plan. I'm thinking about leaving my husband. I don't work. We have two kids, and being a single mom is potentially in the future for me. I'm just trying to figure out how I'm meant to navigate this.

[Jade Warshaw]

Okay, okay. You're not working. You're thinking of leaving your husband. Tell us more about that part. Is there a danger?

[Caller]

I wouldn't say there's imminent danger. We've had a domestic violence issue before. It's when I was pregnant with my first. My first is going to be two in a couple of weeks. And I literally just had a newborn on Saturday.

[Jade Warshaw]

On Saturday.

[Caller]

On Saturday, Yeah.

[Jade Warshaw]

Oh, my gosh. Okay.

[Caller]

And I moved from the UK about three years ago. We've been married for about four years, and I've only worked, like, short stretches of time since being here. I'm in the medical field. I'm a medical professional. But just with having the babies and the exams, I haven't had, like, the time to just physically just do my exams to be a pharmacist over here. So I haven't been. Oh, got it working.

[Ken Coleman]

How much time and how much money would it take take to get those exams done and essentially become qualified or current?

[Caller]

There's one exam that Happens every October over here, maybe about 3,000. I've literally only got about 700 in savings. But I just don't, I. My dad was abusive is something I work on for sure. But I don't know whether to call this abusive just because I, I, I'm sorry. Just because I'm not getting beat down 24 7.

[Jade Warshaw]

Of course.

[Caller]

Hey, I need to, I need to figure out something.

[Jade Warshaw]

Okay. First off, yeah, you're right. Domestic violence doesn't mean you're getting beat down 24 7. It can be, it doesn't have to be to that extreme to be domestic violence. Okay. I was, I want to know what's going on because when I asked you earlier, you said not imminent, but then you went on to say that, you know, when you were pregnant, there was an incident which to me is, is, is pretty crazy. But I just want to validate to you that any behavior that is in, they're attempting to intimidate you, they're intimidating, attempting to isolate you, frighten you, terrorize you, threaten you, hurt you, like any of that, even if it's just a threat. Okay. That's not normal. And you shouldn't be in that environment, especially with babies, but even without you, shouldn't you, you, you don't tolerate that more than once.

[Ken Coleman]

Do you have anywhere you can go before, like let's forget about the legal separation or divorce piece. Let's just say if, if you're going to take some of these steps before we talk about the finance stuff, do you have friends, family in the area that you could flee to and, and be safe with?

[Caller]

I mean, I've got the only family, I've got other in laws. It can be a bit difficult. Because of the first incident? Well, yeah, I don't know whether it's a cultural thing. I got a lot of the blame for it.

[Jade Warshaw]

Yeah.

[Caller]

You can't.

[Ken Coleman]

They don't. No, I can just tell you right now they're not part of it. So the answer is you don't have anybody.

[Jade Warshaw]

What about a church? Have you gone to church? Have you visited any churches in the area?

[Caller]

I forgot a church again. They were, they were aware of the first situation.

[Jade Warshaw]

That's fine.

[Caller]

They were a bit fit in this. So I haven't, after the first situation happened, I just kind of kept myself to myself and kind of, you know. Yeah, sure, been, been safe in the way I've reacted to things. I don't get myself into a predicament, but.

[Jade Warshaw]

Yeah, but I don't like that you're feeling like you're the one getting yourself into the predicament. It's not you, it's him. And I want you to. When you get off this call, call a. I want you to call the hotline for domestic violence and domestic abuse. I. I think you need to call and talk to someone, because I understand if you don't want to share with us what's exactly going on, but you need to share with someone that's going to be able to advise you. And I'd be looking into shelters in the area, because what it sounds like is he sounds volatile to me, and it sounds like you can't. Is that right?

[Caller]

Yes.

[Jade Warshaw]

Okay.

[Caller]

He definitely is.

[Jade Warshaw]

Okay.

[Ken Coleman]

Yeah.

[Jade Warshaw]

I'm sorry. And you. You're not in any position to be able. You never were. But now with a newborn on Saturday, you can't defend yourself from this person. And they clearly don't care if you were pregnant, if you have a newborn on your hip. So you have to go someplace else. And I hate that for you because you're supposed to be able to have a newborn and come home to a safe environment. And I'm so sorry that that's not the case.

[Caller]

Okay.

[Jade Warshaw]

I'm so sorry. Here's the thing. You get. You. You call the number, you find a shelter, and then you get to a safe place, then your brain can kind of open up a little bit because you're safe. We're going to make sure to put you in contact with a financial coach, and we're going to make sure that they talk with you, help you figure out what's next.

[Ken Coleman]

Do you have. Yeah. And speaking of what's next, I do want to try to give you. And Jade's right, getting you safe and allowing your brain to. To slow down and function to its best is huge. But you did call and say, how do I financially prepare for this? And if I were in your shoes, I would be asking friends or family in the uk that's where your base has been. And I personally would have zero pride issues with asking for $3,000, because if $3,000 was what I needed to become a pharmacist in the United States, where you can make really good money, have fabulous benefits for those littles, I would be. I have no problem asking for $3,000. And I wouldn't say borrow. I didn't say borrow.

[Jade Warshaw]

I need to have it.

[Ken Coleman]

We don't ask, we don't borrow. So I want to make sure, because I can hear the people going, oh, no, I didn't say borrow it. I'm saying in your situation, I would be very comfortable going to family and friends going. I am in a desperate situation and I do not want to borrow this money. If you could find, you know, do.

[Jade Warshaw]

You have people in the uk, real friends?

[Caller]

All of my family.

[Jade Warshaw]

Okay.

[Ken Coleman]

Well, I believe we could scrape $3,000 together out of family who love you and for the sole purpose. Okay. In the situation when it's right to, to finish out this qualification, get a current on your, on your stuff and that's not too much to ask. And don't borrow it. This is. You're going to ask people. I need you to help me. I have a very specific need. By the way, a really good church would step up in that situation as well.

[Jade Warshaw]

It would.

[Ken Coleman]

And, and so because this gives you.

[Jade Warshaw]

Freedom, I'm just wondering if you don't. I mean, I think what Ken said is a great place to start. I'm just going to tag onto that list. Is it better for you to go back to the UK temporarily to be around supportive people?

[Ken Coleman]

Can you take the kids, kids to the uk or is there sometimes. I, I, this is outside of my legal knowledge.

[Jade Warshaw]

That's true. That's true. That doesn't want to. That's a good point.

[Ken Coleman]

I'm a little nervous with that.

[Jade Warshaw]

Yeah. That's a good point.

[Ken Coleman]

You know what I mean?

[Jade Warshaw]

Yeah.

[Ken Coleman]

Now it makes complete common sense.

[Jade Warshaw]

Yeah.

[Ken Coleman]

I just don't know legally.

[Jade Warshaw]

No, you're right.

[Ken Coleman]

I think that's a dangerous situation. I would not do that.

[Jade Warshaw]

Okay. Yeah. Bad plan.

[Ken Coleman]

Given that she's not a US citizen, so you don't want to complicate that things. But I, I think safe first. Okay, Safe. Then we work on stability, whatever that looks like. Short term. That means if you're working at a Walmart, you know, and there's an old lady in the church, you're willing to watch the kids. I mean, because you got a challenge with child care, which is very expensive. So we got to get safe, we got to get stable. But I, I'm trying to encourage you that you becoming a pharmacist as quickly.

