Your Debt Should Make You Uncomfortable

Summary

Podcast Summary: The Ramsey Show – Episode: Your Debt Should Make You Uncomfortable

Release Date: December 13, 2024
Host: Rachel Cruz & Co-Host: Jade Warshaw

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Introduction

In this episode of The Ramsey Show, hosted by Rachel Cruz alongside bestselling author Jade Warshaw, listeners delve into the critical topic of debt management. Titled "Your Debt Should Make You Uncomfortable," the episode emphasizes the importance of addressing debt proactively to build wealth and achieve financial freedom. Through real-life caller scenarios, Rachel and Jade provide actionable advice on handling various debt-related challenges.

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Caller Segments

1. Nick from Detroit: College Expenses and Savings Strategy

Timestamp: [00:48] – [04:00]

Situation:
Nick, a 21-year-old college student, seeks advice on managing his finances to avoid student loan debt. Funded by his father, Nick has completed Baby Step 1 (saving $1,000) and aims to decide between allocating extra funds to Baby Step 3 (establishing a three-to-six-month emergency fund) or investing 15% of his income into mutual funds.

Advice Provided:

• Jade Warshaw advises keeping the extra funds in a high-yield savings account rather than investing, citing the short investment horizon due to Nick's imminent graduation.
• Rachel Cruz reinforces the importance of maintaining liquid cash for unforeseen transitions post-college, suggesting postponing investment until financial stability is achieved.

Notable Quote:
Rachel Cruz at [03:28]:
"I think it's more important to have as much money, just cash available for these big transitions is the smartest thing, the way to go."

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2. Jay from Anchorage, Alaska: Retirement Plans Post-Promotion

Timestamp: [04:13] – [08:15]

Situation:
Jay has recently received a promotion that disqualifies him from contributing to his company's traditional 401(k) plan due to increased compensation. Instead, he's offered an unqualified retirement plan with limited returns and a small company match, prompting him to seek guidance on the viability of participating in this new plan versus pursuing other investment avenues.

Advice Provided:

• Jade Warshaw suggests exploring a backdoor Roth IRA and consulting a financial advisor to identify better investment options beyond the low-yield bond funds offered.
• Rachel Cruz recommends contributing to a traditional Roth IRA and considering index or mutual funds for higher returns, emphasizing the importance of personalized financial advice through a SmartVestor Pro.

Notable Quote:
Rachel Cruz at [06:08]:
"I think you're going to be better off... You could still be better just doing it on your own versus putting money into this."

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3. Allison from Philadelphia: Navigating Debt After Husband’s Death

Timestamp: [41:58] – [49:51]

Situation:
Allison calls in after the sudden passing of her husband, only to discover a pending sheriff's sale on her home. She uncovers hidden debts totaling approximately $86,000 amidst her husband's bankruptcy and life insurance. Struggling with grief and financial chaos, Allison seeks guidance on handling the foreclosure and understanding her financial standing.

Advice Provided:

• Jade Warshaw and Rachel Cruz urge Allison to confront the situation head-on by contacting the mortgage servicer to negotiate a payment plan.
• They recommend enrolling in Financial Peace University and connecting with a financial coach to navigate the complexities of estate handling and debt resolution.

Notable Quote:
Jade Warshaw at [44:06]:
"You have to call them up, and you're gonna have to find out what's going on with this, and it's not going to be fun."

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4. Katie from Dallas, Texas: Balancing Savings, Debt Repayment, and Investing

Timestamp: [51:54] – [84:34]

Situation:
Katie, a married individual with a combined household income of around $60,000, has amassed substantial savings ($47,230) and significant debt ($24,516) from credit cards and a car loan. She seeks advice on concurrently tackling debt, establishing an emergency fund, and beginning to invest.

Advice Provided:

• Jade Warshaw emphasizes the importance of prioritizing debt repayment and then building an emergency fund before diving into investments.
• Rachel Cruz advises consolidating finances into a joint account to streamline budgeting and financial planning, suggesting the sale of non-essential assets like boats to eliminate unnecessary debt burdens.

Notable Quote:
Rachel Cruz at [73:27]:
"We're one our income, when our income hits that account together, we are working as a team."

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Key Takeaways

1. Prioritize Debt Repayment: Address high-interest debts first to reduce financial strain and free up future income for savings and investments.

2. Establish an Emergency Fund: Before heavily investing, ensure that three to six months' worth of expenses are readily accessible to handle unforeseen circumstances.

3. Seek Personalized Financial Advice: Complex financial situations benefit greatly from consulting with financial advisors or enrolling in programs like Financial Peace University.

4. Consolidate Finances for Clarity: Joint accounts can enhance financial teamwork within households, promoting transparency and unified financial goals.

5. Reassess and Adjust Financial Goals Over Time: As life circumstances change (e.g., graduation, employment changes, unexpected events), regularly revisit and adjust financial strategies accordingly.

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Conclusion

In "Your Debt Should Make You Uncomfortable," The Ramsey Show delivers insightful guidance on managing debt, the importance of building an emergency fund, and the strategic approach to investing. Through relatable caller stories and expert advice from Rachel Cruz and Jade Warshaw, listeners are empowered to take control of their financial lives, ensuring that debt becomes a manageable aspect rather than a debilitating burden.

For more information and personalized financial advice, visit www.ramseysolutions.com.

Transcript

[Rachel Cruz]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Rachel Cruz hosting this hour with my good friend and bestselling author Jade Warshaw. And we are taking your calls, America, about your life and your money. So give us a call at Triple 882-55-5225. And starting us off this show is Nick in Detroit. Hey, Nick, welcome to the show.

[Nick]

Hey, thank you for having me.

[Rachel Cruz]

Absolutely. How can we help?

[Nick]

My question is. My question is I'm 21, I'm in college. I paid for my education with my dad, and I've got baby steps. One done. And I have no debt. I need to pay $3,000 per semester so that I don't go out of college with student loan debt. And would it be more beneficial for me to any additional money that I don't make? Putting into step three, I don't feel like I can be gazelle intense with that. Or would it be more beneficial to take 15% of my income and put it into a mutual fund for something further down the line?

[Rachel Cruz]

Okay, so you're. You have extra money. I just want to make sure I'm understanding your question. And you're asking if you should be using it to cash flow college or do something else with it mainly to.

[Nick]

I won't. Me and my dad have got it covered. I think 3,000. But should I put it towards a three to six month emergency fund which is baby step three, or should I just put it to a mutual fund and be able to gross money on it over time?

[Jade Warshaw]

If it's the 3,000 that you're using for your college, I just throw it in a high yield. Like if you get ahead, like say you've paid for the upcoming semester and you've also got 3,000 set aside for the coming, you know, the next semester. Even after that I just throw it in high yield. I would not invest it because the horizon is so short. Is that what you're asking? I want to make sure I understand.

[Nick]

Yeah. So you would just, instead of investing it because I'm able to, you'd say just save it in a high yield and then just put it to the next.

[Rachel Cruz]

Yeah, for sure. How many more years do you have left, Nick? How many more semesters?

[Nick]

I only have one more. So three more semesters total next semester and then senior year.

[Rachel Cruz]

Oh, okay. Okay, I gotcha.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And honestly, Nick, in that state, when you're in something like college and you are cash flowing out which is so great. I still would recommend. Yeah, not even investing really at that point, because just having liquid cash in case something happens, it's always a smart idea. And even after college, right, you graduate college and if you move to take a job somewhere, moving expenses and moving costs, like, there's just a lot of reasons to have money liquid at your age. And then once you graduate, you get settled, you get your first job, then you can really dive into investing. And at that point for you, you'll be at 15% automatically, which is so great for some people. They have to wait a few years to start investing. So. So I wouldn't, I honestly wouldn't rush into it. And I think it can feel like it goes against this idea of compound interest because we celebrate that so much of how great is. And the earlier you start, the better off you're going to be. Like all of that, but you'll catch up. Like, if you start all of this at 23, you will be fine financially. So I think it's more important to have as much money, just cash available for these big transitions is the smartest thing, the way to go.

[Nick]

And now would you. Would you also recommend me taking that out of that investment and then putting it back or just leave it there and from here on out, just save the money?

[Jade Warshaw]

Yeah.

[Rachel Cruz]

So there is money invested right now? Yeah, I would probably. How much?

[Jade Warshaw]

2,000.

[Rachel Cruz]

Yeah, I would just.

[Jade Warshaw]

Sure.

[Rachel Cruz]

I would leave that. I would only touch that money if you needed it to get through school without debt. But I think it sounds like you already have a plan on the other end to do that.

[Nick]

Okay. Thank you so much.

[Jay]

Yeah.

[Nick]

Provides a lot of clarity.

[Rachel Cruz]

Perfect. Thanks, Nick, for the call. All right, up next we have Jay in Anchorage, Alaska. Hey, Jay, welcome to the show.

[Hannah]

Hello.

[Nick]

Merry Christmas. Thank you for taking my call.

[Jade Warshaw]

Merry Christmas.

[Rachel Cruz]

Absolutely. How can we help?

[Nick]

Yeah, so I just received a promotion at work and the new compensation package makes me ineligible to contribute to the company 401k plan. So they've offered a different plan pre tax dollars, a small match, but it's unqualified. And I'm curious what your thoughts are on qualified plans. And this is the right.

[Rachel Cruz]

Yeah. I'm curious why you're not able to contribute to the 401k because you chose a different package for a benefit for your benefits.

[Nick]

No, they have told me that if the compensation exceeds a certain amount, the plan is not able to be contributed to.

[Rachel Cruz]

Oh, got it. Gotcha. Okay.

[Jade Warshaw]

So are you a very high earner?

[Nick]

Evidently so.

[Rachel Cruz]

Okay.

[Nick]

So I can't yeah. So I can't contribute to the 401k anymore.

[Jade Warshaw]

So explain to us what your options are again.

[Nick]

Sure. So they've offered a different retirement plan, pre tax dollars, a small company match, but it's unqualified, so it's unfunded. That gives me pause. And I'm curious what your thoughts are on those types of plans and should I contribute?

