The Borrower Is Always Slave to the Lender
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Welcome to the Ramsey Show where we help you win in your life. We want to help you win with your money. We want you to win in your work and we want you to win in your relationships. The phone number for you to jump in so we can coach you up today is 888-825-5225. 888-825-5225.

5-2-2-5. Alongside the really preppy, I mean, she's rocking an early 90s vibe today, and I'm here for it. Little West Philadelphia born and raised. Come on.

Come on. Okay, I see what you did there. She is the one, the only, the incomparable, my good friend, Jade Warshaw. And I'm just trying to hold up my side of this desk here today. I'm Ken Coleman, and I'm going to guide you through the next three hours. And we're here together to help you. Jade's going to lead out on...

What do we do with that money, the budget, and get rid of debt? And I'll help out on how to make some more income, and we'll weigh in together. You ready to go, partner? Let's go. Giddy up. All right. Nicole starts us off in Cleveland, Ohio. Nicole, how can we help today?

Hi, Jaden, kid. Thanks for having me on. I have a situation where I received a little bit of money from a car accident settlement. And at the time, my girlfriend was helping me out. She's a lifelong friend, graduate class of 91, Willoughby South High School. All right. Shout out.

I had given her, um, she had asked me if she could borrow some money upon receiving it. And she had been such a big help. And I said, on one condition, we went and we wrote it up and we got it notarized. Um, and everything, you know, our agreement between ourselves. And so, um, she had a copy. I had a copy, um, right away. She defaulted on it due to, um, uh, losing a couple of cleaning accounts. And, um, so, um,

I tried to establish some other kind of understanding of how I was going to get my money back. Well, it started to become an issue. And then the less, you know, return calls. Anyways, long story short, the last interact, this happened on September of 2023. And it was a sum of $3,000. I had gotten approximately 290 of it back, which was fantastic.

from very small increments over cash app from her in this last 12 months, 13 months, I should say at this point. Anyways, we had a falling out at the end of August, two months ago. Over the money? The falling out was over the money? Yes. Okay. Yes. And I knew she had had some health issues. Well, it

it came to my attention on October 5th that, um, on September 1st, two months ago that she had passed away. Oh, shoot. So sorry. And, um,

Thank you. I'm sorry also to her and her family and everybody involved. She will be greatly missed. But besides the point, you never know when it's the last time there was terrible things said, but we go back so far that I know that people say things when they're upset. Anyways, it wasn't a good conversation, and I am just wondering what my options would be to go forward. I know that she was a business owner. Go forward with what?

Well, does the debt go away with her? Or she does have a property. I do believe that her mother's on it with her. But she was the one that was residing in the home. Do I have any legal footing to try to obtain the balance of this loan that her and I

had legally written up and agreed to? Or would it just lie within a lien on this property? Nicole, I got to be honest with you. I'm struggling with this one. Me too. Thank you. I'm struggling. I hate that your friend passed. I hate that it happened on bad terms. I hate that you had words. She did owe you money. And Ken, feel free to knock me back

to my senses on this, but... Well, first of all, I got to know what you're saying first. I think you and I are on the same wavelength is my guess. I think that if... I'm going to just talk from Jade. Go for it. I feel like if a buddy of mine that I was really close with and we fell out over $3,000 at this point, $2,700...

and it caused us to fall out, the last words that I said to her were ugly and vice versa about this money, that would be my biggest sign that I need to let it go. I'm with you. I need to let it go, and it's caused enough heartache and pain. That's just me. Nicole, I would just say very quickly, we are sorry, very sorry for your loss, but I will tell you,

Our studio audience, those that are watching us on YouTube, the cringe factor for Jade and I was equal and very high. And I do not say that flippantly. I'm not saying that to insult you. I'm saying that we're completely objective people and you called and I will tell you, I cringed. My face cringed and so did Jade. And I couldn't agree with Jade more. I think this is, first of all, I'll just give you my best. I'm not a lawyer. Uh-huh.

So number one, it doesn't feel right. I agree with Jade. She said it perfectly. I endorse everything she just said. But my guess is that you don't have any legal standing either.

And I don't even think you should pursue this. I think you need to let this go. But I don't think you have any legal standing in this situation. And the time and money it would take to try to play this out with her estate, you're going to end up spending way more than $3,000. So the studio audience is nodding their head. And here's what I think. I think that's right. Nicole, to your point,

credit, let me say it like this. What this is telling me is that you're not a bad person. You're not nothing like that. We're not trying to be ugly towards you. What I think is that you're in a tough financial situation. And what I know from personal experience is when you're in a tough financial experience, it clouds your judgment.

And I think that that's part of what's going on. And my guess is that if everything was on the up and up for you financially and you felt more comfortable in your financial setting, this would have been a no thing but a chicken wing to you. Is that true, Nicole? Yes, sir. Yes. Yeah. She's spot on. Let's help you there. How can we help you there? We've got a couple minutes. How can we help you? What's your financial situation? Give us the super quick rundown. Oh.

Well, she knew what my situation was. I had just recently received a moratorium from over the whole COVID situation with my home. I'm a single white female. I have nobody. I lost over 27 people since COVID all hit. Oh, my gosh. So I'm on my own. I'm on full disability. I was...

she knew that that money was going to go towards getting my mortgage back on track. Is it back on track yet? Did you get the mortgage back on track? No, I'm probably going to have to forfeit, you

you know, situation, which is okay because I've already said it out loud. Um, and, and, um, when you say cringe, I just want to be clear because you said no insult, you know, which is not supposed to be. And, um, I did originally went,

looking around to see what was out there, even to even research any options I would have. And I came across the Ramsey show. Yeah. And as I was listening to that particular episode or whatnot, I heard a similar situation. It was there wasn't nobody who passed away. But yeah, Mr. Ramsey mentioned that, you know, when you

loan money to somebody and it's especially, you know, it's a personal relationship that... It changes things. Nicole, I hate to do this to you. We are running up against a commercial break, but I want you to hang on the line. Kelly, I would like to gift her...

session with one of our financial coaches. She's in a really tough spot and they can really help you see what all your options are. So, Nicole, hang on the line. We'll take care of that for you as our gift. Hang in there. Better days are ahead. We'll be right back. My wife, Sharon, is a major health fanatic. So,

So I was excited to tell her that we're partnering with Field of Greens, a fruit and vegetable super drink. Each fruit and vegetable in Field of Greens was doctor-selected to support your heart, liver, kidneys, and metabolism for healthy weight. And we love that Field of Greens comes with a better health money-back promise. Get 15% off at fieldofgreens.com slash Ramsey with the promo code Ramsey. That's fieldofgreens.com slash Ramsey.

888-825-5225 is the phone number to jump in here on the Ramsey Show. We want to coach you up so that you're winning in your money and in your work.

and in your relationships. All three of those areas are interconnected. If you're losing in one of them, it's dragging the others down, and that's why we have that focus. I'm Ken Coleman. Jade Warshaw is in studio as well, and we're going to help you out. But first, we've got to tell you about this. Boy, we're excited. COVID knocked out the first Ramsey Cruise, and it's back. And we are getting closer and closer to sellout. And if you haven't heard about it,

or you've kind of heard it in passing, this is your reminder. It's called the Live Like No One Else Cruise, setting sail March 22 through 29. It's a premium Caribbean cruise. We're hitting all the spots, Turks and Caicos, Puerto Rico, St. Thomas, and the Bahamas on Holland America's new Staten Dom ship. I had to say it that way. It's the way it's written. I don't know if that's...

how it's pronounced. All-inclusive restaurants are great. Great content, including all of the Ramsey personalities. Dave, John, Jade, Rachel, George, I think me. Am I the last one to mention in the list? Yeah, you're in there. Yeah, I'm trying to be, you know, first will be last, last will be first. Okay. Some of that going on. And it's going to be a lot of fun. You're going to do your magic act?