[Jade Warshaw]

As you can, it's gonna set you free.

[Ken Coleman]

And in getting hired is gonna be a game changer. You can, mama, you can take care of those babies on a pharmacist salary. And you can, you'll be fine.

[Jade Warshaw]

Just promise us you'll leave that environment. Promise us you won't go to the in laws because they're not for you.

[Ken Coleman]

That's right.

[Jade Warshaw]

And he's there.

[Caller]

Yeah, right.

[Jade Warshaw]

And just call us anytime, Esther. True, truly. Anytime. Don't, don't lose contact with us because we want to follow you.

[Ken Coleman]

Hang on the line. Kelly's amazing. She's going to get you plugged in where we can plug you in. So hang on. All right. Today's Ramsey show question of the day brought to you by why Refi. If you have been turned down by for refinancing your defaulted private student loans, you're not alone. And here's the good news. You're not out of luck. Why Refi exists to give people with you, excuse me, like you, another shot. Go to why refi.com Ramsey that's the letter y r e f y.com Ramsey it may not be available in all states.

[Jade Warshaw]

Okay. Today's question comes from Sydney in Colorado. So she says, my husband and I are relatively new to the baby steps. And I wonder if it's normal to find it hard to transition from using credit cards and thinking you have all this extra money to not using credit cards and realizing you don't have as much money as you thought you had left over every month. If it is normal, does that feeling quickly go away or am I just going to be uncomfortable for the next few years? Oh, my gosh. What a great question, Ken.

[Ken Coleman]

Actually, really good, good.

[Jade Warshaw]

You know, I think that, Sydney, what you're feeling is completely normal because the truth is. Yeah. When you're on a credit card, it is a safety blanket, right? It is. It's a crutch. And what happens when you have a crutch, Ken, you know this. If you, if you wear lean on it, you lean on it. If you wear a cast for too long, if you sit in a chair for too long, the muscles, they atrophy. You know what I'm saying? And before you know it, doing things that should be normal range of motion, normal things become more difficult because you have atrophied that muscle. So it's the same thing with your money. It is a skill and a learned skill to be able to manage your money, the actual money that comes home in your check. And when you lean on credit cards, you can be willy nilly. Right. You don't have to be as on it. You know that if you break the budget, it's okay because I've got this extra, you know, the limit is here and I can go beyond and there's no real guardrail there. So I think what's happening is for the first time, you're like, oh, I have boundaries. Yeah, I have limits. And I must depend on my financial, you know, fortitude. And my own kind of willpower to stay within those boundaries. And yeah, that's a skill to learn over time. And I think that you're on the right track and it could take a while. You know, we do say that when people build a budget can, you know, what is it, 90 days before they feel like, right, I got it. I can stick to this. I can start to live like this. And, you know, for you, I don't know how far out of bounds you guys were going, but yeah, it's everybody. Lifestyle change.

[Ken Coleman]

That's right. And I would, I would just give you, give yourself grace because everybody's different.

[Jade Warshaw]

Yeah.

[Ken Coleman]

As to their discipline, I know some people that they, they get this Ramsey plan. They're like, oh, got it.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And they're just such system disciplined people that it's just like, okay, I'm in lockstep. And then there's other people that it takes a while. And here's what I would tell you, that once you finally get over using credit cards, what I found to be true for us years and years ago, we finally cut ours up and that whole deal. And it's kind of like when you give up something food wise.

[Jade Warshaw]

Oh, yeah.

[Ken Coleman]

And what happens is your appetite changes. And I think credit cards are much like, like food or beverages. And I'm going to give you a specific example. In my life, years and years ago, I was a sweet tea animal. I mean, I drank a lot of sweet tea. I thought it was a rite of passage because I was born and raised in the South. You know, it was kind of like water and sweet tea. And I kept looking for sweet tea in the Bible. I couldn't find it.

[Jade Warshaw]

Oh, man. No, it ain't there.

[Ken Coleman]

That's how much I love sweet tea. And I cut it out as a part of a massive physical goal. And this is the only thing I can describe in my life that means this, where your appetite changes. And so I was very disciplined for at least a year, Jade, to not have sweet tea. And then a year turned into two years and I just had all these other options. And I remember one day I was at some thing in the summer and somebody had a gallon of chick fil a iced tea sitting on that picnic table. And it was just going. And. And you know what I did?

[Jade Warshaw]

Yeah.

[Ken Coleman]

I poured a little bit over some ice and I took a drink. And I promise you this is the truth. It was disgusting.

[Jade Warshaw]

I believe you.

[Ken Coleman]

And here's what I learned. I talked to a nutrition, a nutritionist about it, like, weeks later. And I Told that story. And she said, yeah, your appetite changed.

[Jade Warshaw]

Yeah, it's real.

[Ken Coleman]

And so I think as long. I know that was a long winded metaphor, but I can't help it. I'm a preacher boy. Okay. I think that once you get off of credit cards and you really, truly follow the Ramsey plant. Excuse me.

[Jade Warshaw]

And you really.

[Ken Coleman]

I'm not getting choked up emotionally.

[Jade Warshaw]

Are you crying?

[Ken Coleman]

Yeah.

[Jade Warshaw]

Listen, I was ready to step in for you.

[Ken Coleman]

I'm verklimped. Yeah. I just believed, like the sweet tea, that the idea of a credit card, when it pops back up on the picnic table, that you'll go, nah, I don't want what comes with that. And for me, it was just. It was too sugary.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And. But what had changed was my appetite. It wasn't discipline in the moment. Well, it was my appetite change. So I hope that helps. And I think that's for a lot of people to go, okay, man, I don't know if I can really get myself away from these credit cards. But I'm telling you, when you change your lifestyle and you change your habits, your appetite changes with it, and that's game changer stuff. So I hope that helps.

[Jade Warshaw]

If I had an organ, I'd have played the organ behind you, but I didn't.

[Ken Coleman]

Don't get me started. I'll take an offering. I mean, we'll do an altar call. I mean, let's go, man. I'll give you three points and an offering here, quick. No, I hope that encourages people. And it's same way with debt. All right, let's get to Kyle, who's joining us now in Charleston in South Carolina. Kyle, how can we help today?

[Caller]

Hey, Jaden. Ken, how are you? Thanks for taking my call.

[Ken Coleman]

Sure.

[Caller]

So I just finished baby step three.

[Ken Coleman]

Congrats.

[Caller]

Thank you. For the last couple of years, getting out of about $80,000 worth of debt. And I just finished my emergency fund at this point. Thank you. At this point, I have no savings outside of my emergency fund, and I'm looking to start budgeting for the first time.

[Jade Warshaw]

So you did all that without a budget? How did that happen?

[Caller]

It was everything that was not living expenses was going, going on to the debt.

[Ken Coleman]

So basically insane discipline. Yeah.

[Jade Warshaw]

You just went hard in the paint. Good for you. Good for you. Okay, so we're making a budget.

[Caller]

Right. And I. I appreciate the structure of the baby steps. I think that helped me out a lot while going through the process, and I wanted to see if you guys have any similar rules or best practices that I'm Able to stick to as like a first time budget or making a budget for the first time.