[Rachel Cruz]

What are they invested in? Do you know.

[Nick]

The rate of return is based on a specific bond fund? I don't have that in front of me recently. In the last year is about 5%.

[Jade Warshaw]

That's not very good.

[Nick]

That's what I thought.

[Jade Warshaw]

I mean, if I were you, my guess is you're not able to just do a traditional Roth ira. But I might start with backdoor Roth ira and I might ask a smartvestor pro what my, what other better options there are. Because I wouldn't want to be investing primarily in bond funds.

[Rachel Cruz]

No. And considering it's, you know, is it pre or post tax?

[Nick]

It is pre tax.

[Rachel Cruz]

It's pre tax. Okay. So, yeah, So I would probably, I think you're going to be better off and again, talk to a smart investor pro. But when you actually look at everything, I mean, even from index funds to mutual funds, you'll get a better rate of return just doing something like that. Even though you'll have to pay capital gains when you take all the money out, that's still going to be a better growth rate. Yeah, absolutely. But yeah. How much, how much do you make a year?

[Nick]

So the new compensation package base is 165 with potential up to 250.

[Rachel Cruz]

Okay. I think you'll still qualify for a traditional Roth IRA at that range. So I would definitely be funding that. You can fund up to $7,000 and that, that might change in 2025, but I would do that 100% and then I would probably just look at index funds or mutual funds. Beyond that, it's not retirement and you're not getting that match. But I, I, how much are they matching? What percentage it is?

[Nick]

50% of the first 6%.

[Rachel Cruz]

50% of the first six. Okay.

[Jade Warshaw]

It's interesting way. Okay.

[Rachel Cruz]

It's hard because it's free money coming from the company. Right. But again, your rate of return, I just think that you could, 5% is, I think you could still, I think, Yeah. I think you'll end up better just doing it on your own versus putting money into this.

[Nick]

That was my thought, but I was just looking for a second opinion.

[Rachel Cruz]

Yes.

[Nick]

For all your info.

[Rachel Cruz]

Yeah, absolutely. Jay, thanks. For calling. Yeah, I would do that. But then definitely, you know, sitting down with a SmartVestor Pro is always what we're going to recommend. I always, yeah. Hate giving blanket and investing advice, you know, in a three minute call because there are some ins and outs and different employers are offering different things. I mean the amount of changes that's occurred with retirement funds within companies in America even over the last 10 years, you know, companies offering now Roth 401ks, it's up by 20% versus what they were offering even five years ago. So.

[Jade Warshaw]

But good on him for looking deeper and seeing what those investments are and what their track record have been as opposed to just saying this looks good, I'll check the box. Right?

[Rachel Cruz]

Yes, absolutely. Yeah. Digging into that and looking at those numbers. But yeah, so yeah, I would get with the SmartVestor Pro J, double check all of that. But that, that's my, that's my knee jerk reaction for sure is because when you, when you look at all of these and, and the older people get, there are financial advisors out there that start to recommend more conservative funds.

[Jade Warshaw]

That's true.

[Rachel Cruz]

Like bonds and all of that.

[Jade Warshaw]

That's true.

[Rachel Cruz]

But, but still, I think even then, you know, it's advice you want to look at because to, because I think on the flip side, when you're still in quote unquote riskier, which isn't mutual funds aren't even that risky, you're still going to get a better rate of return. You know, I'm just never a fan of bonds is what I'm trying to say. Even, even as you get older, I just don't think that it's worth like yeah, the limited growth. So thanks again for the call, Jay. This is the Ramsey Show.

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[Rachel Cruz]

Welcome back to the Ramsey Show. Today's Ramsey Question of the Day is brought to you by our sponsor, why Refi? When you're trapped in a maze of defaulted private student loan debt, it's hard to find your way out. But why Refi can offer you a lifeline with a custom refinancing based on your ability to pay and a lump sum payoff option that you could qualify for after 24 months. So go to why refi.comramsey that's why refi.com Ramsey may not be available in all states.

[Jade Warshaw]

All right, today's question comes from Carissa in North Dakota. She says, should a couple getting married have guests pay for their plate at the wedding to help with costs? I'm afraid we won't get enough money in wedding gifts to pay for the reception. Oh, so it's you. You're the one that wants to charge. She was asking for a friend at first.

[Rachel Cruz]

I know, right? Right. Should a couple AKA should we.

[Jade Warshaw]

No, no, you shouldn't.

[Rachel Cruz]

I was like, I don't think so. Do you Listen, I think that's kind of tacky. There's a difference between wedding guests to pay so bad. I think that's like.

[Jade Warshaw]

There's a difference between tacky and hacky.

[Rachel Cruz]

Yes.

[Jade Warshaw]

This is tacky.

[Rachel Cruz]

This is not a. This is not a money hack.

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[Jade Warshaw]

Here's the thing. Like, you have to set your budget based on what you can afford to spend on the wedding. Not at. Don't treat it as an investment and say, well, I'm going to get. If I spend this, I'll get the money back in gifts.

[Rachel Cruz]

Right, right.

[Jade Warshaw]

Because that's what she's saying. She's saying, I'm afraid we won't get enough money in wedding gifts to pay for the reception. Well, that means you're basing it off of future money that you don't have now.

[Rachel Cruz]

That's right.

[Jade Warshaw]

So you've got to set the budget of what you can afford based on what you can afford today and let the gifts be the gifts. Like you can't.

[Rachel Cruz]

Yeah, no, that's not good. No, no. Having guests pay for their plate at the wedding. No.

[Jade Warshaw]

Yeah, that's a hard pass.

[Rachel Cruz]

And it's different if it's like your birthday dinner and y'all are all going out to d. You know, to, to for a big dinner and everyone covers their, their meals. Right. Like it's that kind of thing. But there is a, an etiquette. I feel like when you invite someone to your wedding to celebrate you, their, their presence is the gift, not them having to fund. Yeah, fund it.

[Jade Warshaw]

Yeah. Otherwise just do something less expensive that you can afford. And that way there's no like awkward.

[Rachel Cruz]

You know, there's, there are trends and we've talked about this. I think George Campbell and I debated this a little bit of people asking instead of a wedding gift to Venmo money to the bride and groom so that they can help pay for their honeymoon and like that kind of stuff.

[Jade Warshaw]

I, I think I have a problem with it.

[Rachel Cruz]

Me too. Jade. I think that's a little weird too.

[Jade Warshaw]

I have a problem with. I'm like, let people give you out of the now don't get me wrong. Like a baby registry. Let's, let's break this down. If somebody's having a baby and they make a baby registry, like buy, buy them something off the registry. Yeah, totally. Don't just go off. Like they've said, here's what I'd like.

[Rachel Cruz]

Yes.

[Jade Warshaw]

So follow the registry that I'm with. But when people just want money and they're telling you don't get me anything, just give me money, I'm kind of like.

[Rachel Cruz]

And if they want to do that, because some people, they will just give money for a wedding gift because. Yeah. And that's their choice. And that's great. But the, but like forcing people into a lane of how they're going to be generous to help you. I also, like, I don't know why, it just feels off to me.

[Jade Warshaw]

I think the digital quality of it and I might feel old fashioned. I also think the digital quality of it, like Venmo me. I'm like, can I, can I give you a nice crisp. Two crisp hundred dollar bills and a.

[Rachel Cruz]

Card and then you get to decide.

[Jade Warshaw]

And then you decide what you do. Like, don't put, don't put cash app. Like that is so not it a QR code.

[Rachel Cruz]

Hey, I don't know, maybe we're just.

[Jade Warshaw]

Am I just like a Gen Xer? Is that what the problem is?

[Rachel Cruz]

No, because I'm a millennial and I still think, okay, yeah, maybe it's the Gen Zers. Maybe they all think it's okay. Maybe, I don't know. Maybe it is. No, no more. I don't know. Would you put a Venmo. Would you put a QR code, yes or no at your. At your wedding reception? She says yes.

[Jade Warshaw]

What does the audience say? Venmo. Or let them get you a gift.

[Rachel Cruz]

Oh, good. Yeah. Everyone.

[Jade Warshaw]

Okay?

[Jay]

Okay.

[Rachel Cruz]

Okay. Good, good. I'm glad we're all in the same together. We'll blame Gen Z, like I feel like we do. Too often. Too often. All right. All right, well, let's head to the phones. We have Hannah in St. George, Utah. Hey, Hannah. Welcome to the show.

[Hannah]

Hi.

[Rachel Cruz]

Thank you for taking my call. Absolutely. How can we help?

[Hannah]

So my husband and I are on.

[Rachel Cruz]

Baby step one, and I'm wondering where I should put that emergency fund when it comes to, like, my bank accounts. So right now we have 10% that goes to our church, and then we do 10% of our income into savings. I'm wondering if that emergency money goes with my savings or should I put it in a different account?

[Jade Warshaw]

Okay, so in your mind, what's the difference between savings and emergency fund?

[Rachel Cruz]

Emergency fund, I wouldn't touch. Whereas, like, savings is, oh, I didn't know I needed an oil change, and I didn't budget for that. So it would come out of savings.

[Jade Warshaw]

And is this your starter emergency fund, like your thousand dollars, or are you talking about three to six months? Okay, so starters. Okay. So the way we would teach is if you're in baby step $1,000 saved, and then everything else that you have money saved would go towards baby step two, which is paying off your debt. And to answer your question, that thousand dollars, I would not keep it in my normal checking account because you might accidentally spend it. I would put it in a separate savings account, still keep it very liquid. Right. It should be something that you can get to if there's an emergency. Don't put it in a CD or don't put it in something that you can't get to. But I do think that there's value in getting it out of your normal checking account into a savings account. Not maybe. I. I don't like when there's a debit card attached to it. I like when it's just.

[Rachel Cruz]

Yeah, there.

[Jade Warshaw]

And if you need it, you transfer over whatever.