If I had any magic tricks, I'd do it. But I am going to be holding court at the pickleball court. I'm a big pickleball player. So if we got any pickleballers on the cruise, it's going to be fun. Love that. A little physical activity. I'm going to get you out there. Yes. Because we've played a few times.

with friends and couples. And, you know, I think we'll get Sam out there as well. If there's basketball courts, we should do a basketball tournament. People don't realize that Jade has game. And so, yeah. Yeah. We could do a couple two-on-two, three-on-three tournaments. That'll be fun. So move right now because it's going to sell out. RamseySolutions.com slash cruise. RamseySolutions.com slash cruise. I'm just curious. We have an awesome studio audience today. Just a fabulous group of people out there. Anybody out there going on the cruise?

Oh, there's one in the back. No, it's a student. Oh. Yeah. I don't know. I don't know if he's going or not. He may be messing with us. I met someone a couple of days ago. I did too. Who was on the cruise. Yeah, I said, we'll see you on the cruise and all that kind of jazz. There's one guy on the front row who gave us a, I don't know, maybe he's got to make some moves. Are you thinking, listen, we're 90% full. It's now or never. Yeah. We'll talk to you about it on the next break. That's right. Okay. We've got a couple of brochures. It's going to be great. All right. To the phones we go. Stephanie is in Phoenix, Arizona. Stephanie, how can we help today?

Hi, thank you so much for taking my call. My husband and I recently decided to kind of take our debt seriously and crawl out of all this mess. And so my question specifically is around student loans. Currently, I have 10 different student loans. I never refinanced them once I completed their degree or consolidated them. So I've kind of left them as is. They all have variable interest rates and I just make one month payment. So the question is, is consolidating these loans

a good idea or should I just do the snowball method and just kind of knock them out as I go? They're variable. Are they private? They're all federal, but they all have a different interest rate, which is what I mean by variable. Oh, okay. They all have a fixed interest rate. They're just, they all have different interest rates. Okay, cool. How much is it total? $75,831.55. Okay. And just real quick, what's your income combined?

My husband and I make around $200,000 a year combined. Okay, great. And this is the only debt? We also have about $20,000. Well, I mostly have the $20,000 in credit card debt. And then we do own a home. Okay, but besides the credit cards and the student loans, no other consumer debt?

And now all our vehicles are paid off. Okay, great. No private loans or anything like that. Okay. So to answer your first question, I would not consolidate these. I know all the interest rates are different, but you kind of have the perfect situation for a debt snowball because the purpose of the debt snowball is you list them smallest to largest and

And then you make minimum payments on everything, which in this case, since they're federal student loans, you can make the minimum payments quite small. Right. And then you can put all of your surplus money, all of your extra margin to the smallest debt and knock it out really fast.

And when you can do that, you start seeing it's like it's like when you make a checklist and you get to check it off your list, you feel so good on the inside. This is that times like a thousand. So what's your smallest of the big chunk of them? What's the smallest one?

It's actually pretty small. It's only $1,689. But then my largest goes up to $16,000. Okay. I know that this sounds wacky because I'm saying I love this and we're talking about debt. But this is about as good as it gets if we're talking about feeling the impact of the progress that you're making over time. So the smallest one is $1,689. What about the credit cards? Is there anything that would go before it on the list?

That's smaller? Yeah, well, kind of. I was planning on paying all the credit cards off first before I tackled this just because the credit cards have an interest rate of like 34%. But yeah, I have a couple credit cards that only have a couple hundred dollars on it that will be paid off in the next month. Okay, so I could understand your idea of wanting to tackle the interest first. That would be an avalanche method as you look at the interest rate. But the truth of this is, Stephanie, when we have...

done the research on who actually completes the task of paying off their debt, it falls with the people who do the snowball method.

because it's psychological at that point. They feel, you know, you get the dopamine hit, you're like, I can keep going and you keep going. And so for that reason, this is one of the few times we talk a lot about math and numbers, Ken. This is one of the few times that it's not necessarily a mathematical equation. It's more about you feeling motivated and you continuing to the end. So if I were you, I'd list all of the debt, all 10 student loans,

plus the credit cards in order from smallest to largest. Like I said, if you were to consolidate those student loans, it would be one giant payment. And when it's one giant payment, yes, you'd have one interest rate. But the feeling of having to attack a $75,000, trust me, I've done it before and it is not fun.

It's better to be like, okay, first I do 16,000 and then I do 2,100 and then I do three, like that helps you mentally. So I would not consolidate in this case. Yeah, I stand by that.

I approve this message. I love it. I'm Jade Warshaw and I approve this message. That's good. Yeah, Stephanie, I agree. This is all about momentum. It's all about psychology. You know, whether it's trying to lose weight, start working out, putting on muscle, developing a new skill, you know, knocking out a large term paper or some type of research project, the bigger that it is, the more intimidating it

It is. And you've got to just put it into bite sizes. And so I couldn't agree with Jade anymore. You'll get this. You'll get there. You really will. Yeah, we consolidated loans. Stephanie, my husband and I had 280,000 of student loans. And some of them we consolidated because we thought, oh, I'm going to get the lower interest rate. And let me tell you something that I wished I hadn't done that. I wish that I had kept them in smaller pieces so that we could have felt. Let's get the real, real. Take us back.

Take me back? Yeah, take us back. What are some real raw thoughts you had? Real raw thoughts are, and you have to guard against this, when you start getting towards the end, especially with student loans, our last loan that we paid off was about $91,000. And we were able to get them to take some of the interest off, so it dropped down to $71,000. But at that point, the payment was low.

And it was like, well, why should I? I can't remember what it is. I think it was like $200 or $200 something a month. And it was like, why would I pay off $71,000 for a $200 payment? And so you have to remind yourself what the bigger goal is. That's real though. Yeah, it is real. By the way, that right there, if you would allow that to stay in your head.

That makes a lot of sense. It does. It does. Now, the other side of that, which may not be the case for some people, but we did know that the payment plan we were on could expire. And if it expired, the payment would be $900 a month. But just letting you know, with the way these federal income plans are, if you go on the save plan, yeah, depending on what she makes, $200,000 a year. Yeah. Those student loans could probably be very, very cheap. Yeah.

And so don't get lured to sleep by that. That's right. I always kept it in the, I'm in the extended repayment plan. I'm going to pay him till I die kind of plan. And the payment isn't, you know, it's $500 a month. Yeah. You know, it's not bad when I have, you know, everything else is manageable. So, yeah. Okay. Okay.

But then all you have to do in those moments, Ken and Stephanie, is do the math on the opportunity cost. What $500, you know, $569, what that is might not feel it in your budget. But if you start thinking about what it would be invested over time, then you see the true cost. So true. Man, it's not about the math.

It ain't about the money, money, money. There it is. She sang yesterday and she's already singing today. Can you do something to me? Listen, you never know where this is going to go. Maybe a duet. Don't hold your breath. This is The Ramsey Show.

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The Ramsey Show continues from our Nashville headquarters. Thrilled to have you with us, 888-825-5225 is the phone number. Jade Warshaw is alongside. I'm Ken Coleman, and we're here for you. Let's go to Fredericksburg, Virginia now, and Tiffany. Tiffany, how can we help today?