[Ken Coleman]

Great question. I love this. All right, Jade, so here we go. The guy's got his fully funded emergency fund.

[Jade Warshaw]

Yeah. So first off, yeah. I would recommend the same budget that I use. The same budget Ken uses is called every dollar. We both really like it. Everybody around here seems to love it. It's great.

[Caller]

Great.

[Jade Warshaw]

And so once you have that budget at the top of it, you're just going to put in your income, right? Which, what is your income?

[Caller]

Every month it's about 100.

[Jade Warshaw]

Okay.

[Caller]

Oh, I'm sorry. Annually.

[Jade Warshaw]

Annually. Okay. So you're going to plug in your money. You know, I don't know what it is after taxes. I. Whatever that is. So $8,000 right there at the top. Then you're going to plug in all of your expenses. Now, when you're doing the budget, you're going to keep in mind what your next goal is. Right. And for you, the goal is I need to be investing 15% of my income. Income. So let's say, let's just pretend you start the budget just to see the money you have. Let's pretend you start the money the. The budget without accounting for that. Just to see, okay, here's the margin I actually have with the life that I actually live. Then you're going to say, well, wait a minute, I do need to budget for this 15%. What will it look like when I pull this money away? Because that's going to go into retirement. And now am I able to budget less? Less that 15? And so that's kind of the exercise that you need because that is the drum that you're going to be beating from now until the time that you retire. You're going to be investing 15 of your income. Then from there it's like, okay, what are the other things that I want to do with my margin? Do I want to put savings anywhere else? Am I thinking of buying a house? Am I thinking of buying a, you know, saving up a down payment? And by the way, is that part of your goals?

[Caller]

Yes, it is.

[Jade Warshaw]

Okay, so those are the two things that are going to be driving the driving forces behind your budget right now. Does that make sense?

[Caller]

Yes, ma'.

[Jade Warshaw]

Am. Alrighty. All right, Kelly's gonna pick up. Kelly. You know what to do.

[Ken Coleman]

Oh, the assist to Kelly. You gotta love it.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You know, this is exciting. I just want to say yay. Yay. Yay, Kyle. And the fact that you went so, so hard and fast to get to baby Step three, and we're like, I don't even know how to budget. I mean that again. I applaud that. And I love that you're now leaning in. You're on your way to wealth, young man, and that is exciting.

[Sponsor/Announcer]

Many of you listen to the Ramsey show because you're sick and tired of getting nowhere with your money. You work too hard to live paycheck to paycheck with no money in the bank. But here's the deal. Just listening to the show won't change that. If you want different results, you have to do something different. We've helped millions of people save money, ditch debt and build wealth. And you can too. But you gotta have a game plan. And that begins with our get started assessment. Go to ramseysolutions.com start now. Take the free quiz and get your free step by step action plan. If you've had it with money stress and are ready to take control of your money for good, go to ramseysolutions.com startnow.

[Ken Coleman]

Welcome back to the Ramsey show alongside Jade Warshaw and Ken Coleman. Let's get right to Josh here in Fort Worth, Texas. Josh, how can we help?

[Caller]

Hey guys, thanks for taking my call this afternoon. I have a question about buying my son a vehicle. A little bit of background. His mom and I have been supporting up for about eight years now. He's 17 and recently got his license and I've been trying to, to talk with her about getting him a car for about the last year now. And she doesn't want to, to participate financially because his, his grandparents on her side are willing to let him use a car that, that they have. It's still titled in their name. It's insured on their policy and they added him to, to, to their insurance and.

[Jade Warshaw]

Cool.

[Caller]

I don't think it's the right kind of car. It's, it's kind of a sporty, you know, sedan that an inexperienced 17 year old probably shouldn't be driving.

[Jade Warshaw]

What is it? Tell us more for real.

[Caller]

It's, it, it's an Acura. It's an accurate to. It's, I think it's about 15 years old, but it's, you know, 300 horsepower and he got his license like two weeks ago.

[Ken Coleman]

You think that he's going to drag race in this? What, what is the concern?

[Caller]

No, but he's, he's, he's pretty impulsive kid. What would you ready for him to get his license?

[Jade Warshaw]

I'm looking online at an Acura TL that's 15 years old.

[Ken Coleman]

That is Not a impulsive.

[Jade Warshaw]

I am not seeing any. Unless I'm missing something.

[Ken Coleman]

All right.

[Caller]

By the job, got a little get up and go.

[Ken Coleman]

It's a 15 year old Acura. Nobody thinks of that car as irresponsible for a kid. In fact, an Acura is a fabulous car. A 15 year old Acura. What do you want to buy? And let's, let's run this whole risky thing. I'm dying to know. What do you want to buy him?

[Caller]

I'm looking more like Honda Civic.

[Ken Coleman]

You realize Honda, Honda makes Acura.

[Jade Warshaw]

But that's the one folks trick out in race is the Honda Civi. That's like what they do.

[Caller]

It's like pure stock.

[Ken Coleman]

It doesn't matter. I, I.

[Jade Warshaw]

Wait a sec.

[Ken Coleman]

Okay, here's the deal. You will. Okay, I'll get out of your way, Jay, because I think you're revving up and I like when you get revved up. I. If I'm in your situation, I wouldn't spend my money on buying this kid a car. The grandparents on the other side are doing you a solid, man. Take a. Don't look a gift horse in the mouth is the old phrase.

[Jade Warshaw]

Or at least try it out first. At the very least let him try with the Acura. And if he, if he races it, then get him a Civic to race.

[Ken Coleman]

But that's his problem. But the fact that you don't want your 17 year old, you don't think he's ready for a license is also an issue. That's, you know, I mean, is any 16 year old ready? I mean, I know when two of my three. I'm getting ready to have a third one driving. Y' all pray for me. I'd like to keep my hair, but I remember when the first two started driving Jade, I was absolutely mortified, terrified. I'm letting them drive a vehicle. It didn't matter if it was an Acura or a Yugo. If you people from the 80s remember that car, it was basically a lawnmower. You know, it doesn't matter. You know, it's it. The very concept of driving a car is dangerous. So his impulses and all that, that's a bigger issue. You getting him a Civic versus him giving him an Acura is. And I'm just telling you as objectively as I can, you called us. You're worried about the wrong things. And I would take the gift.

[Jade Warshaw]

I would too. I listen, I second that. I 100. I thought you were gonna say they're giving him a brand new 2025. You know, Lamborghini. Like I was expecting something like that even then.

[Ken Coleman]

I take that and I just ride with the kid. But, hey, that's me, you know?

[Jade Warshaw]

Yeah. I. I think that you have a gift here. And don't block the blessing.

[Ken Coleman]

Well said, Josh. We've spoken. That's the gavel right there. You're gonna do what you're gonna do. I got a feeling.

[Jade Warshaw]

Do you remember when I was in high school, the car to have, like, if you had this car, it was.

[Ken Coleman]

Like, oh, I'm very excited. I'm a little older than you, so I'm anxious to see what this is.

[Jade Warshaw]

Well, and I also grew up in a country town. If you had a Trans Am. Oh, like, that was the business.

[Ken Coleman]

It was speech.

[Jade Warshaw]

Speed.

[Ken Coleman]

Speed on wheels.

