Your Bank Balance Is a Reflection of Your Habits

Summary

Podcast Summary: The Ramsey Show – "Your Bank Balance Is a Reflection of Your Habits"

Release Date: May 7, 2025
Host: Ramsey Network (Ken Coleman and Jade Warshaw)

In this enlightening episode of The Ramsey Show, hosts Ken Coleman and Jade Warshaw delve deep into the core principles of financial management, emphasizing how personal habits directly influence one's bank balance. Through a series of caller interactions, the hosts address diverse financial dilemmas, offering actionable advice rooted in Dave Ramsey’s renowned financial strategies. The episode is segmented into several key discussions, each highlighting different aspects of money management, debt reduction, and wealth building.

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1. Managing Vehicle Debt vs. Savings

Caller: George from Riverside, California
Timestamp: [00:54] – [04:30]

George is grappling with whether to pay off his $35,000 vehicle loan in full or continue with monthly payments. With $32,000 in savings, he seeks guidance on the best financial move.

Key Points:

• Debt as Risk: Jade Warshaw emphasizes viewing debt as synonymous with risk. She explains that continuing payments exposes George to potential financial strain in unforeseen circumstances (e.g., job loss or emergencies).

  Jade Warshaw [02:12]: "Whenever I'm looking at debt, I am viewing debt synonymously with risk."

• Recommendation: Pay off the vehicle loan entirely while retaining a starter emergency fund of $1,000. This approach eliminates the $600 monthly payment and reduces financial risk.

  Jade Warshaw [03:48]: "I'd pay this debt off, keep $1,000 to the side, and pay off the remaining $31,000."

• Psychological Relief: Ken Coleman highlights the mental ease of being debt-free, reinforcing the benefits of eliminating monthly obligations.

  Ken Coleman [04:30]: "Without that $600 payment, you can save up your emergency fund again very quickly."

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2. Risk-Averse Investing Pre-Retirement

Caller: George from Portland, Maine
Timestamp: [05:30] – [08:57]

At 64, George plans to retire at 67. He has $300,000 in his 401(k) and $120,000 in savings but remains risk-averse, resulting in stagnant returns.

Key Points:

• Investment Diversification: Jade advises moving from stable, low-yield bond funds to a diversified portfolio, including growth and international mutual funds, to enhance returns without taking excessive risks.

  Jade Warshaw [08:03]: "There's no reason to be risk averse... diversify your investments."

• Action Steps: Utilize tools like SmartVestor Pro to reallocate investments appropriately, ensuring alignment with growth objectives.

  Jade Warshaw [08:07]: "Get a SmartVestor Pro and make that move today."

• Mindset Shift: Ken emphasizes overcoming the fear of investing, encouraging George to embrace a balanced approach to grow his retirement funds effectively.

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3. Navigating Debt Relief Programs

Caller: James from Nashville, Tennessee
Timestamp: [10:34] – [19:43]

James shares his experience with National Debt Relief, expressing dissatisfaction with their services, which he claims have not effectively reduced his debt burden.

Key Points:

• Due Diligence: Jade recommends evaluating the effectiveness of debt relief programs and considering termination if they fail to deliver promised results.

  Jade Warshaw [11:33]: "I would get out of something like that because you don't need them to pay your bill."

• Alternative Solutions: Ken and Jade suggest directly negotiating with creditors to manage debt independently, avoiding additional fees charged by third-party companies.

• Encouragement: Despite setbacks, both hosts reassure James that his efforts are valid and encourage him to persist in his debt elimination journey.

  Ken Coleman [18:01]: "You're okay. Your instincts are right. You've got the know how and the want to. Unstoppable."

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4. Choosing Credit Unions Over Big Banks

Guest: Dave Ramsey
Timestamp: [20:24] – [22:23]

Dave Ramsey discusses the advantages of credit unions, particularly Fairwinds Credit Union, over traditional big banks.

Key Points:

• Nonprofit Structure: Credit unions are owned by their members, allowing profits to be reinvested into better interest rates and lower fees for customers.

  Dave Ramsey [20:34]: "Credit unions are nonprofit, which means that the members, the customers own the credit union."

• Customer-Centric Approach: Emphasizes the personalized and supportive service members receive, contrasting it with the often impersonal nature of large banks.

  Dave Ramsey [21:03]: "Fairwinds has the right kind of people with the right kind of values."

• Promotion of Fairwinds: Hosts endorse Fairwinds Credit Union, highlighting their excellent customer service and competitive financial products tailored for Ramsey Show listeners.

  Rachel Cruz [21:12]: "Fairwinds has what you need at prices that won't bust your budgets."

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5. Increasing Income While Working for a Parent

Caller: George from Dallas, Texas
Timestamp: [24:55] – [32:10]

At 20 years old, George works for his father in a glass company, earning $12 per hour. He desires a raise to $14 but is unsure how to approach the topic without jeopardizing his job.

Key Points:

• Goal Setting: Ken emphasizes the importance of defining specific financial goals before seeking a raise.

  Ken Coleman [25:20]: "The person who aims for nothing hits it every time."

• Communicating Effectively: Advises George to have a structured conversation with his father about his aspirations and explore opportunities for advancement or additional income streams.

  Ken Coleman [25:36]: "Sit down with dad and ask if there's an opportunity for a raise."

• Exploring Alternatives: Jade suggests considering side hustles or additional jobs to increase income without leaving the job he enjoys.

  Jade Warshaw [28:39]: "We haven't heard the big why yet... what's the reason behind wanting more money?"

• Psychological Empowerment: Both hosts encourage George to take proactive steps, reinforcing the attainable nature of his financial goals.

  Ken Coleman [31:08]: "You've got the know how now and you've got the want to. Unstoppable."

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6. Handling Bragging Relatives About Money

Caller: Tracy from Pittsburgh, Pennsylvania
Timestamp: [45:34] – [63:03]

Tracy struggles with a first cousin who frequently boasts about her financial achievements, such as purchasing an expensive BMW and high-end clothing, making Tracy uncomfortable.

Key Points:

• Setting Boundaries: Ken advises changing the subject whenever the relative brings up financial boasts to minimize irritation and maintain control over conversations.

  Ken Coleman [52:48]: "Put up a boundary that every time she does that, change the subject."

• Understanding Motivations: Jade explores the possibility that the cousin's behavior stems from insecurity or a desire to celebrate her successes without intending harm.

  Jade Warshaw [53:08]: "Maybe she's insecure and looking to celebrate her own success."

• Selective Sharing: Encourages Tracy to limit financial discussions to a trusted circle, ensuring supportive and non-competitive interactions around money matters.

  Ken Coleman [59:12]: "Find a local Ramsey trusted real estate pro for free."

• Emotional Management: Both hosts emphasize maintaining emotional well-being by not internalizing others' financial displays and focusing on personal financial goals.

  Ken Coleman [63:03]: "The minute you put a number out there, it's a comparison deal."

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7. Balancing Student Loan Repayment with Home Buying

Caller: Hayden from Delaware
Timestamp: [67:42] – [73:49]

Hayden and her fiancé face a dilemma: should they use their savings to pay off her $200,000 student loan or save for a down payment on a house in the next 12 months.

Key Points:

• Prioritizing Debt Elimination: Jade strongly recommends paying off the student loans first to eliminate the burden and free up income for future investments like homeownership.

  Jade Warshaw [68:26]: "Start off any new marriage by clearing out this debt in its entirety."

• Long-Term Benefits: Emphasizes that eliminating debt creates a solid financial foundation, facilitating more efficient saving and investing for significant milestones, such as buying a house.

  Jade Warshaw [68:06]: "Pay them off in full, so you can save up for a down payment next."

• Avoiding Financial Strain: By removing the student loan debt, Hayden and her fiancé can allocate funds more effectively towards their home purchase without financial stress.

  Ken Coleman [73:49]: "Trust the process here, and you're going to be okay."

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8. Managing Significant Debt from Multiple Sources

Caller: Alan from Denver, Colorado
Timestamp: [77:53] – [86:22]

Alan and his wife are burdened with approximately $1 million in debt, primarily from mortgages on two homes, alongside student loans and a vehicle loan. They seek advice on whether to sell one of their houses to alleviate financial stress.

Key Points:

• Asset Liquidation Strategy: Jade advises selling the second home to eliminate the car loan, student loans, and reduce overall debt, thereby freeing up monthly income and decreasing financial pressure.

  Jade Warshaw [78:54]: "Pay off all the debts and throw the rest onto your current house."

• Cash Flow Analysis: Ken challenges the notion that the rented property is cash-flow positive, suggesting that the actual return is minimal and does not justify maintaining the asset.

  Ken Coleman [84:16]: "Selling the house removes the risk and gives you more money each month."

• Refinancing Consideration: Recommends consulting with a mortgage professional to explore refinancing options, potentially lowering monthly mortgage payments and streamlining debt management.

  Ken Coleman [83:33]: "Look into a refi or recast to manage your mortgage more effectively."

• Future Financial Planning: Emphasizes the importance of building an emergency fund and redirecting the freed-up funds towards investments and debt repayment to achieve financial stability.

  Jade Warshaw [85:00]: "Pause on investments until debts are cleared, then prioritize building savings and investments."

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Insights and Conclusions

Throughout the episode, The Ramsey Show reinforces the foundational financial principles of:

• Debt Elimination: Prioritizing high-interest debts and liabilities to minimize financial risks and free up income for savings and investments.

• Emergency Funds: Maintaining a starter emergency fund to provide financial stability during unforeseen events.

• Investing Wisely: Encouraging diversified investment portfolios to enhance retirement savings and overall wealth without compromising financial security.

• Strategic Communication: Advising on setting financial boundaries within personal relationships to maintain emotional well-being and focus on individual financial goals.

• Holistic Financial Planning: Balancing debt repayment with saving for future milestones, ensuring a structured approach to achieving long-term financial success.

Notable Quotes:

• Jade Warshaw [02:12]: "Whenever I'm looking at debt, I am viewing debt synonymously with risk."

• Ken Coleman [31:08]: "You've got the know how now and you've got the want to. Unstoppable."

• Ken Coleman [73:49]: "Trust the process here, and you're going to be okay."

• Jade Warshaw [85:00]: "Pause on investments until debts are cleared, then prioritize building savings and investments."

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This episode serves as a comprehensive guide for listeners navigating various financial challenges, emphasizing the importance of disciplined habits, informed decision-making, and proactive management of personal finances. Whether grappling with debt, contemplating investment strategies, or managing financial dynamics within personal relationships, The Ramsey Show offers valuable insights to steer individuals towards financial empowerment and stability.

Transcript

[Dave Ramsey]

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 money, their profession, and their relationships. The phone number to jump in today is 888-2552-258882-55225, alongside the incomparable the fabul, Jade Warshaw. I'm Ken Coleman and we're here for you. Jade's going to help you today on how to save that money, budget that money, and I'm going to help you on how to make more of the money. And we weigh in. We always have a good time. You never know what we're going to agree on or disagree on. It's quite exciting.