[Rachel Cruz]

But just high yield savings account. Hannah, I would go that and put your thousand dollars, and I wouldn't do right now the 10%. I mean, the 10% for giving. But we really. We don't talk about percentages for savings until baby step four.

[Jade Warshaw]

That's right.

[Rachel Cruz]

And so this, like, oh, we're going to put 10% of our income for savings and do an emergency fund. I would put it all together and I would not worry about the percentage. I would find whatever money I had in my budget and get that thousand dollars as quickly as possible. So you may be able to do it, you know, depending on what you guys make and what your budget is this month. Right. And it may be 25% of your take home pay and it, and it, and it fills up your emergency funds that way. But I would not look at percentages for saving right now. I would get that thousand dollars as quickly as possible. Then once you guys are completely debt free, then you bump it up to three to six months of expenses using that same high yield savings account. That's that thousand dollars will then kind of be that springboard into the fully funded emergency fund. How much?

[Jade Warshaw]

Yeah, Hannah, what do you have now? Combined.

[Rachel Cruz]

Combined income or savings?

[Jade Warshaw]

Savings and what you were calling emergency fund.

[Rachel Cruz]

So currently the emergency fund is at like 140 and the savings is about 300.

[Jade Warshaw]

Okay.

[Rachel Cruz]

How much you guys make a year? My husband makes about 55 to 60,000 a year. Okay.

[Jade Warshaw]

So yeah, to Rachel's point, combine all that together and just at this point you have $440 in your emergency fund. And so you've got another, you know, 550 to go. And then baby step one for you is complete and then it's moving on to baby step two.

[Rachel Cruz]

And Hannah, you would have, you could use that thousand dollars if something came up that you weren't expecting, because that's kind of how we qualify an emergency. It's when it's urgent and it's unexpected. So you, you know, something comes up and you're like, I have to do it now. Right. It's not like, oh, something comes up and I could fix it in six months. Right. That wouldn't be the emergency fund. This is like, oh, this has to happen today. And also, Hannah, in your checking account, we always say to have a buffer in that as well so that you're not, you know, there may be enough of a buffer in your checking out to cover some small expenses that come up because you're going to have a miscellaneous category in your budget ideally. So there will be things that come up throughout the month that you don't expect. But ideally it's coming out of the budget there. You're not having touch the emergency fund. The emergency fund's only when it's kind of big expenses that you're like, oh gosh, a couple hundred bucks. And it's, you know, we may have to dip into that. But I always like having a cushion. Jade, in my checking and depending on where you are in the baby steps, you know, if you're in baby step one through three, you know, it may be a couple hundred bucks in there as padding and maybe you bump that up more as you get into baby steps 4, 5, 6 and 7. But I do, Hannah, want you to have a buffer and you're checking that's not emergency fund driven or savings driven, but it's more lifestyle driven, if you will, just so that you don't go into the red and you're checking. So I hope that helps. Thanks for the call. We have two more segments coming up this hour. Give us a call at 888-825-5225. I'm Rachel Cruz hosting with Jade Warshaw and we.

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[Rachel Cruz]

Really, the best way to make the most of your money is by sticking to a budget. Creating a budget, sticking to it. I mean, it's probably the most powerful tool from a tactical standpoint when this comes to gaining control of your money, knowing where your income's going, knowing where margin is so that you can pay off debt and save and all of it. There's just something proactive about telling your income what to do. And if you've not downloaded everydollar, make sure to check that out. This is our budgeting app and you can actually download it for free. Create your first budget and really get in this habit and this rhythm of your life of budgeting and do and do this regardless of where you are financially. Those of you, like the last caller who's working to save up a thousand dollars all the way to those of you on baby step seven that the house is paid for, everything's done. Tracking your monthly expenses is so important because it just gives you this gauge of where your, where your money's going financially. And it just gives you a sense of control. There's so much in life that we can't control. So when you can find these things that you can actually get in a rhythm and be proactive with that is your income and that is a budget. So download every dollar for free in the app store or Google Play or you can click the link in the description. If you're watching or listening on YouTube or podcast, we'll put a link down there. But go and download every dollar. All right, going to the phones, we have Austin in Nashville. Hey, Austin. Welcome to the show.

[Austin]

Hi.

[Rachel Cruz]

Hello. Hello. How can we help?

[Austin]

So I am a full time college student. I'm graduating next week and I'm currently on step one. I'm just having trouble wracking my head around paying off all of the debt that I have.

[Jade Warshaw]

How much?

[Austin]

So I have. I don't have any student loans to start out with. I have about 15,000 doll car loans and credit cards.

[Jade Warshaw]

Okay, and what's your degree in? And do you have a job? Like, do you have a job lined up?

[Austin]

I don't have a degree. I have a diploma for graphic design.

[Jade Warshaw]

Got it. Graphic design. And do you have a job lined up for graphic design?

[Austin]

I have. Recently I've just looked at the job market and I decided that's maybe not something I want to pursue.

[Jade Warshaw]

Interesting. Okay, what do you want to pursue?

[Austin]

I've been looking more into becoming a mechanic.

[Jade Warshaw]

Okay, well, just generally speaking, just from talking to you briefly, I think you're more overwhelmed by that and not having a clear prospect to pay off the debt than probably the debt itself. Because I thought you were going to say, oh, I've got, you know, 50 or $60,000 of student loans. $15,000. We can make that happen. You just need a job, any job really. So are you working at all right now? And if so, what are you doing and what are you earning?

[Austin]

I am, I currently work at like FedEx. Warehousing, just building boxes around. And I, I was doing part time, I should be going full time here. And I projected to make about 35.

[Rachel Cruz]

Okay, great.

[Jade Warshaw]

You said 35?

[Austin]

Yes, ma'am.

[Jade Warshaw]

Okay, cool. And then what's your living situation like?

[Austin]

Currently living with parents.

[Jade Warshaw]

Okay, so there's no money. Are you paying them rent or anything? Or. You're pretty much kind of square there.

[Austin]

Just helping around, helping around the house.

[Jade Warshaw]

So I think for you the biggest thing is let's, once you graduate next week, let's move from full time to from part time to full time so you can get that full paycheck. And in this phase, it's good that you're not really paying rent because you can put the full force of your income on this debt. How much of it? Of the 15,000 how much of it is the car versus the credit card?

[Austin]

Credit card, it's very minor. It's just 500. I'm mainly worried about the car.

[Jade Warshaw]

Okay, so, okay, so we're 14,000. What's the car worth?

[Austin]

About nine right now.

[Jade Warshaw]

Okay. Yeah, I think with this, I think you can buckle down and pay this off, but you're going to be working like a madman.

[Rachel Cruz]

Yeah. Are you able to pick up shifts coming up here? I mean we're two weeks from Christmas and you're working at FedEx. Are you able to do, you know, overtime?

[Austin]

Yes.

[Rachel Cruz]

Okay. I mean I would. Austin, honestly like you're in a great position, like no kids seasonally, just to like all the way. I mean like I would tell them I will work as many hours as you will give me. And then another thing to think about, us and the ratio of car debt to your income, it's right on the line. We always say we want to know more than 50% of your annual take home pay or your annual income. And, and so that, you know, you're 35 is kind of what you're projected at right now. And 14. Yeah, you're just kind of on that line. And I think it's one of those questions even though you are upside down on it. I probably in your case would just pay it off. But always be thinking through with debt what is worth it because you want to, you know, calculate how many hours and how much money it's going to take to pay this car off versus if you're like, you know what it's worth. Is it nine private sale or nine to a dealership for a trade in? Did you look online?

[Austin]

Nine private.

[Rachel Cruz]

Okay. I mean yeah, you're probably break even but, but just, yeah, in the future it's just a good mental exercise even for people listening or watching, especially with car debt to say, okay, how many, how many hours extra am I gonna have to work to keep this car versus if I sold it, took out a loan for the difference, maybe a couple thousand more just to buy a beater and you know how significantly you'll get out so much faster. But again Austin, in your case it's kind of a break even from that point. So yeah, I would just be working extra. And then at the same time, Austin, be looking for a full time job of something that you want and you're in a great, I don't know, I think FedEx ups a lot of those places. It's great employment. So if you were there for us for you know, longer than maybe you're expecting, I think that's okay. But also know your next step into the job market is not going to be the perfect job. It's not going to be the thing that, like, you know, you've always wished for in the dream job. You're right out of college. So remember, kind of just like take what you're going to get. Yeah, that's right.

[Jade Warshaw]

And I think for you, I love what Rachel said and I want to take it even a step further with your car. You decide, you say, you know what? I'm tired of being in debt. I want this thing paid off in six months. And when you say that, then reverse engineered and say, okay, what does that mean for me, job wise? How much do I have to work to make that happen? Right. And that way you're, you're the one in the driver's seat and you're the one that's in control of this as opposed to, I make this and it's going to take me X amount of months making this money. Does that make sense? So kind of run it back and that's going to force you to work probably harder than you've ever worked before. And as far as the graphic design to mechanic thing, I think that you, I don't know what your plans are, but I feel like you kind of put that on hold for a second because you've just spent money on an education, you've just spent time on an education. Work for a while, get this mess cleaned up, and then during that time, research what it looks like to become a mechanic. As Ken Coleman would say, like get in that proximity, follow some people around, but don't just jump and make that choice before you've done detailed research. So.

[Rachel Cruz]

Yeah. Where, where are you graduating from? Austin is an online school or it's a local.

[Austin]

It's a tech school in Tennessee.

[Rachel Cruz]

Oh, okay. Okay, gotcha. Yeah. Well, I hope that helps Austin, just in the sense of just some encouragement that you're, you're in a great line of work with FedEx right now from a seasonal perspective. So, so take that. Take advantage of that over time, and this plan hopefully will lower that stress. And Jade's right, too. Map out a specific timeline of. Okay. You know, September of next year. Where am I going to be if I, if I start paying this stuff off? And I would pay the credit card off, like by New year, I mean. Yeah, I mean, like, it's 500 bucks too. And we talked to people, Austin, all the time. Yeah, all the time. Who are doing extra side gigs. And Jade, when we talk about this on the every dollar webinars and I and we ask them like, hey, how much, what do you do for a side gig, a side hustle and how much are you making? Some of them are making 2000. Right. I mean just for extra side hustles like. So there is ways to get this thing paid off in six months. It's very, very doable, Austin. So I think that will really propel you into some motivation to, to pay this off. Yeah.