[Jade Warshaw]

Oh, man.

[Ken Coleman]

And it was funny about a Trans Am. It's honestly a piece of crap.

[Jade Warshaw]

Yeah.

[Ken Coleman]

But it looked fast.

[Jade Warshaw]

It looked so cool. It had the, like the bird on the. On the. Oh, gosh.

[Ken Coleman]

Oh, the bird.

[Jade Warshaw]

They had the bird on the.

[Ken Coleman]

I know. That's from what's the smoking. The Bandit. Yeah. Burt Reynolds. Come on, man. Now I'm dating myself.

[Jade Warshaw]

Yeah, there's like.

[Ken Coleman]

There's like a whole demographic that's like. Did he just say Smokey and the who?

[Jade Warshaw]

Listen, I'm gonna act like I don't know what you're talking about.

[Ken Coleman]

You do know, because you're the real deal. Dan is joining us now in Alabama. Dan, how can we help?

[Caller]

Hey, Ken, Jade, I'm a new listener.

[Ken Coleman]

Welcome aboard, sir.

[Caller]

Well, thank you. My wife and I of almost 40 years are searching for peace. We're sick and tired of being sick and tired.

[Ken Coleman]

Good.

[Caller]

We sold our family small business of 20 years back in 2021. The buyer made it 18 months and bankrupted it.

[Jade Warshaw]

Oh, no.

[Caller]

And that really has thrown our retirement into a spiral.

[Ken Coleman]

What were the terms of the deal?

[Caller]

Well, it was an owner finance deal for three years, and, you know, the deal was that he would operate two years and be able to get SBA financing.

[Ken Coleman]

No, I get that. But over the three year period, when the three years was done, what were you expecting to be paid?

[Caller]

About a half a million.

[Ken Coleman]

So you were counting on a half a million and I'm guessing you're getting zero?

[Caller]

Well, we didn't get much.

[Jade Warshaw]

Okay.

[Ken Coleman]

You have any other retirement accounts?

[Caller]

Well, I just. Well, we. In trying to keep the facility operating because we had tenants renting out part of the facility. I had to keep that up and going. So we have kind of blown through what. And what retirement we had saved up now.

[Jade Warshaw]

What kind of facility is it? What?

[Caller]

Like, do you still have any manufacturing facility? Okay, it's a large facility.

[Ken Coleman]

Do you. Who owns that? Who. Who has ownership? I'm assuming the new. The new owner. You still kept ownership?

[Caller]

Yeah, I leased. I leased him. The. He bought assets of the.

[Jade Warshaw]

All right, understood.

[Ken Coleman]

So. So you have zero. Yeah. Well, tell me. Give me real numbers. How much did you get from the sale of the company? You said you got a little. Not much. We need real numbers here. What do you have?

[Caller]

We got. We got less than 100,000. 90.

[Ken Coleman]

80, 75.

[Jade Warshaw]

Okay, 90.

[Ken Coleman]

Okay, so 90,000. And then you have zero retirement money.

[Caller]

Right? Other than. We just received an inheritance Ira from.

[Jade Warshaw]

How much is that?

[Ken Coleman]

How much?

[Caller]

It's now at a hundred thousand.

[Jade Warshaw]

Okay. How old are you guys?

[Caller]

I'm 64.

[Jade Warshaw]

Okay.

[Ken Coleman]

Okay. And how much is the building worth if you were to sell it today?

[Caller]

Have it now listing for one point. 1.375.

[Jade Warshaw]

Okay.

[Ken Coleman]

Okay.

[Jade Warshaw]

So go ahead.

[Ken Coleman]

Well, here's what we're doing.

[Caller]

We.

[Ken Coleman]

Let's. Let's hold this because there's more to. There's more work to do here. So hang on the line. Keep those numbers handy, Dan. We need those numbers, and we're gonna pick up where we left off. All right?

[Caller]

Okay.

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[Ken Coleman]

Hey, don't just say set goals in 2026. How about learning how to reach them? The 2026 Ramsey Goal Planner is here, and it's packed with monthly content from Jade, Rachel and John Deloney to help you stay on track with your money, faith, and relationships so you can follow through on your goals. And these sell out every year, so don't wait. You can get yours for 49. [e-mail] store or click the link in the show Notes. If you're watching on YouTube right now, I've got it in my hands here. Yeah, this is no joke.

[Jade Warshaw]

It's nice.

[Ken Coleman]

I mean, the. If you judge a book by its weight, this is valuable.

[Jade Warshaw]

Substantial.

[Ken Coleman]

I could knock a man out with this with very little effort. It's just that substantial. A lot of tabs. And I think that's probably a good feature for a planner as well, don't you think?

[Jade Warshaw]

And it's a little bit smaller than last year, so it's easier to just.

[Ken Coleman]

Smaller than last year? What was last year? The scrolls.

[Jade Warshaw]

It was.

[Ken Coleman]

Wow, this is substantial. I really am fascinated by it. And you know what else? I like this little. What do you call this?

[Jade Warshaw]

The binder. It's continuous, so it can't come off like last year. Last year we had a little bit of problems with it. This year it's completely solved. It's great.

[Ken Coleman]

I feel like you might have engineered this, not only contributed to it, you're speaking with great knowledge about all this.

[Jade Warshaw]

I just. Well, I'm part of the product and I. I care about it. I love it. It's great.

[Ken Coleman]

I love it. There you go. All right, so we're going to come back to Dan and Dan. Dan kind of set this up here. Dan sold his family business, and the person who bought it was Owner Finance. That means they were paying Dan over three years and did not go well. So we're running through the numbers. So, Dan, we're coming back to you. Let's recast on the numbers to make sure that Jade and I are completely caught up. You walked away with $90,000 cash from the sale of this company. Is that correct?

[Caller]

Correct.

[Ken Coleman]

Okay. And you were expecting to walk away with 500,000, is that also correct?

[Caller]

That is correct.

[Ken Coleman]

All right. And you've depleted your retirement funds down to basically nothing to kind of keep this building that you still own afloat. Is that correct?

[Caller]

That is correct.

[Ken Coleman]

All right, great. And so what did you tell me? The. If we were to sell this building today and you have listed it, what do you expect to actually walk away with.

[Caller]

The equity? I would hope to walk away with around 400,000.

[Jade Warshaw]

Okay. And just to clarify, there's no business running out of it. It's just a building. You said you had a couple of renters in there. Is that what I heard?

[Caller]

Well, I restarted a different version of the business that I sold because I had to keep the building going.

[Jade Warshaw]

Yeah. And how is that doing?

[Caller]

Well, my son came on board. He Stopped his career, venture into insurance to join with me and try to.

[Jade Warshaw]

Yeah.

[Caller]

Re Restart the business that we were doing.

[Jade Warshaw]

And how's it going?

[Caller]

Well, it's still not paying for the business, the building and it's just bleeding me.

[Jade Warshaw]

It's bleeding.

[Ken Coleman]

So will you shut that business down?

[Caller]

The building is too big for what, what we are able to do.

[Ken Coleman]

If you sell that building, would you keep that business going?

[Caller]

No, because now my son has decided he wants to go back to insurance. Good move.

[Ken Coleman]

I was going to suggest that. So, so if I, you know, with.