[Jade Warshaw]

I love it.

[Ken Coleman]

It's a bit of potpourri, I like to say.

[Jade Warshaw]

Okay.

[Ken Coleman]

You never know.

[Jade Warshaw]

Just a wonderful little bowl of melange.

[Ken Coleman]

Yeah, that's right. We're going to start it off with George in Riverside, California today. George, how can we help you today?

[George]

Hello. So I've been talking to my wife about whether we should pay off our vehicle or just save our money in the bank. We have about $32,000 in our savings account, and then we have a 30. We still owe about 35,000 into our CRV. We bought the vehicle because we wanted a bigger car because of our, you know, growing family, and the car that we had previously was just too small. So that's where I'm currently at. I don't know whether I should just pay it off in full or should I just keep on making my. My payment each and every month?

[Ken Coleman]

Is that your only debt?

[George]

That's my. Aside from my mortgage.

[Jade Warshaw]

Okay. Yeah. You know, let me see if I can frame this in a different way. I mean, we're always going to tell you to pay off the debt, right? That's. That's kind of what we're known for around here. Maybe the why behind the what will kind of help you get your head around it. Is. Is that what it is? Like, why would I do this?

[George]

Yes.

[Jade Warshaw]

So for me, whenever I'm looking at debt, I am viewing debt synonymously with risk. Right. There's always this risk. As long as I have payments, as long as I have debt, there's always a risk hanging over my head and hanging over my shoulders. So in this case, it's $35,000 that you're sitting on. And if something were to happen tomorrow, let's say tomorrow, the worst happened. You lost your job or you got laid off or you fell off the curb broke your leg and you couldn't go to work. Right. Suddenly you would feel the weight and the risk of this crv. Is that correct?

[George]

Correct.

[Jade Warshaw]

Yeah. Because what's the payment every single month?

[George]

It's $600.

[Jade Warshaw]

$600. And not only would you feel the risk in the weight of that $600, but then your brain would start doing real math and you'd go, hang on a second, I don't actually have $32,000 saved. I'm actually in the whole $3,000, right?

[George]

Correct.

[Jade Warshaw]

So that's kind of, it's easy on this side when everything is good and, you know, coming up roses to think of it and not. But when you play it out on both sides, which is wise thinking, then you suddenly realize, oh man. Like this is, this is actually more of an imposition than I thought it was. So for that reason I would reach over and I would pay this debt off. I'd keep $1,000 to the side like we always do, just so you've got that starter emergency fund. I'd pay off the rest of it, the, the remaining 31,000 onto the CRV and then cash flow and pay off the rest. And then without that $600 payment, can how quickly could he save up that 3 to 6 months nest egg again?

[Ken Coleman]

Again, very quickly. And what the difference is is now you're on the other side of the debt. And I think it's a nerve wracking thing, Jade, when we hear from people that say I've got all this money in savings and do I empty it? And again, that's the wrong mindset. It's not that I'm emptying my savings, it's that I'm paying off a car that I've been in massive debt for. And now all of a sudden you can build up and you'd be surprised how you can make your way through what we call the emerg, you can maneuver your way through until you build up that emergency fund. So I agree with Jade. You're asking what would we do? What should you do? And yeah, I think you knock the car payment out and just think about how life changes when you don't have.

[Jade Warshaw]

That car payment, not to mention the interest you're saving on the interest rate by paying off the good.

[Ken Coleman]

That's another good thing for the mindset there because I'm going to tell you something, the psychology is real, George. When you think about emptying the savings account, that's real.

[Jade Warshaw]

Yeah.

[Ken Coleman]

You know, to this day, I've said this before. Jade, I've got a large emergency fund. I try to never use it.

[Jade Warshaw]

Oh, because you feel it like you feel it, even if you have to know it. Yes.

[Ken Coleman]

And it's there for that reason.

[Jade Warshaw]

Yes. And we. Yeah.

[Ken Coleman]

And my first reaction is, all right, Stacy, this happened, so let's figure out what we're moving around.

[Jade Warshaw]

Exactly, exactly. And I think that can serve as a big motivator here, once you've paid off the debt, to hurry up and stack it back up. Because the truth is, it does give us peace to have money in savings. But let's make sure it really is our money that's in savings and it's not until the debt is gone.

[Ken Coleman]

That's right. Great, great point there. Let's go to George. From one George to another George. Portland, Maine is where he is. George, how can we help?

[George]

How you doing? I have, I'm 64 years old. I'm going to be retiring at 67. And I have 300,000 and a 401K and I'm putting 15% week into that. About 120. Yes.

[Jade Warshaw]

Okay.

[George]

I have about 120,000 in the bank. My, my question is I have, I have no debt. I'm debt free. Other than my mortgage. I own two homes. One of them is paid off. My question is, is I've stayed out of the market. I've been adverse to the risk and I've completely missed this whole time with the markets going up and setting record, second records. But now I'm to the point where even in my 401k, I'm not really making any money on the money.

[Jade Warshaw]

Why?

[George]

And you know, well, it's in, it's in some kind of stable fund, my work, like bonds.

[Ken Coleman]

Really?

[Jade Warshaw]

Not making, like bond funds, I guess.

[George]

Yeah.

[Jade Warshaw]

Oh, I think so.

[George]

But yeah, it's not really making any money. I'm not losing any money, but I'm not making any money.

[Jade Warshaw]

Oh, gosh, that's unfortunate.

[George]

Yes.

[Jade Warshaw]

When did you realize that? Because I was wondering about that because you said, oh, I've missed out on this, you know, this historic time or whatever. I'm like, how did you miss out? You've got 300,000 sitting in a 401k. So when did you realize that the return on it is poor?

[George]

Well, I guess I pulled it. I pulled it out of the market, I don't know, five or six years ago.

[Jade Warshaw]

Oh, you pulled it out?

[George]

I never got, I pulled, yeah, I pulled the money out because I got nervous and I never put it back in.

[Jade Warshaw]

So where is it?

[George]

Now it's, it's in my employer's 401k program.

[Jade Warshaw]

I understand, but it's got to be invested in something. It doesn't just sit there.

[George]

Oh, it's in, it's in a stable value fund, but it's not earning.

[Jade Warshaw]

Got you, got you. Okay, okay, okay, okay. All right, so what. Let me, let's, let's run this back. So we've got the four, the 300,000 sitting there. It's not. The return is terrible. You've got 120k sitting in savings. That's liquid.

[George]

Right.

[Jade Warshaw]

And then you've got these two houses. So I have something that I want to say about the 401k, but what's your question today?

[George]

What? What? You know, knowing that I'm adverse to the risk personally, what should I put this money into in the 401k and my savings? What can I put it into that's going to earn me some money? It doesn't have to be a lot, but some money.

[Ken Coleman]

We've got about 40 seconds here, so yeah, drop that advice on it.

[Jade Warshaw]

There's no reason to be risk averse. What we talk about here, which is four types of mutual funds. Growth, growth and income. Aggressive growth and international. That's about your most middle. I mean that is about the most conservative thing that I could tell you to put your money in. You're equally spread. Your risk is spread out. And that's the way I invest my money. That's the way Ken invests his money. It's the way Dave Ramsey invests his money. So we're not telling you to do anything that we wouldn't do. I would do that. I would get a smartvestor pro. We'll put the information there in the show notes and I would make that move today. You have missed out, my friend, on a lot of growth and I hate that for you. But today is a new day to get started and get into it.

[Ken Coleman]

Foreign.

[Jade Warshaw]

Hey, guys, what's up? It's Jade Warshaw. And look, if there's anybody who knows about student loan debt, it's me. My husband and I had $280,000 of it, but we were able to dig ourselves out. And you can, too. If your student loan payment and interest rate are burying you, refinancing could be the solution. Now, I recommend contacting my friends at Laurel Road today through their online application. You can get an initial rate quote unless than five minutes. And if you have a more complex situation, you can schedule 30 minutes to talk to an actual human being. Thank goodness Laurel Road makes it simple. There are no fees involved and you could save thousands over the life of your loan. Remember, you should only refinance if it makes sense in your situation. So if you're looking for a low rate or a shorter term so that you can pay off these student loans for fast, talk to my friends at Laurel Road about their competitive interest rates and how you could actually get a lower rate by signing up for autopay. Listen, nobody's coming to save you from your student loan debt. If you want it gone, you can't mess around. Go to LaurelRoad.com Ramsey to find out more about student loan refinancing. Again, that's LaurelRoad.com Ramsey.

[Ken Coleman]

All right, let's go to James right here in our neck of the woods, Nashville area. James, how can we help today?

[James]

Hi, how you doing?

[Ken Coleman]

Good.

[James]

I just wanted to ask a question.

[Ken Coleman]

About two years ago, my wife and.

[James]

I decided we had had enough of the debt and what you'd call, I guess, the chase of TR to keep up with credit and all that. So we decided, started paying everything off. We have our house, of course, that's still. We're still paying on that. But we had a car on a loan and we had credit card debt. The car and the loan together was somewhere around 45,000, something like that. We've got the car down to 5,000 now. The credit cards was about 25 to 28,000. This is before we heard Dave Ramsey. And we went with a company called National Debt Relief. And we're trying to get out of that because they pretty much lied to us. They said that it's going to charge us so much for what the settlements were. And then we find out it's so much on the original cost. So by the time it's said and done, we're paying the same amount we had before.

[Jade Warshaw]

Maybe.

[Ken Coleman]

Can I get out of that can?

[Jade Warshaw]

That's the question. Have you kind of done some due diligence to find out what it would take to get out? I mean, how much have you paid into it so far?

[James]

We've been paying for two years now. What we have agreed, we started with that 27. And we agreed as we've got everything settled, but that not counting what we're paying the payments on.

[Jade Warshaw]

Yeah, yeah, but.

[James]

But what's not settled is about 8,000. But if you go with the payments and everything, we're still at about 15,000. Yes, I just cut them off because I paid a couple off, but I still have the rest to go so, and it's costing us 400 and $460 a month for that.

[Jade Warshaw]

And how much of that is actually going to it do you know?

[James]

Supposed to be 75% and they get 25%.

[Jade Warshaw]

Listen, I mean, I would get out of something like that because you don't need them to pay your bill. Like, you could have done all that yourself. You could have made a deal. You could have consult, you know, do you know what I'm saying?

[James]

I've learned, I've learned since I've been listening to the show this past year.

[Jade Warshaw]

So when you call them up, when you call them up and say, hey, I don't want to do this deal anymore, I want to get out, what do they say?

[James]

They tell me, says, well, that'll be your choice. But the money you've already paid in, that'll be up to the creditors. If they get. They actually apply that to your debt or not. And if not, then I was like, well, where's the money go? Well, they get to keep it. And I was like, huh? They can't just keep the money if I've already paid so much. One in particular, which I paid on them for 18 months now.