Hi, Ken. Hi, Jade. Thank you so much for taking my call. You bet. So my question, so I'm mentally exhausted. I feel like every time I take one step forward, I take like four steps back. So I have a 2011 GMC Terrain that's becoming a lemon. I only owe $800 on it, but the repairs are like,

almost $1,000. And that's how much it's worth. When I look it up on Kelly Blue Book, it has a lot of cosmetic defects. So I know I won't get much for it. It's worth $1,000?

Yeah, it's worth about $1,000 on Kelly Blue Book. And it has dings and dents on it, you know, makes strange noises. And I just know, like, I'm trying to figure out, should I just keep putting money in it? No. Or should I get a new car? Yeah, I mean, you just laid out the math for us. You owe $800. It's going to cost $1,000. So at the very least, you'd be putting $1,800 more into this vehicle, but it's only worth $1,000.

So that math doesn't math for me at this point. What do you have saved?

I don't have anything saved. Nothing at all. I have $20 in my account right now. And the car is at the mechanic right now. And they're still assessing what the issue is. It just keeps shutting off. So I don't have anything for a new car. I've been there with $20 in my account. I've been there with 20 cents in my account. So understand who you're talking to. And I know how you feel. What's your income a month?

I make about $4,000 a month. Um, and maybe a bit more with overtime, but it's about 4,000. Is it just you or husband, kids, spouse? Um, I do have kids. Um, I have three kids. Um, don't chew me out, Jade, but I do live with my boyfriend and he makes about the same that I make a month, about 4,000. Okay. You guys share your money?

Or share the expenses? So we share the expenses. We do everything half, but as far as our own debts and things, we're just trying to tackle them separately. Okay, good. Let's see. Okay, now I got to jump in on this one. Yeah, jump in, Ken. Because they're sharing expenses, which we're not fans of. Yes. But in this situation, he knows how desperate you are with his car, correct? I hope that he would step in. Has he offered? You know where I'm going, Jade. Is he... I mean...

You need help. Yes, so he has offered the plan, and we spoke about it today. He wants us both to save up to get one vehicle because he has a company car, but we can't use that for everyday getting around with the kids. So he's offered, like, hey, let's come up with a plan and save up half this amount and half this amount, and let's just get one family vehicle.

Well, I'll step out of that one, but I mean, I'm trying to figure out this interim situation. I'm guessing he's helping you get to work.

How are you functioning so that we keep our job and can take care of things while we're figuring out what we're going to do to get another car? What's the plan? He's an HVAC tech, so he only has a company van. That's the only thing that he has. He cannot use it for personal. He can't take you around. Got it. So how are you getting to work?

So I've been speaking with my supervisor and he said it's okay for right now for me to work from home. I'm a housing coordinator for a nonprofit. So he said for right now, it's okay that I work from home. So that's what I've been doing. Okay. What's it cost for the, what's it cost bare bones for the house to function? I know you got, you bring 4,000, he brings 4,000, but what are the household bills as a whole? So the rent is 2,400. Okay. Um,

Utilities probably are about $300. Okay. And then we spend about $400 on groceries. We're trying to figure that out. Okay. But that's what we do for groceries. $400 a month for all those people? Y'all are on the frugal, frugal, frugal McFrugal. Holy moly. Here's what I would suggest because there's part of this that...

I mean, we can get into this later on if you want, but there's part of this that, yeah, it's not a great situation how you guys are combining. It's a little confusing. However, what I'd be saying is, hey, I want to use my money to replace my vehicle. You make enough to cover the living expenses for this month. We both live here. Why don't you cover that? And I'll take care of me getting my vehicle. That way, if somehow, if this ever pops up again,

If for some reason down the line, things don't go the way we all are hoping they go, you know the vehicle is yours and you bought it and you paid for it, if that makes sense. So I would take, I would ask my boss, I'd say, can I have, I need six weeks because I need to save up for a new vehicle and I need $6,000 to do that.

And I would get myself in a $6,000 vehicle. And then as part of your budget, I would be having a line item there that I can upgrade over time because I'm not going to stay in a 6,000 vehicle for vehicle for long. My goal is going to be to get to a 10,000 as quickly as possible. The good news is if you buy yourself a $6,000 vehicle in the next,

Six or seven months, it won't have gone down in value much by the time you trade it back in. So you're trading up slowly and incrementally. That's how this works. And my goal would be, like I said, for you to kind of get into a $10,000 vehicle that you can kind of coast in for a while while you clean up whatever other mess that you have going on.

So how would I do that? Because I'm only paid on the 31st and the 15th of every month. And my minimums alone on all of my debt are $1,500. $1,500. So that means instead of having 4,000, like I thought, what are you going to have? 2,500? Yeah.

Maybe a thousand, a thousand dollars. If that is probably even lower a month. Where's the other money going? Because remember, the plan is to tell your boyfriend, hey, you got to cover. You got to like I'm not paying. I can't pay my half of the rent. You got it. You got to cover that so I can get this car because you told me that you guys spend about thirty one hundred dollars.

that's about the bare bones budget to make things work so he should be able to cover that and then you you're going to have to cut back everything and you know and may I say you're going to have to get another job you're working for a non-profit which I think is fine it's lovely but non-profits are usually capped in the amount of income and I love that your boss is giving you a little bit of leniency here you're working from home but that's during the day um boyfriend if he's in it

If he's in it to win it, he'll watch the kids at night. So you can go out and hustle. And you've got to work maybe for two, three, four, five, six months. I mean, I know, Tiffany, what I'm describing here doesn't sound fun, but you've got to increase your income because of the very thing you just brought up. You've got to make a lot more extra income to get to the car. And I'm just messing around here. I went to a well-known used car site here, and you're somewhere near Fredericksburg, I'm guessing? Yeah.

Yes. All right. I'm seeing a 2014 Nissan Sentra, 112,000 miles, $42,995. You roll up with $3,500 in cash and tell me your situation, you're driving it off the lot. I'm just giving you one example. Yeah, there's cars out there for cheaper than what I said. Yeah, and again, we got to check that and all the things, but I wanted to give you a dose of reality. You have got to have another job, if not two extra jobs right now. Yes.

Boyfriend's got to step up. Yes. We're playing house right now, and it's time. Life is real. And here's what I want to say. Because Ken's hitting on something. I want to say this, Tiffany, and this may not be you, and it's probably not you, but it's worth saying for the listening audience. Are the kids, you guys, is together, or did they come from your side or his side? Together. They're yours together. Oh, all of them?

What are we doing here? Y'all got to get married. Get to the courthouse tonight. Get to that chapel. Protect yourself is all I'm saying. This is a protection for you. This dude needs to step up. What are we doing? But what I wanted to say, and this is not necessarily Tiffany, but here's the thing. If you're in a situation, you're living with someone, especially, I can only speak from the female side, especially if you're a female, you're living with someone, there's kids involved. Maybe they're your kids. Maybe they're yours together.

If you can't and you're not married, if you can't afford to make the household run on your own, it sets you up to feel like you have that you're stuck there. That's all I'm saying. And some people will stay in a relationship that's not necessarily good for them. Not you, Tiffany, not you. Some people will stay in a relationship that's not necessarily good for them because they need the comfort and the support of the finance.