[Caller]

The risk of having to build a whole new smaller facility in order to operate profitably, he doesn't want to take that risk.

[Ken Coleman]

So if I'm reading the situation, if I've got the facts, Dan, correct me here. You were hoping to walk away with 500k over a 3 year period, but if we sell this building, we're going to end up being at 490k now. So instead of 500k later, you're going to be 490 now. Correct.

[Caller]

Well, the 90 is gone.

[Jade Warshaw]

But, but it was still money. It was still money you received.

[Ken Coleman]

Wait, wait. Oh, so you've already spent. Okay. I was under the impression you retained the 90. You're saying it's already been spent?

[Caller]

Yes.

[Ken Coleman]

Okay, but same scenario. So instead of 500k after selling this business, once we get rid of the building, you're going to have 400K?

[Caller]

Hopefully, yes.

[Ken Coleman]

Okay. So the only difference is, is we blew through retirement. How much retirement did you spend?

[Caller]

Probably 250.

[Ken Coleman]

Okay. So that's the number. So when I look at, okay, where we thought we were going to be was 500k in cash and 250 continuing to grow in retirement. Now we're going to be at 400 and zero in retirement. That's the difference. So we've got a $250,000 deficit. Okay.

[Caller]

So you know, my head has just been so wrapped up in all the arms and legs of this thing, I can't seem to critical think my way through these. And you know, I've tried to. We never have been much of a budgeter so have thrown all this mess together on a spreadsheet.

[Jade Warshaw]

I think. I think you've had this for so long and it went away that you didn't want it to go. And so you're kind of trying to grasp at straws to keep it. But I think the longer you keep it, the more loss you're gonna feel. And I get it, you've sunk a lot of time and money and Cost into this. And that's deceiving. Right. You keep thinking, oh, there might be a way that I can react to and get it back, and get it back. But instead you're just losing at a very fast rate.

[Ken Coleman]

Here's a quick question. I don't. Where's your income? I understand the 400 because that was going to be a part of your retirement or were you planning to live off of the 500? In other words, all I want to know right now is how are you bringing in income?

[Caller]

Well, it's through the business that we're operating now.

[Ken Coleman]

But you're about ready to shut that down.

[Caller]

Yes.

[Ken Coleman]

And so now that's our biggest issue. So. So how much money, what do you need to make? What kind of income do you need to replace?

[Caller]

The hope is that I am willing to sell off what is left of the businesses that we are operating.

[Jade Warshaw]

Yeah.

[Caller]

Because there is potential there. I mean, there, there are.

[Jade Warshaw]

What kind of potential? What do you think it would be in dollars?

[Caller]

Hopefully at least another three or four hundred thousand.

[Ken Coleman]

But that.

[Caller]

I think I can resell it again if I can split it up into two segments.

[Jade Warshaw]

Well, now we're closing that gap.

[Ken Coleman]

Well. And we can invest that in retirement and replace the 250 with these numbers. But again, where's our income? If you sell those businesses, you still need some income.

[Jade Warshaw]

Yeah. What will you do?

[Caller]

Yeah, well. And that's. And that's. The next thing is this is all we've ever done. So, you know, manufacturing food is what we know. And in order to duplicate that on a smaller scale, we still have to have expensive facilities. But then we're going through the mind process of like your book is what. What are we really wired to do?

[Ken Coleman]

Well, I get that, but I wonder if. I wonder if you could go work for somebody instead of running the business. You're 65 and you're trying to play catch up. But if we sell all these businesses and stack this cash, if I'm in your shoes, I'm looking to go do similar work, but I'm going to go do it for somebody else in this twilight and allow myself to keep stacking onto retirement. For right now, I'm not thinking that I have to start another manufacturing business. I actually think at this stage with you checking out of all these things and exiting, I would go do similar work work, you know, contract work, go work for somebody else that does it. Is it ideal for you? No. But is it a lot safer and is it a lot calmer and does it help you continue to catch up. Yes, that's what I would do.

[Jade Warshaw]

You also did say, though, and I just want to play this out, you said before, hey, we would be making money on the manufacturing business we have now, but our facility is too large, so we're bleeding because of it. And you said we needed a smaller facility. So my question is, if you sold off the smaller businesses that you've created as a result of having all this extra space, would that create the money you need to have the smaller facility so that the existing business can actually be profitable? And then over time, maybe you just have somebody else come in and run it, like. And that's kind of your, your plan to transition out. Have you, have you thought through that?

[Caller]

Well, we have considered that, but you know, without a son to take. Take longevity. I just don't. I just don't.

[Ken Coleman]

You don't have it in you. I can hear it. I can hear it. You don't have it.

[Caller]

Listen, I've already retired once I get.

[Ken Coleman]

I gotta hear it. That, that idea, while a good idea, I think for you, it's exhausting.

[Caller]

You know, I'm in good physical shape. So. Yes. Going to work somewhere for a little while and stack up some more cash. It's just.

[Ken Coleman]

That's the play.

[Caller]

So much to think through. And.

[Ken Coleman]

And, well, I just simplified it. I just simplified it for you. And you got to be okay with it. Yeah, you got to be okay going. You know what? The deal went bad. It's not my fault that the bonehead ran it in the ground. Maybe I could have done something, but we don't play that game. We're not going to. You're not going to just play armchair quarterback on yourself. Let's move forward, sell everything. Let's stack the cash and let's retire with dignity.

[Caller]

Foreign.

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[Ken Coleman]

Ramsey Solutions is a paid non client.

[Jade Warshaw]

Promoter of participating pros.

[Ken Coleman]

Learn [e-mail] SmartVestor.

[Caller]

Foreign.

[Ken Coleman]

Hey, how you doing with the baby steps? Are you on track? You can take a quick quiz to check your progress and receive a personalized plan just for you. All you do is go to our show Notes, click on the link titled are you on track with the baby steps? And you can complete the quiz. That's a great resource. Let's go to Norman, Oklahoma. Tristan is there. Tristan, how can we help?

[Caller]

Help? Hey, guys. How you doing?

[Ken Coleman]

Good. How are you?

[Caller]

Pretty good. I have encountered a situation. I was not ready for it. I've been listening to you guys for about a year now. And about a month ago at the end of July, I got into a wreck. I was. I goofed. I was trying to work the baby steps out of order. So not the smartest part of my end, but I was trying to get rid of my debt before saving up the nest egg. So I don't have a thousand dollars to help me out with getting a. The. I was in a car accident and it was his fault. He ran into me and told her my car, but I just had liability. Now I don't have transportation and I am trying to find a vehicle off of like Facebook Marketplace and I can't. Can't seem to find one within my price range right now. I have about 700 saved up and that's about all the money I have. And.

[Ken Coleman]

Okay, hold up, slow down just one second here. So, because it was the other guy's fault. Do you have you talked to your insurance people and his insurance people. Are you getting.

[Jade Warshaw]

You should get some money.

[Ken Coleman]

You should get some money on that for the car.

[Jade Warshaw]

His insurance.

[Ken Coleman]

From his insurance for your car.

[Caller]

Yeah. So the thing is, is like I said, I was working on baby step two, and so I was $6,000 before. I was trying to get paid off by the end of the year, but I was $6,000 under and it was a 2016 Hyundai Sonata. And so I. The value is just right around there.

