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from the Ramsey Network it's the Ramsey Show I am your host Jade Warshaw next to me one of my favorite guys out there Ken Coleman come on now starting off like that I mean running it back from yesterday yeah oh thank you this is great yes we're taking calls together about your life and your money I'm gonna hit you up on the money side and Ken he's gonna help you with the professional growth income income income all of it oh you just want to do it we're just saying income today

No, no, no. It's always the professional growth stuff, but I want people making more money. I know. That's right. More money. Let's go to Daniel. He probably wants to make a little more money, too. Daniel in Pensacola, Florida. What's up, Daniel? What's going on? How are you guys doing? We're good. How can we help? All right. So I just got a quick question. I'm wondering whether or not me and my wife are using the sinking funds.

Almost like debt. I know that sounds funny, but I want to make sure we're not using this wrong. We kind of disagree on this, and it doesn't come up often, but when it does, it's this whole thing on using the sinking funds in a way I think is not the correct way. So to give an example, let's say we have a planned fund for Christmas, and just to make it easy, I can say $100 a month. We started in January.

And we're going to plan on having the $1,200 by the end of the year. But something comes up in June. Oh, hey, I want to buy this thing. And I say, well, let's say before, let's plan ahead for that. We don't have the money right now. And the response is, well, no, we have the money. There's $600 in the Christmas fund. Let's just use the Christmas fund. We'll pay it. And then we'll pay that back before the year's over.

And then it just feels like, well, if we do that, then the margins are going to be lower for the rest of the year, meaning we can't do our goals if we want to. So in my mind, I say, hey, if we go that route, that's okay. But that's a loss. So now we're going to have less at the end of the year for Christmas rather than paying it all back. That's right. So I wonder if it's right or wrong, how we go about doing that. So I want to know.

Yeah, I mean, I could definitely see that being a frustration if Sam and I say, hey, we're pooling this money and this money is going to be used for a car and we do that all year long. And then at the very end, Sam is like, hey, actually, I'd rather use this for X, Y, Z. And if I don't agree with that, then, yeah, I feel like, hey, you're going back on what we agreed on. And that's a problem. I do think it might feel a little differently if both of you agreed that

hey, I know we put this money aside for Christmas or we put it aside for a car, but both of us agree something else has come up that's more important. And we both agree that this money should be spent in this way. I don't have a problem with that because it's your money. You get to decide. But it does sound like there's a little bit of an issue on doing what you say you're going to do. And with money, there's a big part of that, that when you kind of draw a line in the sand and say,

Here's what I'm going to do standing by that is is is a sign of discipline. And in this case, it kind of sounds like that it more is a discipline thing and you guys not being on the same page.

So, okay. I guess the question then is kind of like, does it still, because my logic that I try to explain is that we're kind of using our sinking funds like debt. So let's just say we use $300 out of $600 that's been currently saved up. And her logic is, well, we'll pay that back in the next couple of months. It's not debt. It's not debt, but I see how you're viewing it that way. You feel like you're robbing Peter to pay Paul.

I'm robbing myself later to pay myself now to feel like I'm like, what? Yeah. That's what I was kind of asking. It's not okay. This is a marriage conversation.

That's what this is. I mean, Jade's right. It'd be one thing if you both are on the same page and decide to do it, but you're giving us a scenario where you're not on the same page. And you guys have said, all right, we're going to save money. I feel like we're thinking about this too hard, Daniel. This isn't a sinking fund. You can call it that, but this is just called...

Intentional savings. And Christmas comes once a year. And it's an expensive month. And so we're saving money so that we aren't tempted to go into credit, right? And do all the things that everybody else in America does. I get it. She doesn't get it. And so you got to help her get it. And this is a multiple conversation piece, potentially, where you go...

babe, we said we were going to do this and now you're changing it up on me. And it's not something big that we're in agreement on. It's just something shiny that you want. And you're just going like, I want it now. We'll pay for it later. And that's what Congress has done. That's why we're barreling towards $35 trillion in debt. I'm not joking. You're right. You're right. It's a hundred percent what's going on in Congress. They just pass a spending bill and they go, well, we'll figure it out later.

And so I think this is a marriage conversation to say, this is frustrating for me, number one. It's confusing for me, number two. And we need to get on the same page here because Christmas gifts, I think, are a priority. I think they are. And I love the idea that they're even thinking ahead and doing that sinking fund. Yeah, this is a...