And so I hate to see that. This is not Tiffany. I'm not talking about her. But it reminded me of so many of the calls that we get. And this is why you got to be careful about getting in those living arrangements because it can make you sit back on your haunches financially. Thanks for the call, Tiffany. We'll be back. This is The Ramsey Show.

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Welcome back to The Ramsey Show. We're here to help you win with your money, win in your work, and win in your relationships. 888-825-5225. 888-825-5225. Thrilled to have you with us. I'm Ken Coleman, and Jade Warshaw is alongside. All right, so what do we got here? We got a Ramsey Network app question. Is that right? Yeah.

Now, is this audio, James, or am I reading this question? Just reading this one. Okay. I'm sorry, folks. I didn't do my production notes, and I thought, I'm not going to try to fake my way through it. I'm just going to ask my erstwhile captain in there. And sometimes we listen to these, sometimes I read them, and I didn't pay attention to my notes.

Kids, this is why you study before you take the test. All right? All right, today's Ramsey Network app question. By the way, the network app, I just want to say this very briefly. This is fantastic stuff. We'll remind you later in the show, but we have just exclusive content over there that only people who have the app, and you can get it in the App Store or Google Play, can listen. It's just a part of the show that no one else can get. We'll remind you about that later, but fantastic app and a lot of great content over there. So this question is from Jane.

She asked, after many stops and starts in college and throughout my career, I realized I'm passionate about filmmaking, in particular helping to fight and advocate for people who don't have a voice. I've since learned that it's hard to make money in this profession. Can you give me some advice on some things that I can do where I can actually earn a living? Oh, my, my. Wow. That's an open-ended question there. Well, here's the quick advice is you need to find work.

different types of gigs in many different lanes that all have one thing in common, that allow you to use what you do best, that's your skill, to do work that you really, really enjoy that produces a result that matters. So you say you're passionate about filmmaking. Okay, we love the artistic filmmaking. And then you add in the specifics of the results that you want to produce from filmmaking ideally would be to fight racism

bad things to advocate for people who don't have a voice. So there is an activist, an advocating type of film or art that you want to put out. So for instance, this could be documentary filmmaking. Obviously we see a lot of this. Yeah. And so someone has told you, or you have listened, or you have started the process of trying to get into filmmaking and what you've discovered and what she's discovered, Jade, is this thing called a ladder.

Yeah. And on the lower rungs of the ladder, Jade, we don't make a whole lot of money. Peanuts. Sometimes. Yeah.

And so if I might, could I go back into the Wayback Machine? Wayback. Take us way back, back in time. I'm 31, 32 and realize that I really want to go into broadcasting, but I do not have a degree in broadcasting. I had no experience in broadcasting. I just had what I thought was the gift of gab. But I mean, hadn't tested it. Yeah. I have three little kids. You know my kids. I do. They were littles.

And that means I got to provide and fabulous wife and a puppy and the whole nine yards in the house. And, and so, um, the reality was, is I began to do the work like Jane had to discover, okay, what does it look like to work in the film industry? What does it look like to work in broadcasting? And what I found out pretty quickly was on those rower lungs of, of, of lower rungs rather of the ladder, uh,

It wasn't going to feed the family. Yeah. So what I did is what my advice for Jane is or anybody that's listening is, is I had to have a day job that took care of business. And I was then going to have to part time, get into broadcasting, get a little experience here, get a little experience there.

And over time, step into it slowly. In other words, embrace the latter. So you got to have something else to fall back on while you're trying to get into filmmaking. So I wish that the advice was clearer. I wish it was better. It's not. If that's what you want to get into, any type of artistic form of telling stories or whatever, if you could find other causes, maybe you go work for a nonprofit.

And you actually then begin to do video work for them instead of going into the film industry and then telling stories. That's about all I can ideate on there. You want to add anything to that without having her on the phone? Yeah, I agree. I think you're right. There's a part of this you have to pay your dues. And I do think...

when it comes to the arts, when you're first starting out, there is a part of that dream that you have that you do have to generalize in the beginning because you gotta take opportunity. And it's kind of like music artists

When they first get signed, they have to, you know, the machine decides what they're going to do. It's not until they're in it for a while that they finally get to go. Now I do the songs I want to write. Now I do. I now I do it my way. And so it might be a while for her before she's doing that.

what she labeled here as helping people fight and advocate for people. Just understand it could be a while before you do it exactly the way that you want to do it, and that's okay. You know what song I'm thinking about? I don't. I did it my way. How about that? I got to sing. Yeah, my grandfather used to sing that. I love that. Yeah, there you go. James is so happy right now. Good job, Ken. Yeah, I thought it was on key. I was really impressed, actually. I thought it was on key. A little bit of a crooner kind of feel there. We're going to move on quickly. Paul in Hartford, Connecticut. Paul, how can we help?

Hello guys, how are you? Good, what's going on? So basically I'm kind of in a predicament right now. Last week we were at a family reunion and my dad came up to me and he just basically asked me to take out a loan for him of $20,000. For what? Just casually. Yeah, just casually. For what?

Um, he says he has some business going on. He didn't give me any details. I know I don't need to take the loan out. Okay. I just want to know how to basically, you know, turn him down without having any issues. Um, okay. Clearly and quickly. Hey, dad, pops, listen, thought about it for about two seconds. Uh, no, not going to do it. Love you, dad. You're awesome. Not happening. Um,

What would you add to that? I thought he was going to say, I just want to ask you guys what was wrong with him. Well, I think he's kind of wondering that too. Yeah. Listen, I'm glad that you know that you're not going to take out this loan. I think the way to do that is just simply say, Dad, I don't borrow money and so I can't help you borrow money. That was much nicer than the way I said it.

Yeah, right. No, Paul, seriously. Jade's right. I think you're respectful. Yeah, be respectful. But you're like, Dad, I don't believe in debt. And...

I can't do this. I'm so sorry. If you want to be really polite and really respectful. I just roll differently in that situation. Like if a family member, especially my dad comes to me, I'll be like, Dad, you know what my honest answer would be? This is not what I'm recommending. But I literally would have been like, if he rolled up on me at a party like that, I looked at him and went, do you have a fever?

Should you lie down? Can I get you a cold rag and a glass of water? Have you lost your ever-loving mind? That's what I would have said to my dad. Is this normal? Is this a habit that he'll kind of hit you up for some money here and there? Not me, but some other family members, yeah. Okay, because it felt so casual. I wondered if it was normal. Yeah, is it that he wants you? I'm just curious. Is it that he wants you to just fully take it out in your name, or does he want you to co-sign, or what is it?

Fully taken on my name. Oh my gosh. Yeah. That's different. Okay. Yeah. I mean, you just got to say no. And at this point,

resist making it about the details. I know I just asked details, but resist making it about like, dad, you didn't even show me a plan or you didn't even tell me what you want to do. It's not even about that. It's just, dad, I can't take out debt for you. I'm sorry. I don't think dad has a plan. I think if he'd asked for details, his dad would have told him a fish story. I just don't think there's anything there. Yeah. Paul, listen, we're having a little bit of fun with what is a really tense situation. I just think you got to take the high road.

really high road, but do not have a conversation about it. To the extent that when you tell him, you make it clear to him there is no conversation. This isn't like he gets shot at a little bit of a negotiation on this. How will he react? Honestly, I was just shocked. I didn't react at all. I was just shocked because it's a huge amount of money. How will he react? How's he going to react when you tell him no?

I'm not sure, but he's not going to be happy. Oh, you're sure? That chuckle was a chuckle of experience. Yeah, it was uncomfortable. Come on, man. Yeah.