[Jade Warshaw]

What, how much, how much of it is in question? So let's say in total, did you say you paid 15,000 and in total?

[James]

In total, I'd say I paid about half that actually went to the creditors. Paid off two cards completely. One was 3500, one was 2200. And we still have a couple cards not even been made a deal on yet that's not even been touched yet.

[Jade Warshaw]

Then, yeah, then I, I 100 would get out. You might feel a loss on this, but over time it's going to be a greater loss if you don't get out now. So if you've paid 13, if you've paid 13,000 on this, which you said is about half, and you said about right. Uhhuh. And out of that, what, basically what I'm asking, I want to make this clear. So of the 13,000 you've paid, you're saying that some of it obviously has gone to them in fees, but even out of that, none of it's actually gone towards the debt. Is that what you're saying, you're still paying into a pool?

[James]

Well, I'm paying into a pool. I paid off two cars, those are done. And then I have two more they haven't even touched, and I have one that they're two that they're making payments on. One of them's a small one, but one was a big one. It was like 12, 13,000. And supposedly I've paid half of that off. And the reason I want to get out. One reason is I found out that I could have done this differently. But I also don't want to end up in court. What happens if they sue you? Because we had one that tried, but we got them paid off.

[Jade Warshaw]

You're not. They're not going to sue. The creditors aren't going to sue. Sue you. Essentially what they did is they. Your loans went into default, you didn't pay them, and they've taken the money and pooled it. And then they've offered those folks a deal and said, hey, now that this is very far into. Into for default and very far delinquent. Let's make a deal. Which is basically what you would have done. And now they have full control over your money to say, hey, you know, if you want to get out of this. And that's why they're giving you the runaround. And that's what you've learned, is that you could have done this yourself. Oh. Only you might have been able to do it without, like, totally wrecking credit. That's the thing with these places is.

[James]

Yeah.

[George]

Because we.

[James]

We didn't miss one payment until they told us to miss payment.

[Jade Warshaw]

Exactly. And they just took and pulled that money and then they offered a deal. And so now that's why you're feeling like, hey, if I get out of this now, can they sue me? They could. They probably won't. Because you have control of this now. Once you get out of this debt relief thing, you'll have control of this. You'll be able to pay them off. You'll be able to call those same creditors and say, hey, here's what I did. That's not what I wanted to do. Let's just make a deal and pay this off. And you'll be able to do that. So they're gonna. The debt relief company is gonna try to make it scary for you to get out of this deal. Go back and look at your contract and see what it's really going to take and just get out of it. And you're gonna lose. You're gonna lose some skin in the game. Yeah, you're gonna lose a little something in this.

[James]

But I think I want to gain more in the wrong run, aren't I?

[Jade Warshaw]

100?

[Ken Coleman]

Absolutely 100. Yeah.

[James]

What about the money I've already paid to the one. Because I paid 18. I mean, 18, which is about half.

[Jade Warshaw]

It's still paid the cred received it. The balance has still gone down. So that's. That's been paid. Your balance is not going to suddenly shoot up because there are two separate companies. You've got the debt consolidation entity that's holding a small pool of your money. Then you've got the actual creditor who is accepting the money. And once that's been accepted, that's the balance. Is the balance, if that makes sense.

[James]

Yeah. See, we kind of done this wrong. We started on like step two, baby step two. But we do have baby step one done, and we're in the middle of baby step two. My car will be paid off this year, and that's the only car payment have good. And it's worth a lot more than I owe. Oh, I'm think I was thinking about selling it, but my wife's gonna throw fit.

[Jade Warshaw]

Well, tell me more. Tell me more.

[James]

It's. It's a.

[Ken Coleman]

Well, the car.

[Jade Warshaw]

Okay.

[James]

Are told that we own about 150 house. The car is worth about 28 to 3005 on it. Oh, it's a limited edition, but it's very rare. That's the big thing about it.

[Jade Warshaw]

What is it?

[James]

It's a 2012 yellow jacket. It's a Challenger SRT8. But they only made 1300 of them.

[Jade Warshaw]

Is that like the transformer? Is that like bumble, do you know?

[James]

No, no, there's a lot more of those. Oh, they only made this one one year, and they only made 1300 of them.

[Ken Coleman]

And you said your wife. You said your wife would throw a fit. So that's her car.

[James]

She got it. No, it's my car. She got it for me because she says I work too much.

[Jade Warshaw]

So it's a gift.

[Ken Coleman]

I don't think you have to sell that, though.

[Jade Warshaw]

I don't think you have to sell it.

[Ken Coleman]

Not in this situation. You owe so little on it, you're gonna knock it out.

[Jade Warshaw]

Yeah. What else is there?

[James]

Just the credit cards. The car in my house. That's it. We make together about 85.90 a year. And I work. When I'm off work, I'm working. I'm trying to make every dollar I can because I would love to have this house pay. We've only had the house five years. I lost the other house. Didn't lose it for default. Lost it for another reason. Believe it or not, the state of Tennessee took it from me.

[Jade Warshaw]

Oh, I'm sorry. Listen, here's the thing, James. You're doing good. All right? You. You have looked at your situation and said we need to make a change. You've started down that road. You made a small mistake with this debt consolidation, but I mean, Ken, who among us hasn't made. Yeah, Plenty of money mistakes?

[Ken Coleman]

It's not a mistake that's going to set you back. I hope you've heard what Jade's told you. You're okay. Your instincts are right. You now know what to do. You've got all the intensity. My goodness, man, I need to take a breath just listening to you talk. You're so intense, which is great because, James, I love the intensity. I'm saying. I'm pointing it out to say you've got all of the things that you need. You have the know how now and you've got the want to and the know how and the want to when they come together unstoppable. So we're cheering you on. You got this. And before you know it, you guys are going to be out of debt and. And now the future is so very bright. So no more beating yourself up. Let's just keep moving forward.

[James]

My wife does say I worry too much, but I can't help it.

[Jade Warshaw]

Well, she's taking good care of you.

[Ken Coleman]

That's all right. You will be surprised how much worry will go away when you're. When you're done with this process.

[James]

I've been debt free once before, years ago, and it was the best time of my life.

[Ken Coleman]

There you go.

[James]

Because I didn't worry about nothing. My wife has never been debt free. So I keep pushing and pushing through, pushing nicely. But I said, we got to get there. And she doesn't understand the feeling. She's going to get well.

[Ken Coleman]

That's all right. You're leading the way. And she's supportive. She's not fighting against you, Correct?

[James]

No, she.

[Ken Coleman]

So you got a good woman, you got a great car, you got a good plan here that's gonna work, and you've got great momentum. So I'm not telling you to take the foot off the gas, but I do want you to give yourself a bit of a break. And know now it's about intentionality. There's no panic. There's no reason to be scared. Just stay the course and you'll get there, James. I absolutely promise you. You can hear it in his voice.

[Jade Warshaw]

You can.

[Ken Coleman]

Ain't no stopping James.

[Jade Warshaw]

No, I'm proud of him. James is doing all right.

[Ken Coleman]

Yeah, he absolutely is. So fun. You gotta it, James.

[Rachel Cruz]

All right, Dave, you have some strong opinions, possibly? Yeah, I think so. Okay. Because you really prefer credit unions over big Banks.

[Dave Ramsey]

Well, credit unions, for one thing, are nonprofit, which means that the members, the customers own the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner, changes the spirit on the credit union. So I find very few credit unions that aren't very customer centric.

[Rachel Cruz]

Well, and I think we have found one that is incredible and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.

[Dave Ramsey]

They're the right kind of people with the right kind of values, and they've done a really, really good job with customer and the deals that they're offering. The Ramsey Tribe is incredible.

[Rachel Cruz]

Yeah, absolutely. And I love that the things that we teach, they so line up with. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account. And I'm not kidding, it took less than five minutes. It was so user friendly. Like, the step by step approach was unbelievable. And then the next day, my phone rings and it says fair wins on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience. And I, I so, so appreciate that. Plus, anything that you can do at a traditional branch, you can do with [e-mail] or on their app. And you'll have free access to over 33,000 ATMs.

[Dave Ramsey]

Hey, you guys know how much I hate banks in general. And so for me to do this is a big deal. Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey Tribe. You guys, it's incredible.

[Rachel Cruz]

Yeah, you. It's so easy to join Fairwinds no matter where you live. So go to Fairwinds.org Ramsey.

[Ken Coleman]

Fairwinds is federally insured by NCUA. All right, it's that time of year. Do you have a graduate in your life, A college grad or a high school grad or a. This is such a time of anxiety for those young people because they've been conditioned to do everything they can to get that college offer, to then go get the major, to then go get the good job. And there's so much cultural pressure to try to figure out at such a young age, what should I do with my life? And we're talking about professionally here. And that's why we created the new version of my get clear career assessment. This is find the work you're wired to do. Student edition, comes out today. It's actually out and flying out of the bookstore, I'm told. So, very, very proud of this project. What does it do? In short, it helps answer that question for you. The parent, the grandparent, the guardian, the family friend. For that young person who's trying to figure out what do I do with my professional life. In other words, what am I wired to do? And the answer is pretty clear. To use what you do best. That's your talent to do work you love. That's a sense of passion to produce results you care deeply about. That's a sense of mission. And the assessment measures all three of those distinct wires in these young people. And this is written for young people. The book itself is about a 45 minute guiding lesson on what to do with your assessment results. And you get a absolutely stellar assessment result with a purpose statement in it. And it'll help you. That parent, grandparent, friend, guardian, whatever, coach, teacher, give guidance and confirmation to that young person. So find the work you're wired to do. Student edition comes with the get clear care assessment all together for only 34.99. It's a great grad gift, if I do say so myself. Been sending them out, by the way, all these invites coming around and I'm like, all right, we'll throw some cash at these kids, but also let's give them something they can use.

[Jade Warshaw]

Listen, I'm gonna get that for my babysitter.

[Ken Coleman]

Well, I appreciate that very much. I'll sign that, but there it is. You can get it at ramseysolutions.com storeramseysolutions.com store or the link in the show notes. If you're on YouTube or podcast, find the work you're wired to do. Student Edition. Derek up next in Dallas, Texas. Derek, how can we help today?

[George]

Oh, yes.

[James]

How y'all doing?

[Ken Coleman]

Good. How are you?

[George]

My question is, but right now, I'm 20 years old and I work for my dad. I'm working for a glass company. I make 12 an hour.

[James]

And at the moment I have almost.

[George]

$7,000 in my, in my personal checking account. My question is, is I want to know what I can do to expand that amount besides just saving up working an 8 to 5.

[Ken Coleman]

So the first thing that comes to mind is I'm going to get either a better job or an additional job. First thing that comes to my mind. I'm assuming you've processed that, right?

[George]

Yes, I've thought about that before. It's just, I don't. I actually really like the work that I'm doing with my dad.