Okay. So Ken and Daniel, when I talk about budgeting, which is really what this is a subset of, I talk about budgeting being detailed, realistic, and flexible. The flexible part of it says, Hey, I might have a line item on my budget that says, I don't know, we're going to spend $200 on entertainment for this month. Right. And then something comes up that you both deem as important or,

I don't know, you forgot to plan for grandma's birthday and you both love grandma. So you both decide, hey, let's pull money out of that entertainment category that we were going to use to go to the movies or take the kids to the zoo. And let's use that for grandma's birthday party. That's an example of the budget being flexible because, yeah, you can look at a line item and say, I thought I was going to use that money for this. But now we are deciding we are going to use it for this. That is OK. I don't want anybody to think that that's like lightning's going to hit them.

But, Ken, to your point and to my earlier point, I do believe that when you are dealing with a bigger amount of money that you've both agreed ahead of time is for this. Unless you both agree that it's not going to be used for that, you got to call a truce. Like nobody gets to spend it until we both agree what it's going to be spent on. Yeah, because to your point on flexibility, Christmas isn't flexible. No, it's coming. It's the same day every year.

Yeah. And I just think the way you've teed this up, Daniel, is this right? Is this wrong? I mean, we've told you functionally how to use it. What did she want to spend it on? We didn't ask. Daniel? Oh, Daniel went for a ride. He's like in a wind tunnel. He went to the drive-thru. Are you there? So what did she want to spend it on was the question from Jade. Oh, so this, it was a little while. So to get rid of, so we wanted to stop the eating out and the Starbucks fund.

Because we didn't we were in a transition period of moving out. We were living in the camper, didn't have a lot of our stuff. I'm in the Navy and a lot of this stuff got moved to the next state that I'm moving to. So to avoid the Starbucks, like, hey, let's get a let's go to Target, let's get an espresso machine and we can skip the Starbucks and we can get your coffee every morning and we're good to go. So this was an attempt to save more money.

And my mindset was, let's just save some more money. And then it's like, well, we have a bunch of money in the bank right now waiting since, you know, and for other various sinking funds, not just Chris's other things. And I was like, well, that's all been set aside. Okay, I see, I see. I would have said, my answer would have been, all right, let's take what we've been spending on Starbucks and restaurants and let's put it away for a couple months until we come up with the cost of the...

Whatever, the fancy coffee machine. 100%. And honestly, hearing what she wanted to spend it on, if she was like, hey, I saw this new purse or hey, we want a new grill for the patio, that feels a lot different than her also looking for ways to save money. And it sounded like this espresso machine was a way for you guys to save a little more. You could also go get a $50 coffee pot and just let it drip. I know, that's right. Let it drip. Let it drip.

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this John. Why don't people want to take care of their family? They think they're gonna die or something? Well I used to be one of those guys I didn't even think about it and one of my buddies said hey the only reason to not have life insurance is if you hate your wife and kids and

And I immediately went and got term life insurance. That's a gut punch. And you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. And they don't know what to do next. Me too. I mean, you're going to have a crisis here. And, you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow.

That's exactly right. These are the two options. Take care of your dadgum family, man. Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually...

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Back to the phone lines we go. We got Jen in Calgary, Alberta. What's up, Jen?

Hi there. We have ourselves in a bit of a pickle, and I'd like to hear if you guys have some advice. Yes, ma'am. So what has happened is that my in-laws have built a granny flat, like a suite, attached to our house. And they've been living here for about two years now. And we find that my husband and I are not...

It's just not what we imagined it would be. We're not really enjoying the dynamic and just the arrangement anymore. And we don't know how to separate financially. And just it's been a relational toll, taking a toll on our relationship with my in-laws. And yeah, we're really not sure what to do. The in-laws paid for the suite to be built onto your house? Yes.

Ooh. Yes, they did. Yeah. What, how much money did they sink into that? It was 200,000. Oh my word. That's not a suite. That's like a full blown house they put on there. And how much did it raise the property value from what to what? Uh, um, the pro like maybe a hundred thousand. Oh gosh. So it didn't even break even yet. No, like it,

Yeah, it didn't. And now it's kind of created this unique house that it doesn't really raise the property value because it's not. It's not normal. Was it licensed? I mean, I don't know what it is in Canada, but you have to get a permit for that in the United States. So did that change any of the titling at all or is it all still in your name?

The title and everything is in our name. Our taxes have increased, but that's all that. Everything is in our name, my husband and I's name. And you've been paying the taxes on the addition? Yes, yeah. So they just paid cash for the $200,000? Yep, yep. What's happened? Give us, without getting into all the nitty-gritty, give us a good summary of what is going on relationally where you guys are like, wow, this was a bad idea. Yeah.

Well, things financially get a little bit twisted. My husband and I, we don't make a lot of money, and so we're building up. It's an acreage property, and so it takes a long time for us to build it up and restore it and make it look nice. But they want it to look nice, so they want to invest more and more money into the property to make it look good and buy a tractor and stuff.