Yeah, this is tough. Sorry, man. I hate that that happened. That's awkward. It's an awkward situation to get put in. Let me take this above Paul real quick. Give our audience 20 seconds on why they should never loan family any money as a general principle. Oh, well, what Dave Ramsey would say is it makes Thanksgiving dinner taste different. I've done it, by the way. I've borrowed money from my mother-in-law, who is a wonderful...

generous woman and it's not on her it's on you feel it no matter what it doesn't matter how great or nice they are you feel the weight don't do it there you go great hour jade warshaw thank you america for listening this is the ramsey show

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This is the Ramsey Show, where we help you win in your life. We help you win with your money, win in your work, and win in your relationships. 888-825-5225 is the phone number. 888-825-5225. Alongside Jade Warshaw, I'm Ken Coleman. Thrilled to have you with us. We're here to coach you up. We're going to start with John in Spokane, Washington. John, how can we help today? Hey, John. Hey, guys.

You're John. I'm Ken. Yeah, Ken. Yes, sir. Worked too hard to be this broke. You know, you talk winning money. I'm just hoping maybe you guys could look through my situation and figure out why I'm not winning. Okay. You broke up a little bit. So you're saying you're feeling behind financially. You worked too hard, but you're not making enough money. Is that what I'm hearing? Exactly. Okay. What kind of money are you making? What's your income?

Oh, I make about $75,000, $77,000 a year. Okay. And give us your financial picture. What kind of debt do you have? I got about $5,000 in a utility tractor and then a house payment. That's it? That's it. What's your mortgage payment? Oh, I pay about $2,300 a month. Okay. And your take-home is about what?

Well, I work, I'm a farmer, so work for a farmer, do a little farming on my own, so it's very variable, you know, seasonal. Okay, gotcha. What's a bad month and what's a good month? A bad month is probably about three grand, and a good month is probably six or seven. Yeah, so that house payment, Jade, feels like that's... That's the issue. Okay, just so I can understand, on a good month, the $7,000 a month,

What's more common, the $7,000 a month or the $3,000 a month? I got about three, four months in the wintertime that I'm in that $3,000 range. And the rest are good? $7,000 or a little bit under? Yeah, probably four to five is fairly common. Okay. Yeah. If that's what's common, four to five, then this mortgage payment is what's getting you. And that'll get you, by the way, even if you don't have debt...

Because you're virtually debt-free. You owe $5,000 on a trailer, big whoop. But in this case, because you don't have any margin, you're going to feel it. Because what's the payment on that tractor every month? That's about $575. $575. So that will free up some air for you to breathe when you pay it off. And I think you should pay it off as quickly as possible. But this mortgage...

A little bit more insight on that is my wife is running a horse boarding training facility on our property, 15 acres we got there. And she's been paying that out of her horse boarding income. She makes probably $15,000, $20,000 profit off of that a year. So there's a little bit more income there. Okay. Okay. So less than $2,000 a month? Yeah. Okay. About $17,000, $15,000 to $17,000? Yeah.

You're still somewhere between $90,000 to $100,000 combined, right? Yeah. Okay. So what I think is the issue here, are you guys combining your money or is it separate? I have my business. She has her business. And then we try to live off of my, let's say, W-2 wages. And it's combined, but it's somewhat separate in the businesses. That's fine. But is there any other debt, I guess? Like, does she have debt?

No, no debt. Okay, so it's just this $5,000 tractor. So even on a bad month, you should be bringing in somewhere between, I don't know, $4,500 a month. And that still causes this mortgage to feel it. And you're probably...

So you're probably making up for it on the good months, right? You're kind of playing catch up when you have a good month. So you never really get ahead is what it sounds like. Exactly. Well, the good months I'm saving up for kids tuition, that's about $8,200 a year. And so I try to save as much as I can. We're just...

I'm working 3,500 hours a year and we're constantly broke. I've been doing it since I was 16 and I'm just tired. I know. Here's the hard part. From where I'm sitting, I know your work is a labor of love and you've done it all these years. From where I'm sitting, it's hard for me to tell you. How old are you?

34. 34? Okay. Well, then, honestly, now it's not that much harder for me to tell you. I thought you were a little bit older. But you're going to have to switch careers. Now I'm just going to tell you. I think you're going to have to switch careers because you're either going to have to make more or you're going to have to sacrifice in this mortgage. It's one or the other. Yeah. Because eating up half your money. Yeah.

And a real quick question on that. The mortgage, is that on a larger property? Is your wife boarding the horses? That's why we've got all this big old place, so she can board the horses? Correct. It's, yeah, 15 acres. Yeah, so what could you make on that house if you sold it today? About $500,000. My man.

Talking to you real, real right now, you're exhausted. And I love that your wife wants to work with the horses. Sounds like that's a labor of love, but she can work with horses another way on somebody else's dime. But that property is eating you alive. And it's also a wonderful exit strategy. And I agree with my colleague. I think it's time for you to change the type of work you're doing. I think you can do similar work, but you need a better paying situation.

where you're not exchanging so much time for this money. And I think she's absolutely right. But I would sell the house, and now all of a sudden we're out of that, and we got $500,000. That's not chump change. It's sure not. To downsize, maybe pay cash and have no house payment at all, and you change your working situation to where you're making decent money

And you're making decent money, but it feels like the exchange, it feels like the time you're exchanging for that money is not worth it. I think that's clear. So I would make those two changes. I think Jade's absolutely right. Now, this is not for the faint of heart because you have to sit down with the wifey and say, hey, but listen, I don't. It's a new life. That would be a new life for you. It's a new life, but I still think she can be involved with horses and maybe somebody pays her and it's not an expense for you guys anymore. Does that make sense?

Yeah. You talk about changing careers, though, and this is all I know. No, no, no, no. Okay, well, let's say this. I don't know that it has to be a complete lane switch, but I think it needs to change your current situation. In other words, when you say that's all you know, how would you describe it? Give it to me in two or three words. All I know is blank kind of work. What would it be?

All I know is farming. It's what I've done since I was a teenager. Got you. And I sucked at school, so I'm not very highly educated. That's fine. Let me introduce you. I understand, but what is the number one skill, and you've got to be real quick, what's the number one skill you've developed as a result of farming? Be more specific. What is that skill?

I don't know, raising a crop. Okay, great. I would say logistics. I'd say project management. I'm going to go a little bit further. Process. I'm going to go really, really deep on this. I think that you know process and you can repeat process. I think you need to get in the trades, my friend. You need to get in the trades or you could be making high, high 90s, six figures, electrician, plumber, HVAC. It's all process work. If you can raise a crop, you're good.

You can learn how to fix a machine. Yeah. That's what I'm saying. Don't say you're not educated. You're just educated. Yeah. And you also, you Olaid me too, my friend. You got to have a hard conversation with the wifey. We got to sell that house. Change our living situation soon. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or...

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Alongside Jade Warshaw, I'm Ken Coleman. Thrilled to have you with us here on the Ramsey Show, 888-825-5225, 888-825-5225. Isaac is going to join us now in Cedar Rapids, Iowa. Isaac, how can we help?

Yeah, good afternoon, Ken. I just want to say that I really appreciate the free resource that you guys provide. It's a lot of wisdom and guidance for some young people like me and people that are just looking for help. Well, thank you for saying that. We're glad you're here today. How can we help?