[Ken Coleman]

Okay.

[George]

I like doing this hands on work, so I don't really plan on quitting this job.

[Ken Coleman]

What are you making per hour?

[George]

I make 12.

[James]

$12 an hour.

[Ken Coleman]

Okay, so you can do this one of two ways. Tell Jade and I, how much more per hour do you want to make? Or how much additional money do you want to make per month? Okay, tell me that number. You know what you make right now, Right? So. So based on what you bring home now and again, I don't care how you answer it, but I want you to tell us. Give us a target. What are you looking to make?

[George]

I'd like. I would like to be making 14 an hour.

[Ken Coleman]

Okay, but have you talked to Pops? No, I didn't say we have to complain, but we're working through this here. So have you talked to Pops about this desire to make two more bucks an hour?

[James]

No, I haven't.

[George]

And the reason why is because I've been working here for a year. When I first got on, I was getting paid $10 an hour under the table, so I wasn't getting anything taken out of my. My check or anything.

[Ken Coleman]

Right. Well, one thing we want to do going forward is not tell millions of people that your dad's been paying you under the table. We want to kind of hold back that information. Now he's paying you. He's withholding taxes, I hope.

[Jade Warshaw]

Listen, if you hear. If you hear a knock at the door, don't answer it.

[Ken Coleman]

I'm just kidding. The IRS is already tracking you, young man. There's nothing I can do about it. The horse is out of the barn. So first things first, you can talk to your dad. It's a unique deal, but I'm gonna give you the same advice I'd give any young person. Because of a very large audience listening and watching here, we don't go and ask for a raise. It's a horrible idea. I don't care if it's your dad or anybody else. It puts that leader on the defensive. So what you want to do is sit down with dad and go, dad, I want to make more money per hour. I want to make more money per month, per year. Is there an opportunity for me to do that with you? And what does that look like? That's the conversation you have with dad. Outside of that, because you don't want to quit the job with your dad. And you like the work. And the reason I was pushing you to go how much more money do you want to make per month? And you couldn't give me a number. So that's your homework assignment. I want you to know tomorrow morning when you wake up what your financial goal is as it relates to making more money. Right now you need to know that there's an old phrase, it's not attributed to anybody, Jade. It says the person who aims for nothing hits it every time. And there's some great truth to that. So if the numbers. I want to make an additional two grand a month, Ken, $24,000 a year, fine. But we got to have a number. And then when we have a number, we can now say, how is it that I go about making that money? Well, I know that I may not have the opportunity to make much money in my dad's company. So that means I got to start my own side hustle business or I got to go work some overtime, or I got to leave my dad's company altogether where I'm making 18 an hour. Jay, don't want to bring you in here because you're one of the most goal orient oriented people I know. You've heard this young man right here. What, what say you?

[Jade Warshaw]

Well, I say that we haven't heard the, the big why yet.

[Ken Coleman]

Oh, that's fair.

[Jade Warshaw]

And I think that's probably what's going to inform this conversation the most and probably what's going to light your fire, to actually go and pursue what Ken is telling you to do. You know, if, if you don't have a reason. It's like what you said, the person that aims for nothing. So what's the reason? Are you trying to move out of the house? Are you trying to buy a car? Are you trying to get, you know, what? Is that why? That you want your income up to go up, therefore your savings to go up. And I think that's going to give you that, that fire put you on the spot.

[Ken Coleman]

I think she makes a great point. So, okay, what's the why?

[George]

It's rather a more selfish answer is because I don't really have to pay for a lot of things right now. Right now I'm living with my parents and the only things I have to pay for is just insurance on the car, which is not a lot a month and then a phone bill.

[Ken Coleman]

So what do you want the money for?

[George]

Reason as to why. Why I want more money.

[Ken Coleman]

What is it I like with what I have right now?

[George]

I've never seen these numbers Before.

[Jade Warshaw]

Yeah.

[George]

And I just want to have more of it. It's really just a greedy reason.

[Jade Warshaw]

That's not greedy. It's not greedy. You. It's. You feel that because to your point, it's the first time you're. What did. How old are you?

[George]

I'm 20.

[Jade Warshaw]

You're 20 years old. This is your first bout with, you know, being a career man. And you're like, hey, this is kind of nice. It's nice to earn money, and it's nice to see that I have savings, and it's nice to kind of know that I. It's like, yeah, you hike your pants up, you're like, all right, like this.

[Ken Coleman]

And there's a little extra jingle in there.

[Jade Warshaw]

Yeah, exactly.

[Ken Coleman]

What if we suggest a couple whys, Derek? Okay, so, okay, my co host here has no idea where we're going. We're going to spontaneously go one back and forth. We're going to give him some whys.

[Jade Warshaw]

Yes, because I want to give.

[Ken Coleman]

So one is saving up money to put a nice deposit down or to make more money to be able to afford a nice apartment so I can leave my house. Give them another one.

[Jade Warshaw]

Another one is there's going to be a Mrs. Derek in the. In the picture at some point, and when you see her across the bar or across the, you know, whatever, you're going to want to take her out and wine and diner and convince her to be Mrs. Darius.

[Ken Coleman]

All right, I'll give you another why. After we've gotten an apartment, we've learned how to live on our own and sustain rent and show some budget discipline, we're going to start saving up for a down payment on a house. That's another great why.

[Jade Warshaw]

That is great.

[Ken Coleman]

I'll let you wrap up the why.

[Jade Warshaw]

Another one is to have that extra margin because we want to save and invest for the future. And we suggest 15% of your income, and once that 15% is gone, you're going to want extra to live your life on, and it not feel super tight.

[Ken Coleman]

So, yeah, Derek, we just gave you four whys. How do you feel about those whys? They tend to resonate with you.

[James]

They resonate with me?

[George]

Yeah.

[Ken Coleman]

Okay, then. So you get to come up with more whys. But Jade makes a very good point. You will find yourself far more driven when there's an actual visual target, a visual destination. And she, I think, positioned it so beautifully as a why do I want to make more money? So back to the original question. I think you got to talk to Pops and see what a Promotion looks like. But I also think you're gonna have to look outside of that, because I think for you to make 16, 18, $20 an hour, you're gonna have to expand your vision and see what's out there and get after it, young man. And I would recommend, by the way, as soon as possible, get out of mom and dad's house. I think that's the logical next step for you. You feel so accomplished. And a nice boost of confidence that every young adult needs.

[Jade Warshaw]

That's right.

[Ken Coleman]

Comes from leaving the nest.

[Jade Warshaw]

Yes.

[Ken Coleman]

He's got it good right now.

[Jade Warshaw]

He does.

[Ken Coleman]

Making him three squares a day. He has no payments. Oh, yeah. All right, my man. Get after it.

[Dave Ramsey]

Let's be honest. Shopping for health insurance can be confusing with high costs, complicated terms, and customer service that doesn't really serve you. Most folks just pick a plan and hope for the best. See, insurance companies don't work for you. They work for themselves. Meaning they love it when you overpay. So you need a guide on your team to help you make the best choices. Health trust financial works for you. You. They're not salespeople. They help you find the health insurance option that makes sense and saves you money. The fact is, health insurance is one of the biggest expenses in your budget. But most people who work with health trust financial end up saving $500 a month. Imagine putting that kind of money toward the baby steps. My team has worked with them for over 20 years, and they've served thousands of people just like you. They're the only health insurance broker that's Ramsay trusted to help you. So stop throwing money away and get the health insurance that's right for you@healthtrust financial.com. that's health trust financial.com.

[Ken Coleman]

All right, let's go to Tyler in Jacksonville, Florida. Tyler, how can we help today?

[George]

Hey, I'm calling. So I'm 29. My wife is 28. We. We filed. We made 152,000 last year. We're on pace to make 175 this year. I'm a firefighter. She's in medical sales. So we bought a house a year and a half ago. We have a $350,000 mortgage. We have 28k in a car loan debt and 18k in student loans. My wife, when she was a young child, her grandma started her a UTMA account, and that account currently has 225,000 in it. We have 35k in a Roth IRA and about 20,000 in savings other than that. So my question is, do we use that h Or UTMA to pay off the car and student loan and then about save a six month emergency fund for the rest towards a mortgage.

[Jade Warshaw]

Wow, what a blessing to have that money just sitting there for you guys.

[George]

Right.

[Jade Warshaw]

What's your income?

[George]

Last year we filed 152,000 and then I just promoted and got a raise through my job. So we're gonna do about 175,000 dol this year.

[Jade Warshaw]

Okay. Yeah. And you said that as soon as you called in. I just didn't write it down in time. It was a lot of numbers. I was trying to keep up with you. Yeah. Okay. I think that this 225 sitting there, is it invested in anything? Like is it. Is there, is. Is there a return on it that's good that you're interested in or how much has it grown over this time is basically what I'm wondering.

[George]

So I've. When she got it started, she was young so I think it was started at 100 grand and it's at 225 now. We do get dividends in it year but like a couple thousand maybe not. It's not much.

[Jade Warshaw]

Okay. I probably would do that. I. If I were in your shoes. You've got the 25000 in savings that's also at your disposal. I would not touch the Roth or any invest like any retirement money whatsoever. The only thing with this is you might want to look into the tax implications because there's likely going to be something there on the growth. So I would look into that and find out what that would be. Because you're wanting to drain the whole thing.

[George]

Well, I guess so. Essentially our six month emergency fund would be like 35 to 40 thousand dollars like a good six month emergency fund. So we would keep that. But that's another thing where we keep that in the UTMA or put that in like a high yield savings or.

[Jade Warshaw]

I'd probably you could move it into a high yield savings. I'd want to know again what the rate of return has been on this. So what about the 25000 that you have there? Are you saying that you would add to it and put that up to 40? Is that what you're saying?

[George]

Right.

[Jade Warshaw]

Okay.

[George]

Yes.

[Jade Warshaw]

Yeah, I do it. I would just talk with somebody to find out what the tax implications are because there's going to be something on that.

[George]

Yeah.

[Jade Warshaw]

Yeah.

[George]

Okay.

[Jade Warshaw]

I think that's a blessing.

[Ken Coleman]

Yeah. Do you have a tax pro in your life that you can consult on this?

[George]

We do have a tax guy that we use but we Never brought this question up to him. He just kind of, you know, does our taxes. I guess so.

[Ken Coleman]

No, that's all right. I think Jay gave you a great answer as she walked you through it. I'm just saying consult with them so you have an idea what the tax implications are so that, you know.

[George]

Right.