[Ken Coleman]

I'm so confused, bro.

[Jade Warshaw]

So you're saying you want to upside down on the car? Is that what you're saying? The 6K, is that what you were saying? Upside down on the car? Okay, so that's neither here nor there.

[Ken Coleman]

Yeah. What's the car worth? What is the total? When the car was total, what is the number?

[Caller]

So my attorney's been working on that. She has gotten to me. And. And the number that we're looking at is at 5500.

[Ken Coleman]

So you should be getting a check for 5500 from his insurance agency.

[Caller]

But I was told that that was going to go straight to the bank since I'm and since I. It's under a loan.

[Ken Coleman]

That is correct. I apologize. I was so focused on your next car. That's. Okay. So that's gone. And you have $700.

[Caller]

Correct.

[Ken Coleman]

Well, that's a. And don't be looking for a $700 car. You might as well get a bicycle, because that's going to be more dependable. I'm not even kidding.

[Jade Warshaw]

How old are you?

[Caller]

I'm 26.

[Jade Warshaw]

Okay. What do you do for work?

[Caller]

I am a teacher.

[Jade Warshaw]

A teacher. Okay.

[Ken Coleman]

How far away do you live from the school?

[Caller]

I live about 11 miles.

[Jade Warshaw]

Okay, so you're still able to work like, you're not injured from this, are you?

[Caller]

Correct. Okay. No. God was surrounding me. I'm going through PT right now. I am filing an accident injury lawsuit. So we're on the steps of that, but I don't know what to do in the meantime before I get that money.

[Jade Warshaw]

I think you're gonna be on. So the first step is we need to figure out where is there any margin in your budget? Because that's what's gonna be what you're putting towards saving up for a beater vehicle. And in the meantime, you're doing a couple of things called the bus. You're doing. You're taking the cheapest level of lift. You're hitching a ride with.

[Ken Coleman]

How much bicycling have you done in your life?

[Jade Warshaw]

I bicycled the other day to my work workout.

[Ken Coleman]

Did you really?

[Jade Warshaw]

Yeah.

[Ken Coleman]

Okay. The reason I'm asking is, what do you think, 11 miles? How long would it take you to ride 11 miles?

[Jade Warshaw]

I could ride. I can ride a mile in, like, I don't know, like, five minutes. Because I. When I ride to my workout, it's about a mile and a half away.

[Ken Coleman]

Yeah, 55. Yeah. I mean, if it's faster than that. But I. You know, I always underestimate these things.

[Jade Warshaw]

If it's a safe ride, it's pretty.

[Ken Coleman]

Good on the peloton.

[Jade Warshaw]

If it's a safe ride, try it.

[Ken Coleman]

But you gotta do something like that. I mean, that's the real. That's the real, real, Tristan, like, you're going to have to save. What do you think in your budget you could carve out every month to go towards a car?

[Jade Warshaw]

Because you need, like, $3,000.

[Caller]

Yeah, I'm thinking. I'm just trying to. I'm still. I'm still working on trying to get the Every Dollar app, but I'm trying to get those behaviors in. So I'm not too good at it yet.

[Jade Warshaw]

No, no, no. No. Okay, you can do this today. So I don't want you to over make this too difficult today. You go in there and when you get paid from your, from being a teacher, do you get paid twice a month?

[Caller]

Yes.

[Jade Warshaw]

Okay, so what are those checks?

[Caller]

They are 1300.

[Jade Warshaw]

Okay. Okay, so you put both of those eleven hundred dollar checks in there and then you're gonna say, okay, I've got 2,200. Do you teach full time?

[Caller]

Yes.

[Jade Warshaw]

Okay, I've got $2,200 to spend. Spend. And then from there you're gonna, it's gonna give you a place to put all the things you spend money on. So you're gonna put your rent out of there. You're gonna put everything out of there. So when you were paying off debt because you said, hey, I went too fast, I paid off my debt too fast and I didn't do the savings. When you were paying off your debt, how much extra were you putting towards paying off your debt?

[Caller]

Anything I could, I didn't have a specific number I was putting towards it. I was paying my rent.

[Jade Warshaw]

Give me a good month on a good month.

[Caller]

On a good month, 600.

[Jade Warshaw]

Okay, so now that essentially what I'm telling you is that 600, instead of going towards paying off your debt, you're going to stack that for the next two, three months, two months until you have, okay, 1200 plus the 700 you had before, you're going to have about $2,000. Right. So it's like, okay, great, now I'm getting closer to being able to buy this car. If you can put another thousand with it, that's, that's how this is going to work. Now the hard part is usually we would tell people if they're saving for a car, you need to be side hustling, you need to be doing this and that. But for you, it's a slim margin because you don't have transportation. So this is going to be a grind out for you for three months.

[Ken Coleman]

Are you. How much money you generating? Because I'm over here, Jay, just so you know, I'm not.

[Jade Warshaw]

No, I know you're.

[Ken Coleman]

I'm not checking my stocks. I'm looking up used cars. Are you actually near Norman, Oklahoma?

[Caller]

Oklahoma, yes.

[Ken Coleman]

Okay.

[Caller]

I'm South Norman.

[Ken Coleman]

South Norman. How much money have you generated for him with this?

[Jade Warshaw]

He's gonna have. In two months, he's gonna have 2,000. In three months he's gonna have, if he grinds it out, he's gonna have 3,000.

[Ken Coleman]

Okay, all right, so I'm just Doing a check here. You're gonna need, I think, to be safe, another thousand. I'm looking at some. Some cars that, again, will get you from point A to point B.

[Jade Warshaw]

Go lower. I think you can go lower.

[Ken Coleman]

Well, I'm just doing a quick, you know.

[Jade Warshaw]

Okay.

[Ken Coleman]

I'm just saying I. I direct. To see, like, Facebook Marketplace. You probably can.

[Jade Warshaw]

Yeah. Because he's only going 10 miles a day, and then he can. You can slowly. But I like them after that.

[Ken Coleman]

Yeah, but I like the 3 to 4000. I just was playing off of your number. I think 3 to 4,000 is the number, and I would say Facebook Marketplace is a good play, but some of these dealers get. Get really seedy. Well, they're very happy to unload a. Like, Here's a. A 2007 Pontiac Vibe base. I never even heard of this car.

[Jade Warshaw]

No, don't get that.

[Ken Coleman]

I'm not saying you get it, but I'm saying you go to this dealer, they're asking 39.99 for that. You go in there with $2,000 in $100 bills and lay it on the hood of that Vibe, and you're driving that thing away.

[Caller]

Yeah.

[Jade Warshaw]

You shake his greasy hand, and you're out the door.

[Ken Coleman]

You don't even have to shake his hand. Just, hey, here it is. Spread it out and on. And that guy's going to go, 2000 cash for a Pontiac Vibe. Vibe.

[Jade Warshaw]

Oh, don't spread it out. You're gonna get the man jumped. Just. Just. Just. Just write a check like a normal.

[Ken Coleman]

No, you're missing. You're missing my drama. You thought that was gangster. I think that's a. I think it's a flex.

[Jade Warshaw]

It's like, you're like, unbutton your shirt, throw your chest hairs out, put a gold chain on, and just slap it on.