Yeah. So I'll give you my situation and then I'll ask my question at the end. Um, so I'm 24 years old. I'm on baby step three B kind of slash four. Um, I don't plan to buy a house in the next 18 to 24 months. So currently I'm renting and putting 15% of my salary towards retirement. Um,

Right now I've got 4% in my HSA and 11% towards my Roth 401k. And so if you were in my shoes, would you recommend that I continue to put that 15% towards a retirement?

and then have a smaller amount set towards a down payment in the future? Or would you put either more towards the down payment or even more than 15% towards retirement since I'm not planning to buy in the next year or so? When are you planning to buy? Like if you had your way, when would you want to buy?

Probably two years from now. Okay, so I just reverse engineer it. I'd say if I want to buy, if I want to be sitting in the house two years from now, then I'd ask myself, okay, how much would that house cost?

That way I can figure out what the down payment would be. And then I can work it backwards and say, okay, let's pretend I need to put 80, let's pretend I need to put 80,000 down. How long is it going to take me to get that? And if you run that math, you, you might find, okay, I do need to start now. And something tells me, yeah, if you want to do it comfortably, you might want to start now. And here's the thing, here's your options.

You either start now and you do a mix of, I do a little bit, you know, you've done the calculator and say, okay, I'm going to put $500 away every month towards this and the rest goes towards baby step four. You might find you can do both.

you might find that you can do the full 15% and put aside. I was thinking, can we dive into your numbers a little bit, Isaac? What is your take home? What's your take home? I was actually just about to mention that I've got the Ramsey Solutions calculator in front of me. I've got how much can I afford? Yes, perfect. With my take home pay per month,

I'm bringing in $4,800 a month. Okay. And so that would allow me, according to your guys' calculator, to afford a house that's in the range of $116,000. So that's $1,200 a month for mortgage. Yeah. Okay. But before we get to that, I want to stay on this line here. So $4,800 a month is your take-home. How much margin do you have after you take care of all your necessities?

Because you started off the call saying, I'm in 3B, 4, and I'm just curious what kind of margin you have after taking care of necessities. Yep, just under $1,300 per month. Is that including the 15% to retirement, or is that excluding that? Yep. Oh, well then I'm with Jay. Including the 15%. And then I've got...

That's just over $1,000. That's going towards my HSA and 401k. Okay, so you're putting around $720 into investing, and then after that you still have $1,300? I just want to be clear. Correct. Okay, so if I'm you, I'm doing both. How much, when you do the calculator, how much does it say your down payment needs to be? Down payment is $23,300. Okay, and so then run it back. What's that divided by 24 months?

Yeah. Well, and so I guess bingo, maybe it adds a wrinkle. Maybe it doesn't. Okay. Um, I've got, I've got 36,000 currently saved up just kind of for in the future. I, I might be getting married, might want to have a wedding ring. And that's not your three to six months expenses. That's just extra, extra. Correct. Correct. So that's on top of the three to six months of expenses. Um, are you seeing anybody or is this just hypothetical? Um,

That is a bit of a funky story there. Oh, I kind of like to know. I want to know too. Okay, so let's prioritize this. Let's pretend we had to make a list of priorities because essentially that's what we're doing. First on the list is investing. That's a green check. Next on the list is, is it a house or is it the future Mrs. Isaac? Ha ha ha ha.

Are you asking or saying? I'm asking. She's asking. You tell me the priorities because that lets me know if this $36,000 is up for grabs or if it's not. In other words, are you buying a house for you or are you just going to wait until we get serious and we're ready to get married?

Yeah, I've got a buddy of mine from church who's allowing me to rent for relatively cheap. So currently, I don't see a lot of reason to buy a house for myself right now. And so I've kind of got this $36,000 in a high-yield savings account. And fortunately or unfortunately, it's kind of just sitting there and getting four

four and a half percent on growth. That's fine. I think for you, where you're at, you're definitely at less than a five-year play, I think. If you were like, Jade, this is more than five years out, I'd say go ahead and invest it. But I think it's a less than five-year play. And if I were you, I'd do the priority. I'd keep investing, number one. I'd keep the $36,000 exactly where it's at. And you could label it wifey, wedding, whatever, life-to-be, down payment, whatever.

And then say, okay, I'm also going to save an additional $12,000 each year to put with that so that when the time comes, I can do engagement ring, put towards a wedding and put towards a down payment. Don't forget the honeymoon. Well, let somebody else buy your honeymoon. That's a gift.

Really? I think so. Is that a thing? Quick question with that. Would you ever recommend putting more than 15% towards retirement at this point? At this point, no, but later on, definitely. The one question I had for you, Isaac, is I thought I heard you say when you told me the mix of what you're investing was, it sounded like you were putting more towards your HSA than your Roth 401k, and that was a question mark for me. Why are you doing that, if I understood correctly? So...

No, I've got 4% towards my HSA. So that's the maximum that I can contribute to my HSA. And then 11% towards my Roth 401k. And yeah, my question is, why wouldn't you just max the Roth 401k first? Because it's the better investment vehicle, unless you have a health situation I don't know about, which is... No, I guess what I had heard is that an HSA, you got triple tax advantage. You do. And so I figured that I would max that out. And then...

And then put the other 11% of the 15% towards my Roth. It is triple tax advantaged, but all in all, if I were going to go in the order of best practice investing, I would max out the Roth 401k first, simply because it is Roth status and it's not just for medical purposes.

situations. Now, don't get me wrong. Your HSA will convert at age 65 to regular retirement. But until then, the truth is it would be caught up in medical expenses. So unless you were like, hey, Jade, trust me, I need this because I go to the doctor a lot or whatever, I would do a Roth 401k first, and then I'd go to a Roth IRA, and then I'd go to an HSA. I'd let that be my final option.

Okay, so you would go Roth 401k and a Roth IRA. Do you have a match on your Roth 401k? Yep, and so I'm already hitting that match. Okay, yeah. I'd max that bad boy out, go to the Roth IRA, and then I'd probably do the HSA last. It's still a great vehicle, but for what you get,

And access to it. I'd start with the others first. Yeah. Congrats, by the way, young man. I mean, listen, you got your act together. I mean. Yeah. You really do. And by the way, what I was saying, I just want to clarify that, Ken. I'm just happy you're investing. Right. Like if you take that advice, you're going to, if you don't, you'll be just fine. Yeah. It was just me splitting hairs. Yeah. You're so early in the game. And so whatever your romantic situation is, we're rooting for you on the timeline. But I love just stacking that money. Just stack the money. Mm-hmm.

Because eventually you're going to get a house. Yep. Whoever the missus is or whatever, you know. And so love that you got the low-cost rent. Love that. Love your discipline. Good job. Yeah, hope that cleared everything up for you, man. But wow, he's going to be winning big. Don't you wish we had done this earlier? 23, 24 years of age, are you kidding me right now? But alas, we're helping others. Hey, quick break, and we'll be right back. Don't you dare move. This is The Ramsey Show.

This show is sponsored by BetterHelp. This is the season for Halloween. It's October, we're wearing costumes and we're wearing masks. So if you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest. A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work, we do this around our friends, we do this around our families.

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Welcome back to The Ramsey Show. So glad you're with us. I'm Ken Coleman. Jade Warshaw is here as well. 888-825-5225 is the phone number. 888-825-5225. Hey, student loan debt is an epidemic. I don't think that's a breaking news headline there. And defaulting on debt makes you feel even worse. But our question of the day sponsor, WhyRefi, refinances defaulted private student loans.

and builds a custom loan based on your ability to pay. You'll have a payment so you can afford with a low fixed interest rate you couldn't get anywhere else. So go to YRefi.com today. YRefi.com slash Ramsey. YRefi.com slash Ramsey. It may not be available in all states. All right. Today's question comes from Andre in South Dakota.