[Jade Warshaw]

The money that went into it. The money that went into it was after tax dollars. So I don't think it's going to be taxed like the same way it would be like at your normal income rate. I don't think it is. But you'd have to check on that cuz you are going to be taxed on some of the growth that that's acquired. So that's important to know. I wouldn't want that to, you know, hit you upside the head, but other than that I would do it. I think the one cautionary tale that I have on this sort of thing is, is I think it's always a blessing when you're gifted money, when an inheritance comes through, you know, when you're able to kind of sell one big asset to get out of debt. I don't look down on that. I think it's a great thing. I think it's a blessing. However, there is a piece of that where I want to just say be careful and be cautious because the same guy that got into $28,000 of student loans and $18,000 of car loans and all of that, that is still that guy. And you got. You were throwing a lifeline here. And so you've got to be careful and make sure. Okay. Moving forward, I've got to change my habits and I've got to change my philosophy around debt or else I'll look up in five, 10 years and I'll be here again just with a different sort of debt and there won't be an UTMA there. Does that make sense?

[George]

Right? Yes.

[Jade Warshaw]

Okay. So that's just. That's all I got to say about it.

[Ken Coleman]

Yeah, I like that. It's a good word. I want to go to a question from our Ramsey Network app. This is from Tariq, who submitted this question. My wife and I are in our mid-40s with an 11 year old and a 14 year old. We share general financial information with them so that they will grow up knowing how to properly manage finances. We love it when they ask questions, but recently they've been curious about our current financial situation, specifically asking us, how much money do we have? We live modestly considering our net worth and are concerned that if they knew we Lived well below our means, they might begin to resent their current lifestyle style or let the information slip when talking with their friends. Where do we draw the line in the sand so that we're validating their curiosity while at the same time preserving our privacy? I love this question because our youngest daughter, she's just recently came back at it once more.

[Jade Warshaw]

How much money do we make when they put the wing on it?

[Ken Coleman]

No, she knows better now. I've corrected that. She's like, how much do you make? And I'm just like, babe, I'm not telling you.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And so I think there's a very clear. On that particular one, I'll say there's a very clear boundary, I think, so. That they're not able. They're not mature enough to handle it. They don't even understand the value of a dollar in the first place.

[Jade Warshaw]

I agree.

[Ken Coleman]

And letting it slip out, certainly, you know, to friends and other family members, that is a. An onion that doesn't need to be peeled.

[Jade Warshaw]

I 100% agree. If we had asked that when we were kids. Kids. If I ask my parents that, man, they'd be ready to slap the taste out our mouth. Like, we. That is like a. No. No.

[Ken Coleman]

Yeah. And so then the second question is, would they resent the way they live? And the answer is, I don't know if the word is resent, but they would start going, oh. And they start doing really bad math because they don't understand money and the value of money.

[Jade Warshaw]

Why can't we have this? Why do we have that?

[Ken Coleman]

And I do think that would create a problem. So I think the answer is, you're not mature enough to handle that. That's not something we discuss us. Yeah, go ride your bike.

[Jade Warshaw]

Go ride your bike or something. And if you want to teach them something, just say, you know, your dad and I work really hard, and we're good stewards of the money that we have, and we're blessed, and we use that to take care of you. You know what I mean? Like, that's my. My kids are not that age.

[Ken Coleman]

What are you going to say when. When you're done already?

[Jade Warshaw]

They already think they. They know a little something. They're like, we're. Do you know they use the word wheel lot. And so I have to go Cliff Huxtable on him and explain to them that they have nothing. Right.

[Ken Coleman]

By the way, that's. Do you remember that famous clip? It's. It's out there on YouTube, I'm sure, where he does that example with Theo Yeah.

[Jade Warshaw]

Oh yeah.

[Ken Coleman]

With the Monopoly money.

[Jade Warshaw]

Classic.

[Ken Coleman]

And he gives him all this money and he starts taking it back as he walks through the everyday experience to this day. That's probably one of the greatest. Whoever came up with that and wrote that segment. That's such a brilliant, brilliant example of how kids, how they handle the realities of money.

[Jade Warshaw]

Yeah.

[Ken Coleman]

And I, I'll just, I'll be honest with you. We got. It's been really fun to see my two boys, you know, both my boys as they've been driving. When I remember when they first went out, you know, they first went. They're like 16. I was paying their gas at the time. They're in football and all this kind of stuff. So limited how they could work. But anyway, the point is, is they would actually, even though it was my debit card, them looking at how much gas cost.

[Jade Warshaw]

Oh.

[Ken Coleman]

Shock that reaction when they filled up their tank. Tank, yeah. And they were like, wow, dad, that's crazy how expensive gas is. I was like, welcome to my life, pal.

[Jade Warshaw]

Yes, absolutely. I think as much as you can. Let them experience that.

[Ken Coleman]

That's the better lesson.

[Jade Warshaw]

It's the better lesson. My kids, they get, they have a chart on the refrigerator where they do their chores.

[Ken Coleman]

And what are you paying by the way for chores these days? Because I'm not in that game anymore. I'm curious.

[Jade Warshaw]

Listen, don't judge me. I'm not gonna judge you. My kids are 5 and 7.

[Ken Coleman]

So that's the context to.

[Jade Warshaw]

For my son, he's, he gets, he earns more because he's more responsible. So if he unloads the dishwasher, that's a dollar.

[Ken Coleman]

Okay.

[Jade Warshaw]

Okay.

[Ken Coleman]

It's not bad.

[Jade Warshaw]

And then if he takes out the garbages, like there's a couple of garbages in the house, I think that's 50 cents. Nothing is more than a dollar. Everything is a dollar or 50 cents. And then my daughter, everything is 25 cents or 50 cents. Wow. So they get paid at the end of the week and if they want to go spend their money, they've got a, they see now how much of toy cost.

[Ken Coleman]

Is that a pain for you to be carrying around all that change? Cuz the 25 cent hits, you got to have quarters laying around.

[Jade Warshaw]

They better do enough chores to where I get even, even amounts.

[Ken Coleman]

I was going to say mama doesn't want to be throwing out 75 cents.

[Jade Warshaw]

Next time on that.

[Ken Coleman]

I'll spot you a quarter next time. That's good. Do your chores. Here's a quarter. Call somebody who cares. Old Travis Trip.

[Dave Ramsey]

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[Ken Coleman]

This is the Ramsey show where we help you win with your money, win in your profession, and win with your relationships. Triple 882-55-5225 is the phone number. I'm Ken Coleman alongside Jade Warshaw and we're here for you, America. Triple 882-55-5225. Let's go to Pitch Pittsburgh area where Tracy joins us. Tracy, how can we help today?

[Tracy]

Hi, Ken and Jade. I'm so glad. Thank you for taking my call today.

[Ken Coleman]

You bet. What is happening in your world?

[Tracy]

All right. Lots is happening but for my call today. So my question to you is I'll just kind of get a little scenario here. You know, we have several family gatherings, you know, several times a year. And one of my relatives always seems to turn the conversations to money, you know, like how much things cost, how much she spends, what she pays for things and you know, right down to kind of the very high dollar amount. So, for example, at Easter, you know, she told all of us that her bonus payment was so big that she could buy herself a brand new BMW that we all got to go take a tour of out in her garage.

[Jade Warshaw]

And so she just up and said that out of the clear blue sky.

[Ken Coleman]

Kind of and then said, hey, you guys want to come out to the garage and check it out and see My new car. You know, real quick question. I want you to keep going, but I'm just curious. What is the relationship? Can you tell us what that is? Is it sibling?

[Jade Warshaw]

It's a.

[Tracy]

It's a first cousin.

[Ken Coleman]

First cousin. And did you grow up with said cousin? Did you spend a lot of time with her as you were growing up, or was it more distant?

[Tracy]

Yeah, I. Yep. I would say we were very. And we're could this day almost very much like sisters.

[Jade Warshaw]

Okay.

[Ken Coleman]

And how does this rub you when this happens? And you just gave us one example, but this is a pattern.

[Tracy]

Yeah.

[Ken Coleman]

Right.

[Tracy]

Yes. And so that's why I'm calling, because it does bother me. And, you know, I make a very good salary. I'm a registered nurse, and, you know, I just. I certainly don't feel comfortable talking about, you know, how much I paid for things and how much things cost and.

[Jade Warshaw]

Do you think she's trying to make. Do you. Let me. Do you think that she is trying to get a rise out of you when she says it, or do you think that for her, she's comfortable talking about money and you're just not comfortable? Does that make sense? Which one is it? Is. Is the onus more on her or more on you?

[Tracy]

I think it's more on her, like, maybe to kind of brag it up.

[Jade Warshaw]

And give me some more examples of what she might do. I want to know more.

[Tracy]

So. Oh, you know, I. So when we. When we first got there, first of all, she had bought some jackets, and they didn't fit, and so she gave me one of the jackets. I was like, oh, let me. You know, I'll pay for it. You know, it was a nice jacket, and she had bought one for her sister, and it was like, oh, no, no, no. You know, And I was like, oh, I really like it. Where'd you get it? And it was, you know, from this expensive denim company. And it was, you know, I mean, I paid $80 for it.

[Jade Warshaw]

And she ever said anything bad about. About you? Like, has she ever done the backhanded compliment where it's like, well, I know you probably couldn't afford something like this, so just take it. Like, is she giving a backhanded compliment when she does it?

[Tracy]

I wouldn't say that. No, not at all. It's almost like maybe she's a little. And I'm probably answering my own question. Maybe she's insecure and 100%.

[Ken Coleman]

That's the third scenario.

[Tracy]

I think she wants us to know how successful she is.

[Ken Coleman]

I think that's what's going on?

[Jade Warshaw]

I don't.

[Ken Coleman]

Well, I want. I want to dig a little more.

[Jade Warshaw]

I want to dig a little more so far. I'm going to tell you the side of the fence I'm on so far, Tracy. I think. I think it might be more you than her so far.

[Tracy]

Okay.

[Jade Warshaw]

And. And that I don't say, like, neither of you is a bad person or neither of you is, like, even an insecure thing. I think some people are way more confident talking about money. And I do think that there's certain things that it's just like, she's in a mode in her lifestyle right now. I don't. It doesn't sound like she's trying to.

[Ken Coleman]

I don't know. All right, let's go rewind. We've got your opinion. I want to rewind.

[Jade Warshaw]

Let me just finish. Here's the thing. I'm sorry if my brother came home, and I think he did come home with a new truck, and he was like, oh, he was. I said, oh, is that a new car out in the driveway? He's like, oh, yeah, I just got it. Let me go see. Let's go see it. And you go looking at it, like, I feel like that is kind of normal. And it's like, yeah, you know, I never thought I'd be able to get it, but I got a raise and I was able to get it. Like, I. That. I think that's okay. And then when you were telling me about the jacket, I was kind of like, well, yeah, I feel like if my. If I bought a jacket, I would give the other one to my sister. I'm pretty sure I have done that. And as long as she's not saying things like, do you know what I mean? Like, to be like, oh, well, I'll give it to you. I mean, I'm sure, like, I, I. You might not ever be able to have this. So I'm giving you, like, that would make me. That would burn me up. Right?

[Ken Coleman]

Okay, I got here. Ken, I want some more questions. All right. So, Tracy, are you the only family member that notices this and talks about this and is irritated by this?