[Ken Coleman]

That works for $2,000. My point is, cash for these older cars, cash really goes a long way. And that's all I'm saying. Just something practical there. But that's what your play is right now. Now. And then hopefully you get a nice check from this. This case or whatever.

[Jade Warshaw]

Yeah, I hope so.

[Ken Coleman]

So, yeah, man, this is called time. That is. You know, there's an old phrase. You're a teacher, Tristan. You probably heard this. Where there's a will, there's a way. There you go. And. And this is the time. And it's very easy, by the way, because there's going to be a chorus of people singing, go get. Get a. Go get a car payment.

[Jade Warshaw]

Don't do it.

[Ken Coleman]

And there's the choir. The choir is going to be singing it.

[Jade Warshaw]

Don't do it.

[Ken Coleman]

There it is.

[Jade Warshaw]

Don't do it.

[Ken Coleman]

Nice, nice.

[Jade Warshaw]

I'm always ready for you.

[Ken Coleman]

You got to step out of the choir like Jade does. Like, she has a different color robe than everybody else. You know, she's got the mic. She gets out center stage. That. That's what you got to do here.

[Jade Warshaw]

The soloist.

[Ken Coleman]

You got to be a soloist on this, because the choir is going to get you in trouble with a car payment, you know, don't do it. And I tell you what, folks, if you want to enjoy yourself sometime and you're really bored, nothing good on tv. Pull up the old used car websites and look for cars listed under $5,000. Give you a chuckle.

[Caller]

Sam.

[Ken Coleman]

Our scripture of the day comes from Ephesians 2:10. For we are God's handiwork, created in Christ Jesus to do good works, which God prepared in advance for us to do. Our quote of the day from Ephesians 2:10 to Janis Joplin. It's always just a natural bridge.

[Jade Warshaw]

Indeed.

[Ken Coleman]

You are what you settle for.

[Jade Warshaw]

Jesus to Joplin. One with it all day.

[Ken Coleman]

Thank you, Jade. Well said, by the way. I want to be known for quotes like that.

[Caller]

Just.

[Jade Warshaw]

You are what you settle for.

[Ken Coleman]

Yeah. Six words like. Janice just dropped the mic.

[Jade Warshaw]

She did drop it.

[Ken Coleman]

She just said it, lit up a sig, walked away. No big deal. Nikki is in Missouri. Nikki, how can we help?

[Caller]

There is a senior citizen, widowed, and there is another senior citizen, much older than me, widower, who is interested in a relationship with me and with the goal of getting married because he wants to get married.

[Ken Coleman]

All right, all right, Nikki, you're putting out the vibe, huh?

[Caller]

Well, there's more behind it, though.

[Ken Coleman]

Oh, I'm.

[Caller]

Financially, yes. He does not know my financial situation, but I know his completely.

[Jade Warshaw]

Okay.

[Ken Coleman]

I like how you roll, Nikki. I like it.

[Jade Warshaw]

So. So you've got money and he doesn't.

[Caller]

Exactly.

[Ken Coleman]

So he doesn't know you could be a sugar mama.

[Caller]

He just got out of a sugar mama relationship. I'm the one that. That pointed it out and said, look, let me lay this out for you. And she's gonna take all your money. She had every bit of his money in a joint account with her name on it.

[Ken Coleman]

And did she take it? Did she take it?

[Caller]

It.

No, I.

[Ken Coleman]

But he doesn't have a whole lot anyway.

[Caller]

No. 125,000.

[Jade Warshaw]

Oh, that's it. Okay. All right.

[Ken Coleman]

So what is your. Keep going. So what's your concern? Or what's your question for us?

[Caller]

All right. My concern is he told me that that 125 is burning a hole in his pocket, and it's like, you know, his pension alone is about 100,000 a year.

[Jade Warshaw]

Okay.

[Caller]

And so, you know, he makes good money, but where is it? Is he that bad with money?

[Ken Coleman]

Well, apparently he was spending it on this last lady. Now he wants to spend it on you.

[Jade Warshaw]

Yeah, I mean, what's his.

[Ken Coleman]

So is this leading to. Should. I mean, I feel like you're leading to another question here. I don't want to ask it for you. I want you to ask it. What's your question? I'm ready.

[Caller]

I'm worried that he's going to end up needing very expensive nursing home care or something, and he's going to blow through his money instantly, and then I have to dip into mine. If we're married.

[Jade Warshaw]

How old is he?

[Caller]

He's 81.

[Ken Coleman]

How old are you?

[Caller]

68.

[Ken Coleman]

See? I don't know.

[Jade Warshaw]

Interesting.

[Ken Coleman]

I don't know. Well, first of all, we jumped ahead to all this. The way this call started is met this guy. He just got out of this other relationship.

[Jade Warshaw]

Seems very fast.

[Ken Coleman]

This all seems fast. I mean, do you even like this guy?

[Caller]

Well, we've been Facebook friends for over three years.

[Ken Coleman]

Well, that doesn't mean anything. I'm not going to marry my Facebook. First of all, I'm married. But if I was in your situation, I. I wouldn't. I wouldn't consider marrying a Facebook friend be more criteria. Oh, we've liked each other's pictures for three years. We thought maybe we would tie the knot.

[Jade Warshaw]

What else is there?

[Ken Coleman]

Nikki, no, this guy needs to court you. Can. I can.

[Caller]

I know. I. I'm not. I'm not saying that he's not going to, but he.

[Jade Warshaw]

Has he started yet, is the question. Or are we jumping ahead, but we're.

[Ken Coleman]

Talking about something we shouldn't talk about is what I'm getting at, Nate. Nikki, this guy's got to earn your love. He's got to earn the right to. To marry you. At which point you discuss all these things in this process. And if. If you guys aren't in line, if you're not aligned with your money at this late stage of life, you shouldn't do it. Yeah, because, I mean, God bless him. 81.

[Caller]

That's my question. Is it? Or because he has such a good income, Do I not worry about it so much? Am I overthinking this?

[Jade Warshaw]

I think. Think. Well, we're trying to get a bead on what the relationship actually is.

[Ken Coleman]

It ain't.

[Jade Warshaw]

Are you dating?

[Ken Coleman]

It's Facebook.

[Caller]

No, it. It isn't yet. I have been putting him off. He asked me out two years ago and I said, oh, I'm in the middle of a house repair.

[Jade Warshaw]

Okay.

[Ken Coleman]

You were washing your hair. That. She went to that one. That's great.

[Jade Warshaw]

But wait a minute, wait a minute.

[Ken Coleman]

Nikki, let me ask a question.

[Jade Warshaw]

I don't think you really like this guy. You like, it's a line in the water and you're like, well, I'm not doing anything else.

[Ken Coleman]

I think you're 68 and you're a widow and this guy's interested in you and that's kind of nice. But you don't. You haven't said anything that makes me think there's something there.

[Jade Warshaw]

No, you said he would like to get married.

[Caller]

There isn't. There. There isn't yet. Well, he asked me already to marry her. I want to, basically. Would you consider getting married? And it's like, well, I don't know. I don't even. Haven't met you yet.

[Jade Warshaw]

Do you live in the same space? To actually meet each other in person?

[Caller]

And we're going to. In a week and a half. He's coming here. He's six hours away.