He says,

I don't think these videos go in depth enough and I'd like your opinion on if I should spend the money and the time it would take to complete the courses, I would still have time to do both my business and the courses. Well, the way the question is set up, Jade,

I'm going to answer it. Okay, Ken. Watch the YouTube videos. And if you watch the YouTube videos and it doesn't give you enough, you say to yourself, this is not enough. Now I need to go pay for a course. So I do think there are some free stuff out there that you can get. But I'm a big proponent when it comes to technology of...

Actually vetting, let's call it two to three at a minimum of technology schools. I endorse Bethel Technology, Bethel Tech and fabulous BethelTech.net and call them up, tell them Ken sent you. I mean, they've got a nine month program.

Costs about $15,000 for a full-blown certificate. They've got a $5,000 program they can take in a much shorter time that's micro-credentials. Both will get you hired. And I've sent thousands and thousands of people there, and they're making good money. So it's one of those situations where you don't need a four-year degree for tech.

What you need is a quality program, and I'll just give you a couple of characteristics you're looking for. How long have they been around? Yeah. Do they have strong placement? They can actually prove to you that they've got a history of placing students that come through their program into good paying jobs with a track for growth.

And that's what you're looking for. And is it reasonably priced? And so based on that, based on, again, you can look in the technology field and say, okay, I want to go into data analytics. Okay. Then go to multiple companies and look at what's required for a data analytics job and then go, okay.

This is simple check the box here and make sure it's credible. You could use a YouTube as a prerequisite to get your feet wet. Yeah, but there's a difference, and I think that's how you know. So thanks for the question, Andre. Appreciate that. To the phones we go. Kyle is joining us now in Seattle, Washington. Kyle, how can we help?

Hi, yeah. I'm in a bit of a situation. I'm trying to figure out just a lot of debt and trying to figure out how to stop living paycheck to paycheck and just not being comfortable at all financially. Me and my girlfriend have a three-and-a-half-year-old, and we're currently living in a single-bedroom apartment, and it just feels like we're not really getting anywhere. So I'm trying to figure out the first steps I've got to take here.

Tell us about the money because a lot of times all signs point back to that income. So what's going on with the income? So do you want the debt or the income first? Tell me the income first between you and her combined and then tell me yours separately. Right now,

Right now, I make just around 50 gross. And my girlfriend, she just started a new job and she's making around, like, I would say like around 30 right now gross. Can you tell me it in take home pay? Tell me what you see on your checks every month, what you take home. Oh, my check. I'm going to say without any overtime because there's no overtime at the moment. Without any overtime, I make about just close to $1,400, like $1,380 per paycheck. And you get paid twice a month?

Yeah. Okay. And then what about her? She just started her job, but they're going to be having her at about 30 hours a week at the moment, just starting out. So she's going to be making probably like just like around a thousand per paycheck or a little under. Okay. I don't know exactly yet because she hasn't gotten that first check yet. Okay. And how old are you guys? I'm 24 and she's 22. Okay. There's your, there's your issue.

before we get into the debt or anything like that. I think the issue is it's still a little slim, especially if you weren't combining money, which you're not married. So I wouldn't suggest you to combine money. I'm assuming you're getting married though soon, right? Yeah, that's the plan. She's the one I got my eyes on and she feels the same way as well. We've been together for a little over a year or so. Okay. If I had to ask you, is it 100%? Would you say yes or no that you want to marry her?

Yes, 100%. Okay. So sidebar, I'd make that happen legally sooner than later. Yeah. Like, bro, can I just be man to man with you? You don't have your eyes on her. You're living with her.

This isn't like I kind of got my eye on you, kid. You're living with her with a kid. So it's time for you to commit. I'm with Jade on that. Not trying to be too intense with you, but it's time for us to decide to actually play this thing out and make her your wife. And let's get serious about getting our life together. For many reasons. Some are legal. Some aren't.

But what I'm talking about for this current purpose, out of the many reasons, is you guys can then focus together. You have a life together. You have a family together. You can combine your money safely. Then you can say, okay, what's the debt? And we can start to tackle the debt. Because I think that if you guys start attacking this separately, which you will need to do until you're married, it's just going to cause it to be difficult and there is going to be confusion. See what I'm saying? Yeah, for sure. Yeah. So tell me about the debt situation.

um so uh her only debt really is just her car um she owes like just over 20 and then me i have a little more than my car i as well owe just a little over 20 and then i have um some a little bit of irs debt um some stuff in collection so like after the car tell me the amount what's what's irs debt tell me the amount um i i think it's around like

$2,000 right now, $2,500. But like with all the debt combined after my car, like I probably have the $20,000 on the car and then like another $10,000 or so. Yeah, but can you tell me what it is? Because it's important because for instance, IRS debt needs to go lickety split to the top. That's the most important debt. Yeah, last time I checked it was a few months ago. It was in the $2,000s. Okay, so $2,000s to IRS, what else?

I have $1,800 in collections and then I have $2,500 on credit card. Okay. And then I owe a family some money. I owe about

Okay. So if I'm looking at this until you guys get the money combined, you have to look at it as just yours. So for, for right now, I'll tell you with 2,700 and the amount of debt that I hear, see here, you're going to have to pick up work, work, work, work, work and day and night. Like Michael Jackson said, you're going to have to pick up work, work, work, work,

Working day and night. Yeah, so I actually did. I didn't mention this. I forgot to. It's so recent. I started a second job. It's just on the side because my full-time job switched me to four days a week, 10-hour shifts. And so I picked up a second job because there's no overtime at the moment. And I'm working kind of like up and down two days a week. But one week I'll get two eight-hour shifts, but next week I only get one five-hour shift. How much is it? It averages to around $20.

20 hours every paycheck. Which is how much money? I'd probably make about $300 to $400 paycheck. Okay, so maybe another $750 a month? Yeah, I would say another $750. Okay, good. So good. And I want you to do that and more. Keep going. And so let's talk about how we're going to attack this debt.

The first thing is the IRS. The next thing is going to be collections. But with collections, you're not going to pay the full $1,800. You're going to call them up and settle for half.

You're going to save up $800 and you're going to call them and say, hey, this is all I have. Will you settle? They're going to say yes after several attempts. And then you're going to ask for it in writing. And then we're going to clear the family debt. And then we're going to start with those credit cards. I want both of you to look at your cars because if you can sell them and break even, I want you to get something cheaper than $20,000. And that's for both of you. Yeah, it's really good. Man.

Youngsters. Youngsters. I was once young-dom. They can dig out of it. She is Jade Warshaw. I'm Ken Coleman, and this is The Ramsey Show. Hey, good folks. Dr. John Deloney here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what?

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Welcome back to the Ramsey Show. I'm Ken Coleman, and I'm alongside Jade Warshaw. The phone number is 888-825-5225. We'd love to coach you up today. The best way to make the most of your money is by creating and sticking to a budget. Every dollar is our budget tool. It allows you to track your money.