[Tracy]

I don't know the answer to that because I haven't really talked to any of my other family members.

[Ken Coleman]

And you've not seen something. All right, another question. Sorry, I'm not cutting you off. I'm going to do rapid fire here. Okay. Have you. When she said that, let's talk about the BMW thing, and it came out of the blue clue, did you see anybody else kind of look at you. Like, roll their eye contact.

[Jade Warshaw]

Yeah.

[Ken Coleman]

Or make the UN like, oh, geez. Did any of that happen?

[Tracy]

No, I did not.

[Ken Coleman]

You didn't see that?

[Tracy]

No, it's just kind of like, oh, wow, great.

[Ken Coleman]

Okay. All right.

[Jade Warshaw]

Okay.

[Ken Coleman]

This is great.

[Tracy]

But you non verbal. No non verbals. Nothing that, like, you know, the behind the back, rolling the eye.

[George]

Nothing.

[Ken Coleman]

Like nobody else is saying this. Okay, Jay, this is stacking up nicely for you, but I'm not done.

[Jade Warshaw]

Okay, keep going. Dig in, Dig in.

[Ken Coleman]

I'm digging. This is really fun for me. Okay. When you said to us that you think she's insecure, give us some evidence as to. You said she's like a sister to you. Give me one other very clear example of her insecurity and how it pops up around how much money she makes.

[Tracy]

I don't know if I can give any other examples other than the fact that it just always seems it's something that the conversation is somehow going towards. You know, I went shopping and I spent a thousand dollars on clothes.

[Ken Coleman]

Okay.

[Tracy]

You know, I mean, to get a bonus big enough to buy a BMW. Wow.

[Ken Coleman]

One more question. I, I, I disagree with Jade. I will say I'm gonna make a statement in a question. I disagree that, that it's just normal for somebody at an Easter gathering to bring up that they got a massive bonus. That is, that went out and bought a Beamer. And I want to show you. I gotta tell you, if one of my cousins did that, I'd be like, you're a pinhead. I wouldn't say that to him. But I'm like, I think that's obnoxious, to say the absolute least. So I don't, I'm on Team Tracy because of that behavior.

[Jade Warshaw]

I would want to know. I feel like.

[Ken Coleman]

The question is, the question is, I.

[Jade Warshaw]

Don'T know exactly how it happened.

[Ken Coleman]

When she's around you without discussing money, she just always takes it to how much she spent on something. That's what I heard.

[Tracy]

It seems. Yes, yes. It's always like, we talk about other things, but then it always kind of gravitates back towards how much something costs or, oh, we need you. Get a new roof.

[Ken Coleman]

Now I'm ready to rule.

[Tracy]

Okay, my question to you is, how do you. How do I handle it?

[Ken Coleman]

That's where I'm going.

[Jade Warshaw]

Kill them with kindness.

[Ken Coleman]

I think I want to know what Jade says, so I'll be quick. Here's what I think. I think that a lot of this is her. I think it's very normal for you to actually feel this way. How? However, you're giving her way too much power and it's not your problem to fix. It's not your conversation to have. I think she is who she is, and I don't think you confronting her is going to change it. So I would go the route of putting up a boundary that every time she does that, I would change the subject on her. I think it'll do two things for you. It'll train you to not give her power and let it irritate you. And number two, I think it puts up a natural kind of conversational boundary to change the subject. Jade, you got 20 seconds. What would you add to that?

[Jade Warshaw]

I'd want to know if she started from nothing. Like, did she start from the bottom? And now we're here and she's just looking for someone to celebrate with. Because I want to celebrate with my sister, and I do.

[Ken Coleman]

This is obnoxious insecurity.

[Jade Warshaw]

I don't. She was never mean about it. She was never backhanded.

[Ken Coleman]

You don't have to be mean to.

[Jade Warshaw]

Be obnoxious, but backhanded is obnoxious, and that's US foreign.

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[Ken Coleman]

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[Jade Warshaw]

Ken, I want to go. I want to go back to this last call that we had.

[Ken Coleman]

We're going back to.

[Jade Warshaw]

I got to go back to it.

[Ken Coleman]

We ran out of time and we were doing some post analysis. This is good.

[Jade Warshaw]

If you were listening before, it was the lady calling in. She felt like her first cousin, who was more like a sister, was a little too braggadocious about her.

[Ken Coleman]

How much money she makes.

[Jade Warshaw]

Money she makes. And the example was she said, you know, she got a new Beamer and was saying, hey, I got this bonus at work and I was able to get this car. Come see it. And another example was like a. A jacket. She had bought the jacket and she got two of them. And so she gave one to her cousin, who was like her sister and was saying, hey, I got this jacket. I spent like 80 bucks on it. Doesn't. It doesn't fit. Would you like to have it? And so we were just kind of trying to come through with who. Who is in the wrong? Is anybody in the wrong? Is she actually bragging too much? And, Ken, you and I were a little divided on it, and I. I think it's only slightly. I think it's worth it to come back to. I know I have a couple of points. I was thinking, all right, number one is I do think that normalizing conversations about money is a good thing, whether we're talking to people we trust about struggles that we're having, having, or whether we're winning. And you want to be able to say, like, this was a really good year for me. Right, Right. And the truth is, both of those, you have to be choosy about who that. Who that person or those people are.

[Ken Coleman]

Yeah.

[Jade Warshaw]

And it kind of sounds like maybe the sister. I'm going to call them sisters because she said they're more like sister. Maybe the one sister felt, I can say this to you, and the other sister was like, ah, I don't feel comfortable with this, and that's okay. But I do think finding those people is important because, you know, when Sam and I were struggling, getting out of debt, I didn't really know who I could say. It's. It's hard to know who to say, man. Like, we've got $460,000 of debt. Then on the flip side, it's hard to know how to say, dude, I just paid off $460,000 of debt. Like, let's go celebrate. So finding those people is important. It's hard to find. Find them. And then also knowing. And this is kind of another one, like, standards of what you think of when it comes to money is going to be different for everybody. Somebody might think, oh, my gosh, you spent $30 on a bottle of wine. You're crazy. Somebody else might go, I can't believe you only spent $30 on that bottle of wine. Right. So there's also that discrepancy that can be there when you're in conversations, especially with family. Family. Clearly, the one sister thought, $80 on a jacket, she might not have thought anything of that. But the other sister thought, oh, my gosh, she spent $80. You know what I'm saying? So sometimes we think that we're on the same wavelength, and we're not. And it's not anything that's intended negatively. It's just two people in different financial worlds.

[Ken Coleman]

All right, so my. My only. My only comment on that and what you just said is, I'm finding good with all. All that. I just am a little bit more conservative. And I think there needs to be a very clear boundary with just about almost everybody in your life as to who you're sharing with, that you got a big fat bonus.

[Jade Warshaw]

You're right. You are 100. Right.

[Ken Coleman]

I think that's your husband or your spouse or whatever. I got a buddy, maybe your mom or dad.

[Jade Warshaw]

Friends. We have two friends. They are not family members. Because I think you're right. Family is. You know, we've got two family friends. Not family. Family friends. Friends that I would say are. Do it, like, in the same, like, wavelength. And so you can say, hey, I had a great year, or whatever it is, and they can take it.

[Ken Coleman]

Or you can say, but even then, are you specific?

[Jade Warshaw]

Not that specific.

[Ken Coleman]

That's my point. But you could say, man, we crushed it this year. A little fist bump.

[Jade Warshaw]

But at the table, to me, like.

[Ken Coleman]

You'Re not gonna be like, I just went and dropped $80,000 on a car.

[Jade Warshaw]

Oh, if he told me that, I would be like, right on. Like, I'm. I'm a call out Ben Clerge right now. If Ben Clerge called up and said, you need to understand That I just made a million bucks this year.

[Ken Coleman]

I would be like, let's celebrate very unique relationship. Let's say that.

[Jade Warshaw]

But I'm saying I think that that should be normalized, because how can he be out here crushing it and feel bad to.

[Ken Coleman]

For very close friends. That's normalized. Yeah, but not your first cousin who you don't see all the time, and.

[Jade Warshaw]

She comes over for, like, sisters.

[Ken Coleman]

I don't think. Well, it's not me again. I. I would say this about siblings. I think you. You got to be very careful about what you're sharing, about what you make to siblings as well.

[Jade Warshaw]

Yeah, Siblings.

[Ken Coleman]

Especially if one of yous. One of you. What am I saying? Like. Like from the New Jersey. I'll say one of you guys. One of you guys is like a higher up the ladder. You know what I'm saying?

[Jade Warshaw]

I just think that you're not wrong. I don't think you're wrong.

[Ken Coleman]

I think we got to be very, very careful because there's so much emotion.

[Jade Warshaw]

You have to know who is that person who can handle.

[Ken Coleman]

Because if you throw out something that you're legitimately excited about and it's got a number, and that number is foreign to them, and they got bad emotions around you or themselves or their money. But again, avoid it.

[Jade Warshaw]

You should avoid it. But I ask us as people to also.

[Ken Coleman]

Well, you're really passionate about this. I think this is a great campaign. I just think there's too much psychology around money to be talking about it in depth with a lot of people. Super small circle.

[Jade Warshaw]

That is so true. But I have a couple of really great friends, and they're so, so good at celebrating people. I have learned celebrating to be a better celebrator everything. No, no, you're right. You're right.

[Ken Coleman]

Like, in other words. You're right. In other words. Okay, so full disclosure. Okay. Jade and Sam and Stacy and I, we are friends. We enjoy spending time together. If we went to dinner with you and Sam.

[Jade Warshaw]

Yes.

[Ken Coleman]

And Sam said over dinner, hey, our company. I said the same. How's it going?

[Jade Warshaw]

How's it going?

[Ken Coleman]

Because I do say that. How's it. How's biz?

[Rachel Cruz]

And he's.

[Ken Coleman]

He said, bro, banner year, like 3x. What we did last year, you would.

[Jade Warshaw]

Be fine and dandy.

[Ken Coleman]

I'm absolutely, you know, celebrating.

[Jade Warshaw]

Yes.

[Ken Coleman]

I'm like, man, that's awesome.

[Jade Warshaw]

Yes.

[Ken Coleman]

But two things are not happening.

[Jade Warshaw]

He's not saying.

[Ken Coleman]

He's not telling me that exact number.

[Jade Warshaw]

Yes.

[Ken Coleman]

Maybe if I asked. And even then it would be a Gross number. It would be like, what was your gross? Like, I'm not going to get it. I wouldn't ask him. But he's also not going to go. After I celebrate, he's not going to go. And so, you know, but if he's.

[Jade Warshaw]

Not, this is a, we're making this up. If he leaned over, if he said, man, I had a banner year. And then if he leaned over, he was like, dude, I did like. And he said, I did like, da, da, da amount of money, you'd be like, holy, you know. Right, right. And you'd be like, dude, yes.