[Jade Warshaw]

The moral of the story for me is of all the types of callers that call in that have debt to pay off, if you are single, if you do not have children, and if you are still living at home, you are in the best because you've got time. Like time is at your disposal. You know, you don't know true tiredness yet. So like you can really get in there and get, get tired working.

[Rachel Cruz]

And for all of you graduating, you know, now we're in may live like a broke college student until this debt's paid off. That's right, that lifestyle. Because I think the problem is, is when you get your first job and you're getting a salary, you know, this career, you're thinking, oh my gosh, I'm a grown up now. And you and your expectations of life suddenly kind of creep up of what that lifestyle looks like. But if you stay low on lifestyle while you get this cleaned up, I would rather be doing that at 21, 2223 than 3132 33.

[Jade Warshaw]

I know that's right.

[Rachel Cruz]

You got it, Austin. Thanks for the call.

[Allison]

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[Rachel Cruz]

Welcome back to the Ramsey Show. We are in the holiday spirits. Jade. We are in the middle of, I don't know, still shopping. I think I'm pretty much done. I have nothing wrapped.

[Jade Warshaw]

Oh, man.

[Rachel Cruz]

But Santa at our house doesn't wrap gifts. He just pulls the gifts out of the bag and they just are there under the tree, not wrapped. So that's always convenient for Santa.

[Jade Warshaw]

So what goes? Does anything go under your tree ahead of time?

[Rachel Cruz]

Gifts that mom and dad buy, like, we'll buy. You know, I see, like, one or two things that we'll wrap, but. But they unwrap a lot of gifts from, like, parents, grandparents. There's a lot of unwrapping happening there, which is great. But. Yeah, so that's a good idea.

[Jade Warshaw]

I might take you up on that.

[Rachel Cruz]

Yeah, that was my Santa growing up, childhood. Never wrapped either. So that was the same Santa, I think, that visits our house, too. It doesn't wrap.

[Jade Warshaw]

That's a good idea.

[Rachel Cruz]

Which is nice. But I. But we're still going through our lists of gifts for, like, we draw names on both sides of the family. You know, smart, all the things. So where. Where are you at with all of.

[Jade Warshaw]

Jay, listen, for me, like, me, myself, because I'm not in debt. I have purchased gifts for the kids, and my husband and I have done that. I've not fully finished with my husband. But this time of year, you know, this is the time of year where it really becomes a hot button topic because obviously we're a financial show. We want people to make their way to peace. And I said it last year, but posted it this year. A very, like, controversial statement. Controversial, as I like to say.

[Rachel Cruz]

And I think I was on with you. Right.

[Jade Warshaw]

So before we talk about it, let's show you the clip so you see where we're coming from. Roll tape. You don't have to buy gifts for adults. They're grown. They have their own money, their own job. If they want a new blender, they can go buy it. They do not need you to go Buy them slippers. Like they can buy their own slippers. I said what I said, Rachel. I said what I said. Okay.

[Rachel Cruz]

And I, and I actually, when you were saying it last year, I remember it and being like, that is so true. Like, if Aunt Linda needs something, like, let's get. Yeah, she's fine. Like Aunt Linda. Especially if you are getting out of debt, you're on a tight budget and it's been a hard. And it's been a hard year or two, you guys, like with inflation and stuff, I mean, it's just, people are just getting the necessities paid and there's not a lot of room. And so it was this guilt free reality that adults can take care of adults.

[Jade Warshaw]

Right?

[Rachel Cruz]

Did you get hate from it?

[Jade Warshaw]

I got so much hate. And here's the thing. Don't, don't, don't misunderstand. Like, the reason we're talking about it is not like to try to qualify it because like, I'm drinking water. I'm fine. It's for you guys. Because there are so many people. Rachel, a. Always read the caption because you need to see more. And I did explain. I was like, here's what I'm trying to say to you. Yes. I'm not saying adults can't have gifts. I'm not saying it's not nice to receive a gift. I'm just saying I look it up.

[Rachel Cruz]

On your Instagram right now.

[Jade Warshaw]

I'm just saying that if you're in this situation, I'm giving you permission to back away from the spending because we don't need them. You know what I'm saying? Like, I will get by if you don't buy me a Precious moments figuring, you know, I will get by if you don't buy me lotion from Bath and Body Works. I don't need your $15 gift. Thank you.

[Rachel Cruz]

10.8 million.

[Jade Warshaw]

10 point. Yes, 10.8 million of you. Not all of you, but a lot of you were concerned with Jade. This sounds a little like Grinchy. This sounds like a little Scrooge. And it's not that it's for people who are struggling with debt. I used to be one of those people and I was the person who continued to buy gifts on credit cards. And when you're broke. And I'm gonna, I'm gonna say this lightly because I think people will know what I mean. When you're broke, you buy broke people gifts. You know what I'm saying? Like you, you go to the dollar store and you rack up and you buy like 10 and 20 gifts. But I'm like, you can't afford it. And that ten dollar gift is not breaking them free. They're okay without it. But it is causing stress for you because now before you know it, you spent two or three hundred dollars that probably you should have put towards a collections bill or probably that you should have put towards paying off your car. And that's what this whole thing is about. It's about changing our behavior and not feeling pressured to spend our money.

[Rachel Cruz]

That's right.

[Jade Warshaw]

You know, and some of you are like, well, Jade, I don't feel pressured to spend. Like it's my love language. I love giving gifts and if that's you, fine, you don't feel the pressure. But now let's just look at, look at what is it wise for us to do? Like, is it wise for me to spend in this type of way? And I'm not saying don't participate. I think Christmas is great. It's the, the most wonderful time of year. I think there's a way that you can participate. And here's what I would say, Rachel. And this was in the caption, if you had read it. Okay. In the caption I was like, make a very short, very prioritized list.

[Rachel Cruz]

Yes.

[Jade Warshaw]

I would start with kids, like nieces, nephews, your own children. Right?

[Rachel Cruz]

Sure.

[Jade Warshaw]

And buy for them first and use cash. No problem. I'm not mad at that. And then if you have some adults, like VIP only.

[Rachel Cruz]

Yes, Yes.

[Jade Warshaw]

I would say they're next. For most of us, it's our mom and dad, or maybe it's like our sister and brother. But I would not get too crazy with this. If you're shipping packages across the U.S. it's expensive.

[Rachel Cruz]

Totally.

[Jade Warshaw]

You can't afford that.

[Rachel Cruz]

Yes.

[Jade Warshaw]

Somebody needed to tell you that you couldn't afford it. And it's not out of shade, it's really out of love. Because I don't want you to be further in debt. And I think that most of us don't do this, but we probably should. Rachel, when the holidays start, like when Halloween ends, right. We need to stop and go. Okay, what was it about last year's holiday season that went well? And what was it that didn't go well?

[Rachel Cruz]

Yes.

[Jade Warshaw]

And kind of set that intention ahead of time. And most of us will go, man, I was so like overextended or man, I overspent. And it really didn't have the effect I thought it was going to have. Right?

[Rachel Cruz]

Yes.

[Jade Warshaw]

And we can go back and say, you know what, I made all Those freaking side dishes and spent all that money, and we would have probably, like half of it didn't even get eaten. Right. And you can see the ways that you spent your money that didn't make a huge impact. And I think it's the same way with Christmas. There's so many gifts and it's like, you know, the kids probably would have been just as happy. Like, I could have cut back a little bit and they would have still been happy.

[Rachel Cruz]

Absolutely. For, you know, for sure.

[Jade Warshaw]

So there's some moderation that has to be going on here, Rachel.

[Rachel Cruz]

And I think that's the. Yeah. And I think the level of discipline and planning, some people just don't. They don't do. And it's a little bit on a whelm. And that's where people get in trouble with money, is because it's so emotional. And all of these emotions are driving your decisions. And usually when that's the case, when our logic isn't doing it and it's our emotions, we do tend to overspend. We make spontaneous decisions that probably are not great in the long run, because in the moment, it feels good, it feels right. And then you look back after logic is set in with maybe a level of regret, of realizing, oh, my gosh. And this is the reality, too, Jade, is that, you know, we're, again, we're not like the Grinch stole Christmas kind of people, but 28% of Americans are still paying for Christmas.

[Jade Warshaw]

Last year, I heard a stat that said 49%.

[Rachel Cruz]

Oh, my gosh. Yeah.

[Jade Warshaw]

Oh, wow.

[Rachel Cruz]

Any, like, any level of that. So there's obviously a clear boundary issue that we're having that. That. That we're not able to afford. And so to your point, the kids are the priority Christmas and the Christmas spirit and all this stuff. Right. It's the kids. The adults are going to be okay. Right. So prioritizing that and then even within your kids.

[Jade Warshaw]

Right.

[Rachel Cruz]

Of your family, if. If it's going to look different than last year because maybe this year is the first time you are doing it on a budget. Talk about it, communicate it, talk about the different. Christmas may look a little different this year.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And then even thinking through the motivation, too, of why you're buying everything in the first place, that's always a big question for me, because even for kids, like, I. This was probably two years ago, Jade, everyone, like, they're on social media, on Instagram, they were just posting, like, Christmas Eve, like, merry, you know, and there's like, a picture of, like, their tree and, like, oh, and all the gifts and stuff. And I was like, oh, I was flipping through. I was like, well, that's kind of sweet. So I did it as we're going to bed. Like, we had our lamps on, and it was just a pretty little picture. So I just, you know. And then we had our gifts out from. Yeah, we had our gifts out. And so I took the picture and just captured Merry Christmas. And I got so many comments on my minimalist Christmas.

[Jade Warshaw]

Oh, they're like, rachel, where's.