[Jade Warshaw]

So you really, legitimately have never met him.

[Ken Coleman]

Hold up. How do we know this isn't catfishing? Do you even know what that means?

[Caller]

Yeah, but I, I really don't think it is. He is too open and honest.

[Ken Coleman]

You are. You have a hook in both sides of your mouth right now and this needs to stop.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You do not have any more communication with this guy until this 81 year old wrinkled dude shows up in his Bermuda shorts and is the real deal. Yeah, this is, this is a. I'm not kidding you. Yeah, neither am I. I wish Dave were here today. And I don't want to get mean like Dave, but I'm telling you, everything you're saying sounds like you are being completely punked and you are falling for it.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Your first reply to me was, oh, no, no. But he's so open and honest. And that's how they get you. You.

[Jade Warshaw]

And why would you even be talking about finances to this level with somebody that you've never even seen in person?

[Caller]

Oh, that was because of the, the scammer he was with last and he just about went.

[Jade Warshaw]

Right.

[Ken Coleman]

But even that part all not met this guy. You don't even know if he's real.

[Jade Warshaw]

Yeah. That all this all sounds like a scam.

[Ken Coleman]

Tell him to come Meet you?

[Caller]

Yes, he's going to. Well, let's wait to do that for two months.

[Ken Coleman]

Well, let's wait and see if he shows up.

[Jade Warshaw]

Yeah, let's see.

[Ken Coleman]

This guy never shows up.

[Jade Warshaw]

Because.

[Ken Coleman]

Because he gets a mysterious case of overnight gout.

[Jade Warshaw]

Yeah. Do you know anybody else that knows him?

[Caller]

Okay. We get on Facebook, widowed video chats. And so, you know, you kind of get to know the people in the group. And he was in that group for a long time.

[Ken Coleman]

Oh, yeah, he was. Because that's where I would fish if I was a scammer.

[Jade Warshaw]

But you've seen his face go where.

[Ken Coleman]

The fish are biting as a.

[Jade Warshaw]

As a zoom call is what you're saying.

[Ken Coleman]

What's his name?

[Caller]

Yeah. Charlie.

[Ken Coleman]

Yeah. It's not real.

[Caller]

It actually is.

[Jade Warshaw]

Here's the thing. You need to wait to see him now. See him in person.

[Ken Coleman]

I'm getting angry.

[Jade Warshaw]

If you see him in person, you've had zoom calls with him, seen his face. If you see him now, if he's doing the. The. The Wilson from home Improvement where you never see the. Oh, no, it's always like this. And you never see the whole face.

[Ken Coleman]

Nikki, if your daughter called us, if you had a daughter. If you have a daughter or not. Doesn't matter. But if you had a daughter or if you do have a daughter and she called us and you were listening to this call, what in the world would you say to her?

[Caller]

Oh, I know she's much younger than me.

[Ken Coleman]

It doesn't matter. You're not a desperate lost case. You. You gotta be careful.

[Caller]

I honestly think he want. He. I told him where I lived last year.

[Ken Coleman]

Gee, that's smart.

[Caller]

That.

[Ken Coleman]

That's smart.

[Caller]

I know it. I know it.

[Ken Coleman]

I do trust the guy, and I'm done. I'm not. But I'm going to tell you something, Nikki. I'm going to tell you the truth because I feel like I have to tell you the truth and then Jade can clean it up. I'm going give you my 30 seconds and then give. Nikki, this is absolute foolishness. Whether it's a scam or not, this is foolishness, and I'm being very, very.

[Caller]

Serious, and I'm going to tell you why.

[Ken Coleman]

I don't care. I'm not. Think about it. No, I don't want to. I don't want to hear it. Let me tell you why. You need to protect your heart. No, you need to protect your heart. Whether it's a scam or not. You are talking about finances and combining your life with a guy that you've never been on a date with that is significantly older than you. That based on what he's told you so far, he's reckless with money and all these other things. There's nothing stable about this entire phone call. Nothing stable? The only thing that's stable is your financial situation. But you are putting your financial and your emotional situation in massive risk. And I'm telling you the absolute truth. You need to run from this. If this guy's real, if he wants to pursue you like you were when you were 22, then we have a conversation. And I'm not that I need this, but everybody in the audience out there is shaking their head, and this is insanity that you're considering this.

[Jade Warshaw]

And so, Jade, only a desperate person would go forward with this. Only a desperate, stupid woman. And you are neither of those things, so don't do it.

[Caller]

Well, I might be a little stupid, because the only thing that makes me think, well, maybe no, would be he said his. His full pension goes to his wife when he dies.

[Jade Warshaw]

If he's been married a year, you.

[Ken Coleman]

Don'T need his pension.

[Jade Warshaw]

No, you don't.

[Ken Coleman]

Well, then why are we still having this conversation? Go. Go hang out with some fried green tomatoes and have some strong margaritas and cry yourself to sleep tonight about how lonely you are. Because that's what's going on. You're lonely. Up next, we are headed out to Chicago and Orlando for the Ramsey Show Live. Yep, you heard me right. We are taking this show to you.

[Jade Warshaw]

This is going to be everything you.

[Ken Coleman]

Love about the Ramsey Show. Excuse me. Except you get to be a part of it. Part of what, George? The Ramsey show live. Okay, that's what I'm telling them about. Ramsey show live in here. Nope. We're doing it on the road. You're going to Chicago with me and Rachel Cruz. September 30th. Are you free? The Windy City. I like it that time of year. You know what else I like, George? I like the deep dish. Okay, maybe we'll have some deep dish. You mind if I finish the promo? Is that okay with you? Okay.

[Jade Warshaw]

Okay.

[Ken Coleman]

Appreciate that. Questions and answers, real conversations, and I'm sure a few surprises here and there.

[Jade Warshaw]

George, are you in here talking about TRS life?

[Ken Coleman]

I am, Jade. I'm trying to talk about it.

[Jade Warshaw]

Nice. So that means it's actually happening, right?

[Ken Coleman]

It's happening. If I could tell the people, I think it could actually come to fruition.

[Jade Warshaw]

Listen, just tell me when and where.

[Ken Coleman]

You don't know. Okay. We're going to Orlando. You're gonna join Dr. John Deloney and I. October 2nd.

[Jade Warshaw]

Yes. Okay, great. I'm gonna go pack now. Thanks.

[Ken Coleman]

Please, please do that. Go, Go pack.

[Sponsor/Announcer]

Hey, George, speaking of packing, is this like sweater weather or is it not that cold yet in Chicago?

[Ken Coleman]

What is happening? Can I. Can I please just get to how they buy the tickets?

[Jade Warshaw]

Geez, I thought it was a good question.

[Ken Coleman]

Okay, this is not an arena tour. This is a one night only event in Chicago and Orlando. General admission is only 39 bucks. Plus there's a VIP experience if you're bougie like that. But here's the thing. There's only 300 seats available, so get your tickets now at ramseysolutions.com events. Hey, how come you get to go to both cities? I. I just go where they tell me, man. Hey, have you been there the entire time?

[Jade Warshaw]

Maybe. Okay.

[Ken Coleman]

And also, are you reading a children's book? I'm expanding my mind, George. That's how we got those PhDs. Yeah, it's probably where you got that jacket. Okay, see? See you on the road, John.