[Ken Coleman]

Like, of course.

[Jade Warshaw]

So even I, Sam, wouldn't do that. We're making all of this up. But if he did, I think that you'd be like, man, that's amazing.

[Ken Coleman]

I, I, I would. But I'd also, when you went home.

[Jade Warshaw]

Would you be like, stacy, can you believe that?

[Ken Coleman]

He said, and that's my point. I think it's, I think there's like, the surface. I'm not going to be a jerk. Right. But at the same time, I'm going be like, oh, okay, all right. Just throwing these numbers around.

[Jade Warshaw]

I think because I coach people with their money, I think the closer we are, I'm used to people saying amounts to me.

[Dave Ramsey]

Yeah.

[Jade Warshaw]

Therefore, if I hear it, it doesn't b, like, it's like, like John Cena, like, can't see it.

[Ken Coleman]

I will say this, but I'll come back to the point that we, we had with the, the cousins who are like, sister.

[Jade Warshaw]

Yes.

[Ken Coleman]

If in your scenario, he says to me, and Sam is such a low key, humble guy.

[Jade Warshaw]

That's why we're using Sam, because he doesn't say anything to anybody.

[Ken Coleman]

But we have to make the point here. He said, yeah. And he goes, as a result, he's like, I, I, he's like, I decided, dude, it was hard, it was hard to do this. It was a lot of money, but it was a great year. I've always wanted a G wagon. I'm making this up. And he says, I popped for one. That to me, that's okay.

[Jade Warshaw]

That's good. Yeah.

[Ken Coleman]

The specificity city.

[Jade Warshaw]

Yes. You, you don't say money made, you know, whatever in two cents.

[Ken Coleman]

I just think it can, it just is too risky.

[Jade Warshaw]

You're right. You are right. I, Yes, I think you can say, I think you can celebrate in a veiled way that still gets the point across. That still makes you feel like I just shared with my, my buddy.

[Ken Coleman]

Because the minute you put a number out there, it's a Comparison deal.

[Jade Warshaw]

It's different whether you're healthy or not.

[Ken Coleman]

I could be completely psychologically healthy. I could be humble. I could be living and graduating attitude. And I hear a number. And as soon as I hear a number, because it's a number, that means there's a number below it and there's a number above it. There's psychology around people, what they make.

[Jade Warshaw]

Yeah, you're not.

[Ken Coleman]

This has been a thing today. Should kids know? My point is, the minute you give me a number, I got my number. And my number is either above that or my number is below.

[Jade Warshaw]

All right, what's an expensive bottle of rum for me?

[Ken Coleman]

Me? I think over 100 bucks. I go, okay, I got to make sure I bucks. Yeah, it expensive. I didn't say affordable. I said if you said I'm any.

[Jade Warshaw]

Any. I'm just kidding.

[Ken Coleman]

That's expensive.

[Jade Warshaw]

I'm just kidding. I'm just proving your point.

[Ken Coleman]

Yeah, exactly. When you throw a number out there, folks, it gets dangerous. Stay away from the numbers. I hate to admit this, but I don't always eat right. I know I need to eat more fruits and veggies, but sometimes I just have to pound some chips because they taste so good. That's why I love my field of greens. It helps me eat healthy when I don't have much time. And each fruit and vegetable in field of greens was doctor selected for a specific health benefit. Heart, lungs, kidney, metabolism, even healthy, healthy weight. And folks, I ain't getting any younger. It's super easy to mix with water. And here is the great part of it. I thought it might taste like grass, but it tastes great. And only field of greens makes this promise. Your doctor will notice your improved health or your money back. So go to fieldofgreens.com Ramsay for 20% off your first order. That's fieldofgreens.com Ramsay to save 20% on your first order order.

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[Ken Coleman]

All right, it's time for our question of the day brought to you by why refi? If you've got a defaulted private student loan and no one else is going to work with you, I want you to try our friends at Y Refi. They help you explore refinancing options with a low fixed rate and a payment plan based on your ability to Pay. Go to yrefi.com Ramsey that's the letter y r e f y.com Ramsey. It may not be available in all states.

[Jade Warshaw]

All right, today's question comes from Hayden in Delaware. My fiance has 200,000 in student loans and that is her only debt. I am debt free and have a good amount set aside and saved savings. When we are married, do we take the savings and pay off a large chunk of the loans? We also want to buy a house in the next 12 months. So I don't want to spend it all on the loans.

[Ken Coleman]

We've got some very competing issues here and I want to just point out the word in the last sentence. We want to buy a house, so I don't want to spend it all on loans. All right, financial coach Jade, what do you say when somebody hits you with that and goes, but I don't want want to.

[Jade Warshaw]

I gotta bust their balloon, Ken. Unfortunately, I have to rain on their parade. I feel bad about it, but if I were in your shoes, I and I have been in your shoes. You want to start off any new marriage, new relationship, the best possible way and to clear out this debt in its entirety. It is a wonderful way to start a brand new foundation so that you can buy this house later on when you save up. And it truly is a blessing and not a burden. Not to, to be cliche, but when you've got this debt here, it's like, why wouldn't you finish it off? I don't know. He didn't say how much money they're working with. So would it be, you know, 100,000 left on the student loans? Would it be 10,000? I, you know, I don't know what your plan was, but to pay them off in full, especially Kim this is actually a great segue with what's going on now with student loans. You know, there are so many Americans who were in default because student loans are a problem, you know, and you never know what may be coming around the bend. So to be able to have this clinical cleaned up, out of the way, then you've got your full disposal of your income there at, you know, your full income at your disposal to use it to now save up for a down payment. There's no better way to do it than that.

[Ken Coleman]

Yeah, I agree. Cooper is up now in Knoxville, Tennessee. Cooper, how can we help today?

[George]

How are you all doing?

[Ken Coleman]

Good.

[George]

Good. Well, I appreciate you taking my call. It was a. It wasn't a quick wait.

[Ken Coleman]

Well, good things come to those who wait, Cooper. My grandmother say now I'm feeling pressure. It was.

[George]

It was worth it for me. I'm gonna run you through some numbers before I ask you my question.

[Ken Coleman]

Love it.

[George]

Awesome. Well, my wife and I are 26. I make 75,000 a year. She makes 45,000 a year. I work in trucking insurance sales, and she is a fourth grade teacher. So 120,000 a year as of Friday. This upcoming Friday, I will be getting a raise of $57,000.

[Jade Warshaw]

Wow.

[George]

Equal 132,000. And she will be making 48,000 next year with a total income of 180,000.

[Jade Warshaw]

Nice.

[George]

The kicker is she is giving birth to our first child a week from today.

[Ken Coleman]

Wow. Congrats.

[George]

Yeah.

[Ken Coleman]

Yeah, it's coming quick.

[George]

And we have 15,000 in savings. I have 15,000 in car debt. I have 42,000 in student loan debt. We have a beautiful home that we purchased about a year ago. And my question is, is, do I continue to tackle this debt? Because I think I could get it, you know, really, really low very quickly. But I also would like to start a fund to start our, you know, our son off well, to. To be able to go to college for free or, you know, when he turns 18, to have a good. Have a good savings for him when, you know, he gets 18.

[Jade Warshaw]

Listen, I love that. I love that you're thinking ahead. You're thinking about you guys income going up. You're thinking about this baby. That's tough. Come. Technically, in this moment right here, you're kind of on a pause until this baby gets here. Right. You've got. I think I heard you say you have 15,000 saved and you've got a car that's 15,000.

[George]

Yeah. Between two cars.

[Jade Warshaw]

It's between two. Okay. And so the good news is Once this baby is born, when everything goes well and the baby's healthy and they both come home and everything is good, you can just reach over and pay this car off. Right. And. And it'll be gone. And then you'll have your income to then knock out this student loan. Right. That's what I would do. So I'd push pause on paying anything off right now until the baby's there. Just stack up that money, add it to the 15,000 that you have saved, and yeah, when you're done, you knock out the car, then you reach over and knock out the student loans. Is there anything that I'm missing?

[George]

I mean, we'll. By that time, we'll probably owe about 215,000 on our house. Um, this past year, you know, we were. We. We bought a fixer upper and put a bunch of, you know, money into it from our reach back in our savings, which at the time we had about 40,000, you know, when we bought the house. So we used a lot of the money to do the updates and stuff. I'm quite handy, so I did them all myself.

[Ken Coleman]

Okay.

[Jade Warshaw]

Yeah, I might change the order on that a little bit. Okay, I might. You know, don't get me wrong. I've done it. Buying a fixer upper, you do feel compelled to do the fixes very quickly. Quickly, in this case, you know, you've kind of got some of that out of your system. You've, you know, fixed a couple of the things, made it a little nicer. I'd pause on that until this $42,000 of student loans is cleaned up. And then I'd pause again and stack up three to six months of expenses. And then I'd say, now we can hit pause or push play on, you know, a couple of the renovations. Especially since you're handy, you can do it for a lot less expense. And. And now we're investing 15%. So that's there, right? You all. You. You want to be doing that. So doing this in order of priority is going to cause you to think even more critically about what you do on the house. Right? Because once you start putting 15% in investments, it's like, okay, what does that leave us? And you mentioned wanting to put aside for your baby, which is baby step five. You do four, five, and six simultaneously. So you're doing all that now. It's caus you to say, okay, what can we do to the house? What's the most important right now? And you're able to kind of prioritize that in a different Way as opposed to doing it first. Now, everything you're gonna. Does that make sense? Everything makes the list now, but later on it'll feel a little bit more yeah.

[Ken Coleman]

And I, you know. Great. She gave you great financial advice. Can't add anything to that. It's beautiful. I'm just gonna speak to you man to man. I've been where you are. That first child gets there, and all of a sudden, this newfound primal responsibility just kind of washes over you. And, Cooper, I think you've got to be very, very wise to make sure that you see what's important in the now and not pay too much attention to what's important in the next. And that's not unique to men or anything else. It's unique to any parent when they start parenting. But it's a primal human problem that we think so much about the next that we miss what we need to in the now. And that'll get you in trouble in a variety of ways, get you in trouble financially, it'll get you in trouble emotionally, get you in trouble spiritually. I mean, I could go down the list here mentally. So my challenge to you is, and Jade gave you the step by step on what to do with the baby steps. They work. Trust the process here, and you're going to be okay. Don't let your fear about the next or your plans about the next override what you need to do in the now. And that would be my advice to you in this time. So, you know, you stay that course, you're going to be fine financially, and you're going to pay this thing off. And I would pay that car off with reckless abandon.

[Jade Warshaw]

As soon as the baby's reckless abandon. I like that.

[Ken Coleman]

You know what I mean? Like, as soon as the baby's here and healthy and all that, go for it. I absolutely would attack it with this newfound income and congratulations. Congratulations on that. But if you do that, you're going to feel so much better, and I want to give you a super practical reason why. What is your car payment on that car or both of those cars or whatever it is? What's your combined car payment?