[Rachel Cruz]

Oh, whatever. So refreshing. It's just a minimalist Christmas at the cruises.

[Jade Warshaw]

And I was like, this is regular.

[Rachel Cruz]

I thought we, like. I thought we were doing. I thought we, like, had a great Christmas. But then as I looked through, I'm like, oh, no. From what? People. People go hard. And again, it is not bad. If you have the money and this is where you're choosing it, that is totally fine.

[Jade Warshaw]

Yeah, no, you're grown. You're grown.

[Rachel Cruz]

And we're also the moms. You and I both talked about this yesterday during a break. When we did the show yesterday, I also had three trash bags full of crap that our kids just don't use in the playroom and in the closets in the room. I'm like, so then it's just. Stuff just ends up building up. And that's the consumerism where I'm like, I'm not going to buy you stuff just to buy you stuff either. So.

[Jade Warshaw]

That's such a good point. I think you're right. At the end of the day, everybody's grown. You can spend your money on what you want to spend your money on. I mean, that's the. That's the cold, hard fact. But if you want our advice and if you're a person who's trying to get out of the debt, the point is, you have permission to back away. Like, you don't have to opt into all of the things that the holidays want you to opt in. And we're just trying to give you that out. That's really what it amounts to.

[Rachel Cruz]

I'm gonna. I'm gonna end with a. With a hater comment. Jade, you ready? And buying slippers hurts your wallet. You have other problems. This is very financial illiterate advice. So I would say yes. If slippers hurt. Hurt your wallet, you have other problems is exactly what we're saying. Yes. Yeah, it does. So then we gotta dig into that why that is. All right.

[Jade Warshaw]

Well, Jade, it's been real.

[Rachel Cruz]

Great segment. Thanks for giving us the Christmas spirit. We appreciate it. Thanks to all the guys in the booth. And thank you, America. This is the Ramsey Show. We'll be back.

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[Rachel Cruz]

Live from the headquarters of Ramsey Solutions, it's the Ramsey show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with bestselling author Jade Warshaw, and we are taking your calls on life and money. So give us a call at Triple 882-55-5225. We are here to chat with you. All right, starting us off this hour is Allison in Philadelphia. Hi, Allison. Welcome to the show.

[Jay]

Hello. How are you guys today?

[Rachel Cruz]

We're doing great. Thanks for calling. How can we help?

[Jay]

Well, okay, I'm just going to be quick about this. My husband passed away. And yes, you know, he would. You know what? You had to love him or you.

[Jade Warshaw]

Had to hate him.

[Jay]

It was one or the other. My question is, he hid everything from me. The day he died, I found out we had a sheriff sale also on that day, for my home. And I had absolutely no clue. He had all the paperwork, everything, sent me to the store, sent me to Atlantic City like we had nothing wrong. And so I met a pickle. I'm not really sure what I should do about this.

[Jade Warshaw]

Holy smokes. Okay, so when did I.

[Rachel Cruz]

Surprise. Yeah. When did all this happen, Allison?

[Jay]

September 17th. I also moved my father into my home. Six weeks prior to that, he was in Colorado. He's been there 56 years. I just moved him back here, and then this happened, so.

[Rachel Cruz]

Man, I'm so sorry. Okay. I mean, it's amazing. It would be so difficult to be grieving the loss of your husband and then at the same time uncovering this other reality that you had no idea was happening, financially speaking.

[Jay]

Yeah, I felt like I got hit by a two by four. You know, he's knocked out on to the ground, definitely. Yeah. And I have my three year old grandson lives with me and two of my adult daughters. Because it's very expensive here. You know, the taxes are really. My taxes are 10 grand. I don't even have a quarter of an acre. You know, it's just really expensive.

[Rachel Cruz]

Yes. Okay, so. Okay, so walk us through. You may have said at the beginning of the call, but what, what's the state right now of where you are financially after you've uncovered everything. What's. Where are you?

[Jay]

Well, I got a little bit of life insurance.

[Rachel Cruz]

Okay.

[Jay]

200,000.

[Rachel Cruz]

Okay.

[Jay]

I believe he was in the rears for 86,000. He was in a bankruptcy for three years to save the home when he was in the hospital a couple years ago. And that was fine. He was paying $3700 into the bankruptcy and 24 to a regular mortgage.

[Jade Warshaw]

Okay.

[Jay]

And I guess he just ran out of money and never told me.

[Jade Warshaw]

So what does that leave you? What are you after? Everything's kind of come out in the wash. What does that leave you with and what are you still trying to sort out?

[Jay]

Well, I have, I don't believe that I owe what they're saying I owe. I understand there's interest in all that, but they, they kind of put us in that position. It's a, it's a servicer that has been taken to court many times and had to pay out millions of dollars for wrongfully taking people's homes. And this is what I was battling for a few years before I stumbled on that when he was in the hospital. So I just wanted to know what is the bottom line? Like what can I pay to get it out of foreclosure and then possibly just keeping the mortgage and paying that off. I don't even know what I think.

[Rachel Cruz]

How far behind are you?

[Jay]

Well, he stopped paying that mortgage or that the more the mortgage and the bankruptcy in January.

[Jade Warshaw]

Oh, okay. So it's about to be 12 months of no payments.

[Jay]

Right.

[Jade Warshaw]

And have you had contact with anybody about this? Or is this you just looking at, you know, the statements that come in the mail or whatever?

[Jay]

I get physically ill opening those statements because of what happened five years ago. They actually told me they couldn't talk to me because I wasn't on the mortgage, but I was on the mortgage. So they Made me behind even more time.

[Jade Warshaw]

And you're sure that you're on it at this point?

[Jay]

I'm positive. I got my own paperwork. Hidden. It was hidden in the closet.

[Jade Warshaw]

Okay. So when you. You're gonna have to call them up, and you're gonna have to find out what's going on with this, and it's not going to be fun. And I know that you're dreading it. You probably have a pit in your stomach now, but you're gonna have to go. Okay, where are we in this process? Is there anything that I can do to pull it back from foreclosure?

[Rachel Cruz]

What.

[Jade Warshaw]

What would I have to pay? And then once you find that out, you have to look at your own finances and go, can I even pay this? And then there's part of this. I don't know if you want to hear this, but what you're describing sounds like absolute, like, 80 double hockey sticks. Like, I. Do you want the house, or do you want to find a way to sell it? Let the bank sell it and move on with your life?

[Jay]

My. What I would like to do is at least keep it so that I can sell it, because I have. It's worth 620, and I owe. What they say I owe is 3 20. My mortgage was for 343, 15 years.

[Jade Warshaw]

Ago, so you owe 320. It's worth 620 for. Usually it would be like, okay, can I. Once I can get back on track with the payments, let's come up with a payment plan so we're back on track. And then at that point, you're paying the mortgage, and then you can decide if you want to sell it or not. The question is, let's pretend. I mean, let's pretend like I'm the servicer. And I say, all right, Allison, you're gonna have to pay a payment and a half for the next two years. Let's just. I don't know what they'll tell you. Could you even do that?

[Rachel Cruz]

Yeah. Are you making an income, Allison, right now?

[Jay]

No, I'm not. Because of my. I was taking care of my uncle who passed away last Christmas. He was dropped off at my grandson's birthday party, and they're saying, here you go. You get to take care of him. I took care of him for two years, so I didn't work.

[Rachel Cruz]

Alison, there's a lot of you taking care of people, including your own children, your grown children right now, which I'm not defaulting you. But there is something to understand, Alison, that you have to take Care of yourself first and foremost. Right. And that's not a selfish idea. You can't take care of people while you're drowning. Right. You have to get yourself in a very stable position. And so. So he had this life insurance. Did he have any retirement? I mean, I'm assuming with all the foreclosure stuff he like.

[Jay]

Yes, yes, it was, it was. It's in stock.

[Rachel Cruz]

Okay. How much is that the year?

[Jay]

I'll get 20 grand a year for six years and it was 117 and I guess I don't know how well that works, but I get 20 grand every September for six years and I can roll it back into it or, you know, use it or whatever.

[Rachel Cruz]

Was he working before he passed?

[Jay]

Yes.

[Rachel Cruz]

Okay, what was he bringing in at the time?

[Jay]

He was making about 11 grand a month.

[Rachel Cruz]

Okay. And. And then. Yep. And you have a 200, 000 in life insurance. How old are you?

[Jay]

I am 58.

[Rachel Cruz]

58. Okay.

[Jade Warshaw]

If I, before we get off, I want to set you up with a coach to help you go through all of this because I think that there is a lot to go through. You probably, with this all said and done, you probably have the money possibly to keep this house. But I don't know, it's hard to know because it sounds like there's a lot of secrets and a lot of skeletons and a lot of closets.

[Rachel Cruz]

And you have to determine what Jade was saying earlier too, Allison, that with this house you got, you were, you know, essentially should have been be able to make these payments on, you know, $150,000 income is what he's bringing in around that. And you. And to supplement that, you don't have that. And so I don't want this house holding onto this house. I don't want you to drain everything just to keep the house. To Jade's point earlier. So yeah, if you, if you hold on the line, Emily's going to pick up and we are going to set you up with a financial coach because getting all of this and from a legal perspective, yes, the contacts that you need and all of it, and they're going to be able to ask even more questions, Allison, than we can on in six minutes here on a one call in the segment because there's probably other things there as you start pulling a string to really figure out and get yourself like in a position of all knowledge to start making wise decisions with all of the information possible. So hold it on the line and we will give that to you as our gift. And we are so Sorry, that. That is what you're up against. It's terrible.

[Advertisement Speaker]

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[Rachel Cruz]

Welcome back to the Ramsey Show. Up next, we have Katie calling us from Dallas, Texas. Hi, Katie. Welcome to the show.

[Hannah]

Hi. Hello. So glad to be here.

[Rachel Cruz]

Well, thanks for calling. How can we help?

[Hannah]

I have a big problem. Well, I don't know if it's too big, but my question is, how do I tackle my debt while establishing an emergency fund and investing at the same time?