Expenses, plans, spending, save for what matters most to you, all in an easy-to-use app, and keep your pulse on your progress. Download EveryDollar for free in the App Store or Google Play, or you can click on the link in the description if you're listening on your favorite podcast app or you're watching on YouTube. I want to say something more about this. You can say whatever you like. EveryDollar. I'm going to use this as a segue. I probably don't need to do this, but EveryDollar is the crux of everything that we teach online.

via the baby steps, right? You do the baby steps, but it's all based on your budget. Your budget allows you to do it. And the whole reason that you're doing it, the whole reason that you're getting on a budget, you're walking through the baby steps, you're doing these things that make you a financially responsible adult is because you want to have the life that you want to have. And for everybody, that why is a little bit different. But ultimately, I think it's fair to say, Ken, that we want to be able to

uh spend money on the things that we value and do it without guilt and shame and debt and regret and all of that we want to be able to provide for our families i think we all kind of feel that

yesterday. Remember the guy called in because you and I were on the show together yesterday. He was a young cat, 23 years old. He had saved $100,000. He lived with his parents. He saved $100,000 and he had another $37,000 in an HYSA and then he had another $7,000 cash. Oh, I remember this call. I told Stacy about this call. I was like, we had fun with this one. We did. So he had $140,000

$42,000 saved at 23. And he said, okay, I'm about to move out. I need to buy a new car. How much can I spend? Remember, Ken, tell us what happened next. Well, so you went first and because I'm a gentleman and wanted you to walk through the door first. And you said, I'd spend about $30,000. I was genuinely shocked.

And was far more conservative and led a rally against you. You did. With the studio audience in a fun way. I said, who's coming with me? It was my Jerry Maguire moment. And the audience was with me because I recommended that he spend $15,000. And now mind you, for those wondering, he made $55,000 a year. Why do I feel like you're slowly walking me into a corner?

Because I went, I rarely do this. I looked at the comments because at the time you said the studio audience was against me. They were like 30,000. That's too much. It's not so much they were against you. They were just with me. They were with you. But then I looked at actual comments and y'all were like, Jade is tripping. She told this man to buy a $30,000 car. So they were, they were, so the masses were also with me. Yeah. And I was like,

I was like, I feel like I should have explained my thought process better because here's the thing. The rule is, look at you. The rule is, yeah, you don't want things to be, you don't want things with a, you can't replay your play. You played your play. I'm, I'm defending it because I want to show everybody why I was not wrong in this. I didn't think you were wrong. I just thought you were generous because I'm like, he had the cash. Yeah, he, it was a $2,000 difference. If you want to hit our rule, which is you don't want things with a motor, uh,

yeah cars you don't want it to be any more than half of what you take home like what your yearly salary is his was 55 i'm like yeah spend 30 technically i probably should have said 27 50 but fine but what i wanted people to take away is he did all of that work all of those baby step moves because the point is you live like no one else so that you get to live like no one else it just so happened he was 23 and did it early because here's the thing

He had a lump sum of $100,000 saved. If he doesn't touch that, if he does nothing else, Ken, when he retires, he's going to have like $6 million. He can get the $30,000 car. And what I want people to remember is we do this so that.

And it's not so that we can be a tightwad. It's so that we can live our life. Looks like the commenters got to you. I'm just saying. All right, so now let me come back. I want people to know that there's another side. Not you, Kent. I know I'm coming at you hard. No, you're not. You're not at all. No. And I want to say, I was having fun. And if you watch that back, I was having fun. I was basing my $15,000 on the reality of how tight that kid was.

Yeah, he was very frugal at heart. You're right. Yeah, yeah, yeah. So I don't think that your recommendation was wrong. It's not even a right or wrong. You were given a recommendation. I totally get your point. He had the money to do that.

I'm not a letter of the law guy in that particular situation, so I don't mind that it was $27,000. So I had no problem with your answer. That was me having fun, and you know that. We discussed that. Oh, 100%. So to the commenters, I was just saying for this kid, I knew there was no chance. He wouldn't spend that. Well, first of all, when you said $30,000 car to him, I promise you his eyes bugged out of his head. Oh, they did, because he was like, oh, no, no, no, no, no. I was like, but you could. And here's the bigger point here. The bigger point here is...

If you can do what it takes, if you can sacrifice to win early on, you utilize the power of your every dollar budget, and you can be anything like this kid, whether it's at 23 years old or 33 years old. The point is, he buckled down and saved $100,000 at 23. And he could afford a nice car, and you said... No, no, no. The bigger...

thing here ken is the investment play if he doesn't put another dime if you plug this into the ramsey solutions.com calculator 6.5 million dollars he said if he doesn't touch it i got that but i'm just i'm just trying to come to my friend's defense and say you were just saying man young man go get yourself a nice go get yourself a nice car and don't feel no any kind of way about it this is why you stay out of the comments i commented back for the very first time no i'm sorry for who i

comment to do. I literally was like, you can't, you got to let the comments ride. And it wasn't salty, but I think somebody was like, Jade, you forgot the rule that, you know, he makes 55. I was like, bro, I didn't forget the rule. It's, it's a $2,000 difference. He's going to have $6.5 million. It doesn't matter. I feel like you feel better now. Do you feel better? Cause you got that out. I'm gonna feel the same. Like I went home and ate a sandwich. I'll be honest. It wasn't that big of a deal, but

No, it was all good fun, but I do remember that. But yeah, yeah, yeah. So it's interesting. Okay, so this will lead to another conversation. Okay. The spirit of the rule.

Yes. Versus the specifics of the rule. Okay. I love that. I do think because we have a lot of new listeners, James, and I want to cover this. I also want to give our callers full time. But because we've got into this, I do think because we have new people, I feel like every week we have people calling in going, I just started listening to the show. Yes. So I would like us, and since you're a money personality, I'll play along. Okay. But I'll cede to you here.

Um, let's talk about that. Some of the things we talk about, there's a spirit to a rule and then there's some specifics to a rule. Do you care to shed more light? Cause I think it's important. Yes. I want to make sure that everybody knows that the baby steps are the baby steps. We're never going to tell you to not work the baby steps. We're never going to tell you to do the baby steps out of order. We are very integral to

on that because we know that it works so if anybody ever calls in and is like well could i do baby step two before i do baby it's always the answer is always going to be no right now within that there is guidance and there are rules of thumb so to speak or there are uh kind of just ideas that we have found work over time but you have to also go it's not legalism like we're not

Nothing. Lightning is not going to strike you. For example, we say your home mortgage should be no more than 25% of your take-home pay. Great example. If someone calls and their mortgage is 28%, you're okay, boo. Yeah, we don't hang up on you. You'll be fine. You'll be strong. And the same thing with this. Yes, as a rule of thumb, you don't want your vehicles to be more than 50% of what you earn in a year. And the reason for that is simply the fact that it's a depreciating

depreciating asset it's going down in value it's just we're trying to make sure everything is a balanced scale and so if my guy spends a little bit more you want to know what lightning's not going to strike him it'll be all right and that's where the spirit versus the specific so for instance in his case he was wildly wildly financially fit like he was he was he was a bodybuilder

He was a bodybuilder. He was in great, great shape. And thus the spirit plays versus the specific. And I just want people to understand some of that stuff. It's like some of our audience is like just and I love our audience. Yes. I cannot tell you how much I love these folks. But they like to take us to task on that. But they came at you yesterday in the comments because of the percentages there. Yeah. And so I think it's a healthy conversation.

This is all about giving you a very clear framework. That's what the baby steps are. That if you follow those steps, you're going to win. Let me tell you, though, I was like that meme of Homer Simpson when he comes out of the bushes for a minute in the comments. I never go in the comments. And I lucked out just because I picked the 15 grand because I knew that would stretch that kid beyond his wildest imagination or else I would have been killed too. So, hey, good discussion. All right. Good hour. This is the Ramsey Show.

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