[George]

280 and 420. So was that 700 bucks?

[Ken Coleman]

$700. Now, for just a second, I want you to just think about what happens if Jade and I promised you a $700 a month bump. How would that make. Make you feel?

[George]

I'd be stoked.

[Ken Coleman]

Well, you got a 700amonth raise coming as soon as you pay those cars off, right? That's $8,400 a year if I remember my basic multiplication. Is that right? 7 times 12 is 84.

[Jade Warshaw]

I believe you.

[Ken Coleman]

I was gonna have to take my shoes off if that was wrong. Use all my toes and my fingers to figure that one out. You just freaked out. That's a metaphor. Not actually going to take my shoes off.

[Jade Warshaw]

I was worried.

[Ken Coleman]

I know I had. You would smell the foot funk right here under the desk.

[Jade Warshaw]

I hope not, Ken. I like to think you're better than that.

[Ken Coleman]

I think so too.

[Jade Warshaw]

But you really.

[Ken Coleman]

It was a visceral reaction. So bad metaphor. But Cooper, this is a great long term play for you as well. Just in getting that raise from not paying those car payments. Congrats on the little one.

[Jade Warshaw]

Way to go.

[Ken Coleman]

You're going to do great, Cooper.

[Dave Ramsey]

The money and relationships tour is halfway over and the energy in every room has been unreal. Each stop has been packed with real talk, big laughs and life changing moments. Now it's your turn. Come hang out with me and Dr. John DeLoney in a city near you for a night that could change your money, your relationships and your future. This is your last chance to join us in Phoenix, Fort Worth or Kansas City the week of May 5th. Grab your tickets today at ramseysolutions.com tour.

[Ken Coleman]

All right, let's get to Alan in Denver, Colorado. Allen, how can we help?

[George]

Hey, guys, thanks for taking my call. How are you guys doing today?

[Ken Coleman]

We're doing great. What's going on with you?

[George]

So my wife and I, we're about a million dollars in debt.

[Ken Coleman]

Whoa.

[George]

Most. Yeah, well, most of it's homes. Mortgage. Yeah. So we have two homes.

[Ken Coleman]

Okay.

[George]

We just moved into our new one a few months ago. Our last house is currently being rented out for $2,300 a month. Mortgage is 24. Or, sorry, rent. They're paying 23. Our mortgage every month is 14. And kind of my question is, if we were to sell that house, we'd probably. It's probably doubled. It's about doubled.

[Jade Warshaw]

What would you bring from it?

[George]

About 250.

[Jade Warshaw]

Profit?

[George]

Yeah, profit.

[Jade Warshaw]

Okay. And then your current home, it has a mortgage as well?

[George]

Yes.

[Ken Coleman]

How much?

[George]

We're at 4,600amonth.

[Jade Warshaw]

And what's this?

[George]

We put $100,000 down on it and it was 745, but we owe 645 on it.

[Jade Warshaw]

645. Okay. And anything else?

[George]

My wife has a hundred thousand dollars in student loan debt.

[Jade Warshaw]

Okay. Anything else?

[George]

And we have a vehicle that we just bought not too long ago. That's 23,000.

[Jade Warshaw]

Okay. And what's you guys income?

[George]

Combined? About 170.

[Jade Warshaw]

170. Okay. Ooh, Alan, no wonder you're taking a lot of big breaths. I am too. It's a lot going on here.

[George]

Yeah.

[Jade Warshaw]

The good news is, you know, this is simple. It is simple. I think I said the good news a little too fast. There is good news. But yeah, the simple part is you pay off house number one, that you can profit 250 and we clear out the student loans, we clear out the car, and yeah, we throw the rest of that onto your current house. That's the cut and dry math on this. That's going to get you to a place of peace a lot faster, easily. The, the question that I have is kind of what caused this to begin with? Because when you told me that just recently you bought another car and went into more debt, I kind of was like, really? That feels reckless.

[George]

Yeah, yeah, probably a little reckless. We have two kids and, and the car that we had was kind of small for just our everyday use. And so we wanted to get something a little bigger, so we got a VW Atlas and we just wanted something bigger. And in my mind, unfortunately, my grandmother passed away a year or so ago now and we have an inheritance coming in. And I was like, okay, I'll just, we'll use that to pay for this car that should be coming in the next couple days. And it's like, okay, we can at least have an upgrade. And it'd be nice to have.

[Ken Coleman]

What happened to the, to the money if you went into debt?

[George]

What was that? Sorry.

[Ken Coleman]

What happened to the grandmother's inheritance money that only paid a partial amount of the car and you still owe 23K.

[George]

It's, it's coming, It's. We should be getting it this week.

[Ken Coleman]

Oh, okay. Well, that's good information though. How much is that? How much is it?

[George]

66,000.

[Ken Coleman]

So total money coming to us, if we sell the home, the first home plus the inheritance, we're at 316. 316,000, right? Yeah. And I think my main question was.

[George]

Like, should I sell that house?

[Ken Coleman]

Yes.

[Jade Warshaw]

Yeah, I would pay off all the debts. Yes, you need to, because start from.

[George]

Ground zero or refinance.

[Jade Warshaw]

I don't think you need to refinance, but you do need to pay this down, pay this debt off and pay your house down. Because even your home payment, it's well.

[Ken Coleman]

Above what it should be.

[Jade Warshaw]

It's well above what it should be. And you're probably feeling that too. So, for instance, I mean, let's think about this, when you pay off this car, how much more is that going to be back in your pocket every month?

[George]

It's like 350.

[Jade Warshaw]

350. What, what, what are the student loan payments now that we're out of the Biden an era?

[George]

I'm not 100% sure. I don't think we've started quite paying on it just yet. I'd have to ask my wife.

[Jade Warshaw]

I'm sure it's a decent amount. I'm sure it's maybe in the $800 range. So that's a lot of money that you're going to get back in your month to month and eventually get. Be able to have this second house paid off, because now with that 66,000, we're making even more headway to it. Now, I know $645,000 is a lot of money, and I'm not suggesting that you're going to snap your fingers and this is going to be gone, but it is going to get you a lot closer to where you want to be. And I think it's going to remove some of that weight, a lot of the weight off your shoulders, because I can feel it.

[Ken Coleman]

Yeah. And I, I'm not saying you need to refi. But I would at least talk to your mortgage pro on all of this or your bank, because I'm assuming he's in a jumbo loan. And so I don't know what it.

[Jade Warshaw]

Could be like a. Yeah, I don't.

[Ken Coleman]

Know what the rate difference is right off the top of my head here, here. And I'm not going to spend time researching it on the air here. But I, I would at least be looking at that because you're going to be able to put a sizable chunk on there. But this is an absolute no brainer. And I, and it's very interesting to me that you asked a second time after Jade walked through it, you're like, so I should sell the house? And the answer is absolutely. And I think there's going to be people in your life who probably already told you you shouldn't, but I want to take that on.

[Tracy]

There is.

[Ken Coleman]

I knew it. And by the way, every time everybody's called the show that I've been on and I've asked this question, same deal. Let me, let me, let me destroy their, their theory, if I may. Okay.

[George]

Yeah.

[Ken Coleman]

Well, you've got an asset and it's cash flow positive. Okay. Sound familiar?

[Jade Warshaw]

Yep.

[Ken Coleman]

Great. Let's run the numbers. You told me that your mortgage payment that is $1,400 a month and you're getting 2,300 in rent. That is a whopping $900 a month. And.

[George]

Right.

[Ken Coleman]

That ain't a lot of money. Okay. And 9 times 12 is. What is it? $10,800 a year. That's gross. Gross. That's before you pay any home expenses. You are not even breaking even is my guess, on some years. And if you are making a little bit of money, it's peanuts. So you remove this risk and yes, you don't have the asset anymore, but you don't have the risk and you.

[Jade Warshaw]

Just make more a month when you don't have it.

[Ken Coleman]

That's my point. So I was trying to destroy their theory.

[Jade Warshaw]

Got it. Yeah.

[Ken Coleman]

You know this idea of, well, your cash flow positive, maybe not at all. Jade.

[Jade Warshaw]

Yeah. Yeah. You could, you could be more cash flow positive by paying off this debt.

[Ken Coleman]

Yeah.

[Jade Warshaw]

You'd have more money in your pocket every single month, just with the car and student loan alone. And then you bring that back and now you've got the. You're not paying that.

[Ken Coleman]

Sell the house, man. You have overextended and it's in your two months in.

[Jade Warshaw]

And you might look into. Yeah, like Ken said, you might look into a refi or recast. Because if you're paying off hundreds of thousands on this thing and because it is, is already more, you know, well above 25% of your take home, this is going to put it in a place where you can keep it in a comfortable place but still pay the extra payments on it, as we would normally teach you to do.

[Ken Coleman]

Yeah, I kick the tires on that. And to Jade's point, now, now we're going to put all this extra money and you're in the baby step now of baby step three. And all that extra money goes towards three to six months of expenses. Talk about how that's going to allow you to sleep.

[Jade Warshaw]

Exactly, exactly. And it's worth talking about. About that. I, I can't stress this enough when it comes to houses, when people don't have them in their rightful place, because you're probably a guy you want to be investing. You want to be putting 15% aside. And it's really tough when you don't have your. I mean, what are you investing right now? Anything.

[George]

Yeah, I have a brokerage account with Wells Fargo, like advisors, and there's about 80 grand in there. And I have a federal. I work for the feds. That's why I've had TSP account.

[Jade Warshaw]

But I mean, on a month, monthly basis, what percentage of Your income. Are you putting.

[George]

10 into my tsp?

[Jade Warshaw]

10%. So I'm glad you said that. So for this purpose, for the. For the moment, I would back that down. I would completely back that down to zero until you get this paid off. I mean, I guess essentially, once you sell this house, it's not. It's going to be a moot point, but eventually you're going to be investing 15%. Once you've got. Got your three to six months of expenses set up, you'll do 15. And now it's going to feel a lot easier to do that with all these payments freed up. So that's kind of what I'm getting at, thinking more towards your future.

[Ken Coleman]

Yeah, I agree. Sell it, my man. And sell it and never look back. Hey, what are you still doing here? You know the rest of the show's.

[Jade Warshaw]

Happening on the Ramsey Network app, right?

[Ken Coleman]

So you got to jump over there to continue watching. You can download it for free. Just go to your app store, type in Ramsey Network. It's completely free, and I'll drop a.

[Jade Warshaw]

Link in the show notes to make.

[Ken Coleman]

It easy for you.

[Jade Warshaw]

So if you're watching on the app, you're in luck. But if you're watching anywhere else, this.

[Ken Coleman]

Show is over for you. So jump onto the app and let the fun continue. All right, Go on now. Don't make it weird. Okay, I. I got nowhere to go, so you need to go. Okay, bye. Bye now. All right, this is. It's getting weird over there, guys. What are we doing? It.