[Rachel Cruz]

I can see how you're overwhelmed with that because that is overwhelming trying to do all of that at the same time. What's causing you? What's the motivation and trying just to get it all done? Do you feel like you're behind on investing? You don't feel like you have enough savings? There's a lot of debt. What's causing you to do this?

[Hannah]

So I've held onto this large amount of money in my savings account. I started saving since I was 16, and I just. I'm exhausted of seeing it just sitting there. I want to do something with it. My frustration is I'm not knowledgeable in investing and I don't even know where to start. I don't know.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

How much is it?

[Hannah]

It's $47,230.

[Jade Warshaw]

Okay. And that's just sitting in savings. And then how much debt do you have?

[Hannah]

I have $24,516 in debt.

[Jade Warshaw]

Okay. Well, the good news is we'll give you a plan so that you feel like you're going in a direction and you feel confident about what that direction is. Also, the good news is you're going to be out of debt basically today.

[Rachel Cruz]

If you follow our plans by tonight.

[Hannah]

So that's exciting to hear.

[Jade Warshaw]

It is. Listen, you've done a wonderful job saving, and it sounds like you weren't really sure what direction to go, so you kind of just try to do everything. And the way we teach kind of narrows it down and you do one thing at a time for a period of time, and then you kind of are freed up to do more. But for you, the first step, and you've already covered it, we always say the first baby step is you just need a thousand dollars saved. You got that? So check that one off the list. The next step is we take any additional savings that we have or we work really hard to pay off our consumer debt. And for you, you have the money to do that. So that would be baby step two, pay off consumer debt. Get the green check.

[Rachel Cruz]

That's right. And Katie, what is the 24,000? What kind of debt is it?

[Hannah]

One credit card in the amount of 65, 63. Another credit card in 67, 83. And my car, that is 11, 170.

[Rachel Cruz]

Okay. So, yeah, so part of this paying off debt. For most people that call the show, Katie, I would say nine out of ten of them don't have money to pay off these credit cards in this car. So we're going to be talking to them about working, extra, sacrificing lifestyle, all of it. But your position is completely flipped because you, you have that cash. So, like, what Jade was saying is that's a big green checklight. But also, Katie, we want to establish new habits so that we don't get back into this place of debt again. So what were you using the credit cards for? The. The two.

[Hannah]

Just spending. Monthly spending. I'm. I have a problem of. I like seeing the money there. I like feeling secure. I Like feeling safe. My problem is just letting go of that money.

[Jade Warshaw]

Listen, I think for personalities like you, when we reframe what security and safe is, I think they thrive even more. Because if you're a person who loves being secure, being safe, you're going to love a debt free life. Because debt really does equal risk. Because using credit cards, that's a form of debt. It equals risk. Because for most of us, we go about our life, right? You put, yeah, maybe you put shopping on the credit card, maybe you take out a car loan. But if you were to lose your job, suddenly you feel the risk of that because you go, oh my gosh, I don't have the income I used to have coming in and I have this car payment due, I have to pay the credit card off. And suddenly we feel the risk of that weight that we've been carrying in debt. Right? So if you're a person who says, no, I love security, then paying off your debt truly is ultimate security. And then turning around and saving up three to six months, which is the next step, Baby step three, having that three to six months of cash sitting there, that's actually your money. It's not money that you owe to credit cards or car notes. That is the ultimate form of security. Because then you can say, no matter what happens, I'm prepared for a storm. If I lose my job, I know I have the money to keep everything going for the next six months. If an emergency comes up, you know, the water heater goes out or something happens with H Vac, I have the money that I can cover it. Yeah.

[Rachel Cruz]

And the three to six months to Katie is enough to. To what Jade saying, when these big things come up to cover with cash. But it's also not so much that you're getting frustrated that you're not making a lot on a return. Right. So it is that perfect medium. Are you single, married, kids? What's like your life status?

[Hannah]

I am married. I have one baby.

[Rachel Cruz]

Okay. So since you like security, Katie, I would go more the six month emergency route versus the three month.

[Jade Warshaw]

Yep.

[Rachel Cruz]

So I would stick with that. Six months. Do you know from an operating budget perspective how much money you guys need per month just to keep kind of where you're at? And I, and I'm thinking, you know, mortgage payments, utilities, gas in the car, food, all of that. What's kind of a. What would you guess to keep you guys afloat for a month? How much money.

[Hannah]

For him and me, myself together?

[Rachel Cruz]

Yeah. As a household?

[Hannah]

I want to say roughly 6,000.

[Jade Warshaw]

Okay. So the good news is you have that even after you pay off the debt, I mean, that still leaves you with a little over 20,000. So you could effectively say, okay, now I've got my three to six months. And then to answer your further question about like, do I invest this, what do I do that three to six months, you just keep it in a high yield savings account. It's there, like we said, it's just that fully funded emergency fund for when you need it. And then above that technically. And, and I know I'm not going to dig into this too much right now, but it sounds like after that your household is debt free. Your household has three to six months of expenses. Now you could start to invest. And the way that we'd say to do that is really just taking 15% of yalls combined income every single month and putting it towards, yeah, your 401k, your Roth IRA, that sort of thing. And it just becomes a kind of set and forget rhythm for you to invest.

[Rachel Cruz]

Yeah. And when you're talking about you didn't know much about investing, a great place to start. Katie, a Roth IRA is a great option. You and your husband both can open it up, you can both put $7,000 in and that grows tax free. And within that Roth ira, you'll invest in mutual funds. And I would sit down with a smart vestor pro to, to kind of get all this started. And then do you and your husband both have retirement benefits at work, like 401ks or a 403B?

[Hannah]

I do not. I believe he does.

[Rachel Cruz]

Okay, so, yeah, so I would, you know, use that 15% to fund two Roth IRAs. Go up to the match with his 401k. And how much do you guys, household income wise are you making a year?

[Hannah]

I'll say 60,000.

[Jade Warshaw]

Okay.

[Rachel Cruz]

Okay. Are you guys working together with your money? Are you guys have a combined checking account?

[Hannah]

How'd you know? No, we don't.

[Jade Warshaw]

I think that's something you need to work towards.

[Rachel Cruz]

What's he say about, what's he say about all this? Does he want to, does he feel out of control money wise? Is he feeling like a little bit like, oh, gosh, are we on track? Have you guys been talking about it and that's why you called? Or is this just you on your own feeling it and you don't know.

[Hannah]

Where he's at with finances? It's kind of, you earn your money, you make your money, we share the mortgage. So you just zell me the money and we're okay. With that.

[Jade Warshaw]

Okay.

[Rachel Cruz]

All right.

[Hannah]

Yeah. My money is my money. And.

[Rachel Cruz]

Yeah. How long have you guys. How long have you been married?

[Hannah]

Five years.

[Rachel Cruz]

Okay. How are you feeling about that? Do you like how that is? Or would you rather say, hey, we're a team in this, and all together, we're, like, working towards our future together with investing. And we. We know what's going on.

[Hannah]

We're okay with working together. I'm sure he'd be okay with that, too.

[Jade Warshaw]

Okay, good. I think you should work towards it. I mean, the truth is for a couple of reasons.

[John]

A.

[Jade Warshaw]

Just practically, when both people are working together to accomplish one goal, you go faster, and there's not much confusion. It's. This is what we're working towards, and we're all pushing towards that same thing. And then there's just the. The relational, spiritual side of, you're married and so you're one in all of these other areas. So. Yeah.

[Rachel Cruz]

Sorry, Jay. Does he have debt, Katie? Do you even know?

[Hannah]

Yeah. Yes.

[Rachel Cruz]

How much does he have?

[Hannah]

Too much for me to handle.

[Rachel Cruz]

Oh, okay.

[Jade Warshaw]

Interesting. So is that why you like it separate? Because his feels overwhelming to you?

[Hannah]

Yes.

[Jade Warshaw]

Okay.

[Hannah]

We don't. We really. I don't want to hear about who. That's. It's hard to say. His financial struggle.

[Rachel Cruz]

No, you're good. Katie, do you. Do you care to stay on the line? And we can. We have to go to a break right now, but I'd love to keep talking if that's okay. Do you. Are you okay if we hold you over to the next break?

[Hannah]

Yes.

[Rachel Cruz]

Okay. Thanks, Katie. Okay, Katie, you stay on the line. We have a hard break right now, but we'll be back. And unpack some more of this because I think this is a great. Yeah. To be able to help her and for you all. This is where a lot of people are in America from a financial perspective. So we'll be back.

[John]

This show is sponsored by Better Help.

[Rachel Cruz]

All right.

[Jade Warshaw]

Hey.

[John]

It's that time of year when it's getting a little colder, it's getting dark earlier, and sometimes we just want to stay inside and get cozy. For me, the perfect night at home when I'm trying to be cozy is me and my whole family under a bunch of big blood blankets, watching a TV show or reading a book, whatever your perfect night in looks like. Therapy can feel a bit like that. A time when you can settle in, get cozy, replenish your energy, and take care of yourself. Therapy is a great way to bring yourself some comfort, especially during the chaos and rush of the holiday season or any other time of year. Taking the time to pause and be mindful is one of the reasons I recommend BetterHelp. BetterHelp is 100% online therapy with licensed therapists. You can talk with your therapist just about anywhere, so it's convenient for your schedule. Just fill out a short online survey to get matched with the therapist and you can switch therapists at any time for no extra cost. Find comfort this December with BetterHelp. Visit betterhelp.com deloney to get 10% off your first month. That's BetterHelp. H E L P.

[Rachel Cruz]

Hey guys, it's Rachel Cruz. And guess what? It's my favorite time of year. The lights, the music, the decorations. I mean, I love it all. And as a natural spender like myself, it's really easy to overspend. And I want to do all the things and give my family the kind of holidays they'll always remember. And at the same time, I don't want to look back at my bank account in January and think, oh, what did I do? So that's why I use the EveryDollar budgeting app. It helps me plan for all of my spending and that's what a budget is. Then once I have my plan in place, I don't have to worry about overspending. I am free to spend guilt free and have fun doing it. Plus, with Every dollar, you can customize your budget however you want. So whether it's buying gifts, hosting dinners, or even turning your living room into a winter wonderland, every dollar helps you plan for it all. So you guys go out and create some great holiday memories with your family without the stress of overspending. Download the Every Dollar app for free today. Go download it today. Welcome back to the Ramsey Show. We have Katie on the line from Dallas from the last segment and Katie was telling US she has $47,000 saved, $24,000 in debt, which was car and credit cards. And she was wondering initially when she called in about how to invest and how to pay off debt, not just let that money sit there because she wants to make progress and as we kind of were, dig the to the numbers in her situation, kind of unpacking the relational side of money and marriage and money is so closely related. When you are married, working together with your spouse and being on the same team is a crucial part. But also we know on the other end, it's one of the leading causes of fights and tension and divorce and conflict and when you're not on the same page and when, and when you Live kind of separate lives financially. And as we were unpacking with Katie a little bit, that's what we've kind of started to discover is where they are from a relational standpoint when it comes to their money. Katie, is that a good overview? Would you change any of that or add anything?

[Hannah]

Oh, gosh. That was unexpected. Yes. You've definitely unpacked it.

[Rachel Cruz]

We unpacked it. Yeah. So before we were getting off the call, we just kind of asked, and I feel like you. It kind of struck some emotion in you of knowing that you guys don't work together, but yet he has a lot of debt. And you said it was just too much debt for you to even want to handle or to face. Is that right?

[Hannah]

Yeah, my parents, they got divorced because of money. So it's about the background. My husband, he has let some. A few credit cards go to collections recently. As soon as my daughter was born. He just. He's been underwater for what feels like a long time, probably two years already. And if I mention this, you're going to say, sell it?

[Jade Warshaw]

Well, tell us.

[Hannah]

The truck. It's the truck. He has 11,000 left on it. But it's these monthly payments of $600 that he. He wants to be free from.

[Rachel Cruz]

Okay, what other debt does he have? What's the credit cards and collections? What are. What are those amount to? Do you know?

[Hannah]

I want to say roughly, it's 7,000.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Anything else?

[Hannah]

Now you've opened my eyes. Not. No, not that I know. Maybe I need to have a discussion with them.

[Jade Warshaw]

I think so. Because don't get me wrong, I hate debt, and I don't like any amount or form of debt. But I was again expecting for you to say, like, he's got $200,000. I was expecting something way more astronomical. And when you told us, hey, yeah, he's got $18,000 of debt, I kind of just was like, okay, cool. Like, we can pay that off. And he's working, right?

[Hannah]

Yes, he is. Okay, let me dig deeper. I just. It just came in. So he has. We have this watercraft boat. It is under both of our names, but he takes financial responsibility for it. And the balance is 11,000.

[Jade Warshaw]

Okay, so there's another 11K.

[Rachel Cruz]

What else? Anything else?

[Hannah]

Aside from his truck, the car, and a few credit cards, there is nothing else.

[Jade Warshaw]

So a truck and a car.

[Hannah]

Sorry, the. The truck and the boat.

[Jade Warshaw]

Okay, truck of the boat. So we're 28,000.

[Rachel Cruz]

How much. How much is the boat worth? Do you know?

[Hannah]

No idea.

[Rachel Cruz]

Okay. Okay.

[Hannah]

We haven't looked into it. It's very precious. Okay.

[Rachel Cruz]

And does he have any money saved in his name?

[Hannah]

No.

[Rachel Cruz]

No. Okay. So. Okay, so, Katie, I think what this starts to open up and what you're feeling, and correct me if I'm wrong, but it is touching every security insecurity part of your story and in your life. Like, you've done everything you can to stock money away, even taking out credit cards and spending over here, but just knowing the safety of money has been a lifeline for you and probably coming out of a lot of pain from your parents experience. And you've done everything to safeguard yourself. Right. Against. I would say against debt. But what's funny is you've taken on some debt, right. So there is still a level of risk there, but you've padded yourself with the savings and it's kind of become your lifeline and you're gripping onto that and letting go of that is one of the scariest things for you to do. Would that be correct?

[Hannah]

Yes.

[Rachel Cruz]

Yeah. Which is very understandable, Katie. Very understandable. And so I want you to as much as you can, because with money, emotions drive so much of this. And the more logical we can get, the safer I think you're going to feel with some of these decisions. And one of the first steps I would do is sit down with him because I don't know his. I'm not on the phone with him and I can't ask him these questions. I don't know where he's at. If he is at a place, Katie, that he's like, I'm so overwhelmed. I'm so mad at myself. Right. He's probably not feeling great about himself and it's like, I want to change. I want to turn this around. That's. That's one scenario, a scenario I would have a red flag and cause you to pump the brakes a little bit on all of this. If he's like, I don't care, I don't care, Katie. I'm going to do what I want. And we get those calls too, with some guys that are like, well, he wants to buy the truck. He doesn't care. He's going to buy it. And we're, you know, we can't make the payment, but he doesn't care. Right. So like, that is a character issue. If it's that, would you say in kind of the first scenario or the second?

[Hannah]

I'm pretty sure he will call the show tomorrow.

[Rachel Cruz]

Okay, good. Yeah, but so he's more of on the fir on that first worst, you know, Scenario you would say he's all for it. Okay. Okay. So Katie, Okay, I, I just, I want to encourage you that you're, this is all good, right? Like I, I know you feel overwhelmed and we're gonna walk you through a very clear plan right now. So the first thing I want you to do is you guys together tonight. You can open a bottle of wine if you need like just sip of.

[Jade Warshaw]

Something, order a pizza, whatever you gotta.

[Rachel Cruz]

Do to relax and say, okay, together we're going to look at everything. We're getting out our pay stubs. We're going to know exactly, because when I asked you how much money you guys make a year, you said, I think around six. Like I want you to know, to the dollar, here's what we make combined, here's every debt. We're going to write it out and we're going to know everything here. And we're going to tonight shake hands and say we are now a team together. No longer are we roommates venmoing each other for the mortgage. No, screw all of that. No, we are one our income, when our income hits our new checking account that we're going to open on Monday morning, when our income hits that account together, we are working as a team. Because when you do that, Katie, not only from an emotional perspective does it create so much unity and so much of a more beautiful marriage because you see yourselves as one, which is what you do when you choose to get married, to live life with another person. You're. You're living that out on a tax tactical sense with your money. So that's such a beautiful part of it. And then together, tactically, as you start to trust each other in this, you're gonna have this cleaned up. Katie. I would sell the boat immediately. But then by Monday, you guys can take this 47, 000. And this is gonna scare you, but I would pay off all, I would keep a thousand and, and you would have, you have, I think 42, 000 if you, if you don't count the boat, because I want that sold that right. You're gonna pay off everything else. And so you're going to have $5,000 left. And you guys together are going to have a goal, I would say to save up Probably, I don't know, 26, 27,000 for an emergency fund. And you're going to, that's your next goal together, Katie, is to work to, to buff up that emergency fund. Okay. And that's going to take you guys, you know, maybe the next eight, nine months. Ten months to do all of that for that emergency fund. But together, that's going to be your goal for 20, 25. Together, doing this, getting rid of the payments. We're done with payments. And now you're gonna have your full income to be putting towards this emergency fund. What'd you say, 5,000 left?

[Hannah]

Yeah, I would have 5,000 left. So I'm paying off my two credit cards?

[Rachel Cruz]

Yes.

[Hannah]

I'm paying off my car?

[Rachel Cruz]

Yes.

[Hannah]

Selling the boat and you suggested paying off the truck.

[Rachel Cruz]

Yes.

[Hannah]

Oh, gosh, that's scary.

[Rachel Cruz]

Is it scary because of what's going to be left, the 5,000 or it's scary that you're paying off his debt?

[Hannah]

That's great.

[Jade Warshaw]

You know what might make it less scary? If I were you, I'd calculate up all the monthly payments. I'd calculate what you're paying in car payments, what you're paying in credit card payments, what he's paying in credit card payments, what he's paying in boat payments and what you're paying in truck payments. Add up all that money and when you see that, that you're going to have that back every single month, I think that's going to make you feel less scared because that's a lot. That's a hefty chunk.

[Rachel Cruz]

You have a lot of your income, Katie leaving and a lot of it's going to be coming back to you and you'll be able to build this emergency fund up back very, very quickly and then be on that. You can start investing. Hold on, stay on the line, Katie And Emily's going to pick up and we're going to put you guys through Financial Peace University. It's our nine lesson course and give you every dollar premium. So when you guys start looking at numbers today, you can start building out your first budget. Thanks for the call, Katie. We're cheering you guys on.

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[Rachel Cruz]

All right, Christmas is almost here. And if you are still buying gifts, gifts for people on your list, buy them a gift that actually will create change. Kind of a positive gift that they can use beyond Christmas. And we have almost 30% off some of our best selling products in the Ramsey store. If you go to Ramsey Solutions.com store, you can check it out there. The total Money makeover. Building a non Anxious Life, Breaking Free from broke. All of these best selling books are 30% off. And also the questions for humans deck are just cost $12. And that's the couples friends and parents and kids editions. So there's a, a lot there you guys. @ramsay solutions.com Store the Christmas deals are ending soon because Christmas is right around the corner. So again, give a gift that can create some change in people's lives that, that you love. All right, we're gonna go to John in Midland, Texas. Hey John, welcome to the show.

[Advertisement Speaker]

Hi guys.

[Austin]

Thanks for taking my call.

[Rachel Cruz]

Absolutely. How can we help?

[Austin]

Well, so I'm an hourly employee and I have an irregular income. And so I've really kind of been struggling with a budget in the past. And I found out the other day that with my employer I can set my paycheck to go into different accounts. So would it be a bad idea to basically set up to where I'm like a salary employee, like I have $2,000 or whatever, every paycheck go into like my, my working account, my daily account, and then everything extra goes into like a high yield for a house or do you have any other advice for something like that?

[Jade Warshaw]

So in essence you're saying you don't need all of the money that you're being paid and so you want to throw it towards another goal. That's really the question. It's not really the difficulty of budgeting it, right?

[Austin]

Yes, I guess whenever I just look at my whole paycheck with it being different month to month, I don't know why it just doesn't click with like, okay, I have this random amount of money left over. And so I guess that's kind of what I'm trying to overcome.

[Jade Warshaw]

Okay, so just again to clarify, are you having trouble budgeting like, are you, are you ever finding that you don't have enough money?

[Austin]

No.

[Jade Warshaw]

Okay, cool.

[Austin]

I live very frugally.

[Jade Warshaw]

I love that. Essentially you're saying I'm budget, I'm. I have enough money for the line items in my budget, but I have an overage. And for you, the overage, you feel like you're at the point that you want to save for a down payment.

[Austin]

Yes.

[Jade Warshaw]

And so then at that point for, for Rachel and I to decipher is whether you're at that point financially, if that is really the best move for you or not. Okay, so our first questions would be, do you have any debt?

[Austin]

No, I actually paid off all my debt in September.

[Jade Warshaw]

Okay.

[Austin]

So I'm completely debt free.

[Jade Warshaw]

Cool.

[Austin]

I make about $100,000 a year.

[Jade Warshaw]

Okay.

[Austin]

Part of paying off my debt was I got a large settlement from my previous employer for a sale. So I have about 60,000 of that left over in savings. Some of that is going to be taxes, though.

[Jade Warshaw]

Okay.

[Austin]

And then, you know, I'm contributing right now 10% to retirement because I am trying to save for a house.

[Jade Warshaw]

Okay.

[Austin]

So that's kind of where I'm at.

[Jade Warshaw]

Okay. So the 60%, the 60,000 you got, you know, you set the taxes aside, that's fine. What portion of that would you consider a three to six month emergency fund?

[Nick]

Probably.

[Austin]

I mean, really, probably 15 would be generous.

[Jade Warshaw]

Okay.

[Austin]

So I mean, that'd be more towards 6,000 or six months. I mean.

[Jade Warshaw]

Okay, so I'd set aside what you would consider six months of expenses, and that's kind of separate. And then aside from that, yeah, you could consider the rest. This is my working pile of debt payment money. And then for you, and just to clarify for anybody listening, so technically you're on baby step three B and step four. And what you're doing is totally fine. If you say I'm not ready to go all in on 15% investing, like we'd say because you're saving for a down payment, that's totally fine. How long do you think it'll take you to save up the down payment that you want?

[Austin]

Well, I'm just trying to save up big, I guess. I know that in August I'll be getting a retention bonus as well.

[Jade Warshaw]

Okay.

[Austin]

So that should be about half a year salary. So between that and then another fifteen hundred dollars a month or so going into savings, I would assume by the end of next year I will be in a comfortable spot to do, you know, 30 or 40% down on a home.

[Jade Warshaw]

Okay, great. I love that plan. I think that that sounds wonderful. The only thing that I would caution you about, and this is something that you, I, if I were in your shoes, I'd work it into the plan. Now, when you have that house, like once you buy the house, your expenses are going to go up, is my guess right? I don't know what your, what you're doing now. Are you renting?

[Austin]

I am. I am renting right now.

[Jade Warshaw]

Okay, so calculate. Okay. Is my payment going to go up or down? Does that affect my emergency fund? Does that affect what I would need to make things sustainable over three to six months? Do you see what I'm saying?

[Austin]

Okay, yes. Yes, ma'am.

[Jade Warshaw]

And that's, that's basically it. Congrats.

[Rachel Cruz]

Yeah, I mean, you've done a fabulous job, John. I mean, it's incredible. I mean, yeah, I think that that's exactly right. And if you want to make it easy and make it that automatic transfer to a money market account or a high yield savings account to save for that down payment, I would say yeah, absolutely. You know, there's always, you know, I, I don't feel this with you. That's why I just want to say it out loud, though. There is something. When you're starting something new, you all that are listening and watching and you're starting to build new habits. I do think being as hands on as possible and going through the motions is really important. And so some people just want to automate it their whole life and be like, oh, I don't want to have to like, feel anything. It's just going to happen. There is something about stepping in and saying, no, no, no, I'm going to transfer the money myself. So I'm practicing and seeing this happen. And there's something about taking control and this discipline over your actions, which is a big part of winning with money long term. But John, I think you, you have some of these disciplines already in place. It's not like you're trying to change something big from your habits. It's more of a tactical change. And so doing something automatic at that point, I think is great.

[Jade Warshaw]

Right?

[Rachel Cruz]

When you can, and when you have stuff that just automatically comes out because, you know, yeah, we're paying for electricity or we're paying for cable, like, and it's just coming and it's making my life easier in that way. That's a benefit for sure. And that would be the same with savings. So if you do want to create an automatic, you know, transfer and, and knowing that that high yield savings you can get to that Money for some reason. Right. If you lose the job or like, whatever it is, you know, you can get to that money. But. Yeah, but that's great. John, how old are you?

[Austin]

I'm 25.

[Jade Warshaw]

Okay, way to go.

[Rachel Cruz]

And what do you do for a living?

[Austin]

I'm a lease manager. I work for an oil and gas company out here.

[Rachel Cruz]

Okay. Okay. That's great. I know it's always encouraging. Talk to people in their. When they're young and in their 20s and you're making. Yeah. I mean, incredible money doing it, so. And handling it really well. So that's incredible. John, Good luck to you. I think that that's. Yeah, that's amazing.

[Jade Warshaw]

Way to go. I liked what you said about the automating, because I think that's.

[Rachel Cruz]

Yes.

[Jade Warshaw]

Very, very important.

[Rachel Cruz]

Yes, for sure. All right, let's see. We got. Oh, this is a fun Instagram handle. Okay, you ready for this?

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Jacuzzi 101.

[Jade Warshaw]

Okay. You like a good time?

[Rachel Cruz]

At what point should my adults. Children's finances be none of my business?

[Jade Warshaw]

Oh, I'm gonna go with that. The point. They're adults, so probably now, since they're adult children.

[Rachel Cruz]

Yeah.

[Jade Warshaw]

I mean, let's think about this. If they're in your home, like if you have adult children that live in your home, I would say that it's some of your business because they're still in your living space. Right. But if they don't live with you, if they are out on their own and in their life or in their marriage, I'd say that it's none of your business. Unless they ask for your help.

[Rachel Cruz]

That's right. Yeah. This is always a. A tricky one because you hear parents still wanting to be involved in their kids decision making and probably some of it out of a good heart.

[Jade Warshaw]

Right.

[Rachel Cruz]

Of course, seeing kids maybe making mistakes or making decisions that you wouldn't make and you want to still be the parent in that way and intervene. But I feel like the. The more life I've lived, Jade, the more successful relationships I see with parents and adult children happen when they start to become more peers.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

Right. When you step into adulthood and your parents actually see you as a fellow adult and they're still not trying to parent you or lecture you and they see you as a peer. Usually from the people that I've seen in my life that have great relationships with their parents, it's because of that there's kind of this mutual respect. And the ones where there's usually tension when it's like, oh, God, my dad's still telling me how to load the truck or my dad, you know what I mean? Or my mom is still critiquing this or that or like, you know, whatever it is. That's usually relationally when there's some. Some tension. So I'd say none of your business.

[Jade Warshaw]

Yeah, but it goes both ways because a lot of times kids try to get into the parents.

[Rachel Cruz]

That's so true. Yes, that's so true.

[Jade Warshaw]

I don't like the way my mom and dad handle their money. You know, I mean, people call in with that all the time, so.

[Rachel Cruz]

And if they don't ask, not much you can do to change other people. You really can't. Really can't. Well, thanks to all the guys in the booth for making this a great. Our Jade. Thank you. As always being a great co host. Thanks to everyone out in the lobby at Ramsey Solutions and thank you, America. We'll see you on the Ramsey Network app, podcast, and YouTube. Make sure you guys download the app. So we'll see you next.

[John]

What up? What up? It's Dr. John DeLoney from the Dr. John DeLoney show with some amazing news. The latest episode of United States of Anxiety is available right now exclusively on the Ramsey Network app. This docu series follows real people from my show as they embark on a 90 day journey to transform their lives. And I personally walk alongside them every step of the way. Okay, now here's a sneak peek of what the new episode is all about. And don't forget to click the link in the show notes to download the app. What's up, Kelsey?

[Hannah]

So I've lived with crippling anxiety for.

[Jade Warshaw]

As long as I can remember. How do I stop it from constantly.

[Rachel Cruz]

Coming up in different areas of my life?

[John]

What does crippling anxiety mean? Paint me a picture of that. All right, so you ready to jump in?

[Hannah]

I'm ready to jump in.

[John]

We're gonna check in with Kelsey. 30 days, 60 days, 90 days.

[Jade Warshaw]

I cannot even function because I am just crying. My mom left us when I was 4. I truly felt like for a while.

[Rachel Cruz]

I had no family.

[John]

She's experiencing things. Things that really hurt a long time ago. Tell me about this boy.

[Austin]

He triggers me a lot.

[Jade Warshaw]

Scared of losing Paul. Scared of doing the wrong thing. Scared of not being enough.

[John]

It just feels like it would be exhausting to be Kelsey.

[Rachel Cruz]

It is.

[John]

Whenever somebody's playing whack a mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay.

[Jade Warshaw]

How do I get my inner child out of this relationship? Because I feel like she's running the show.

[Rachel Cruz]

1.

[John]

One of two people that's supposed to never leave took off.

[Jade Warshaw]

How is this. How is this burden?

[John]

Your burden. That's right. To the one person who should carry all of it. Did you ever tell that little girl that it wasn't her fault?

[Hannah]

I don't know what to do.

[John]

You either have to choose to let this guy love you, or you gotta choose to let this guy go.