And we just don't feel comfortable allowing them to keep pouring money into it. And we don't have the money to like split things half and half. How much have they done aside from the 200K? How much other money have they invested doing the things you're talking about? They haven't because we just keep putting the brakes on with like landscaping and stuff. Oh, so they're suggesting all of this and you keep going, not right now.

Yeah, yeah. Or has your husband had a conversation with his dad and his mom to go, hey, this isn't working relationally?

Yes. And we've had like another issue was just the boundaries. Like they're literally attached to our house. So like our boundaries, like people would come into the house multiple times a day. And it just felt like there wasn't really a boundary of like our life and their life. Well, sure. But again, let me go back to the conversation. What came out of the conversation? Hopefully it was confrontational. It doesn't have to be ugly, but hopefully your husband confronted this. What was their reaction? Where do we stand today?

Like, we have asked, we have told them that we're not happy with that dynamic. And we've asked them to like, because they do have a different, they don't live here 100% of the time. They have an apartment in like a different city by some other family members. So then we've like asked them to not come as much. And so that...

Yeah. How did they react? I still can't, I can't get a direct answer from you. How did they react? What did they say? They were very hurt and they were very confused. They felt like they didn't understand why. Cause it was like our idea in the first place to find them closer. So then they feel like,

Like they're so confused. Had you lived with them before? Like, had you lived with them in some capacity before the bright idea came to do this whole flat and add on to the house? Or that was just like, hey, we like you guys when we go out to dinner, let's live together. And did it go from zero to 100 like that?

Well, there had been some instances like over the summer, like we would we had spent like a couple of months in their house. And unfortunately, like I it always. Yeah, it would kind of got to the point where we're like, OK, it's time to go home. Was this your idea or your husband's idea?

I'd say it was more my idea because I lived, my grandparents lived beside us and as a kid, I loved it. Sure. All right. Another question. Cause we got to try to help you here and I still don't know. Okay. We know they were hurt and confused. Where does it stand today? Was there any kind of conclusion or tactical conversation about what's next after you've hurt them and confuse them? Where do we stand today? What's your idea for them to fix this? What's the idea?

Well, we did talk about physically moving the building and they could like put it on a different lot. So detaching it from your house and then putting it on their own lot. Yes. Are they open to this?

Well, they kind of, but they feel like it's going to cost way more money. And then they're going to have to build a foundation and buy a lot. And it's just more and more money. So what was their response from a solution? Or is there no conversation on an idea or two? I heard your idea. What was their idea? Did they say, sorry, you're stuck with us?

Well, not really. Like, I feel like we're still trying to keep having conversations. They didn't, yeah, they didn't like the moving idea because it was going to be a lot of work and they feel like they don't want to deal with that. So tell me this. We're just at a standstill. Tell me this. When you bought that, how long did you live in the house before you added your parents, before the parents added their deal to it?

Maybe two years. So two years. Let's let's let's look at this like as mathematically as possible. So two years, if you can remember back, how much equity did you have in the house at the two year point? Do you remember? Well, it was like a bank repossession. And so we've been fixing it up. Just direct. Try to direct answer it.

Maybe like 50,000. Maybe 50,000. So let's pretend that that 50,000 was yours before they were ever part of this. So that 50,000 is yours now. I'd say more than 50 then with the like land and stuff. Sorry. Okay. What would you say then? I would say like when two years ago, the property would have been worth...

Worth that, but what would your equity be in it? I don't know what you purchased it for. So what I'm asking is, if you had sold the house two years ago, in the first two years, what profit would you have taken home? Because I'm trying to divide this up so that you guys can talk about this in a fair way.

Right. Yeah. So that's your homework. Your homework would be to go back and say at the two year point before you guys ever got involved, here's here's what we here's the equity we had in the property. Let's pretend it's 50,000 just for the sake of this idea.

Then parents get involved. They spend $200,000. They do the thing. And now you've been living like this for a given amount of time. And that given amount of time, how much then has the property appreciated further? Let's say it's appreciated another $100,000, right? So now it's like, hey, there's $100,000 of appreciation that really has to be split. If we get rid of this property, that's really what has to be split between the two of us. And the parents are going to have to realize, okay,

They made a bad investment. That has zero to do with you guys. They just made a bad investment. They put too much into the property because the market is not giving it back. And so that's not on you. That's on the market and that's on their choice. So then, Ken... I got to jump in. Tell me. Okay, I love the math thing and I think that's the homework. I'm going to jump in and say...

This is a continuation of some very uncomfortable conversations to which you and your husband have to own the fact that you invited them in here. And did they spend too much on the addition, in my opinion? Yes, I think Jade's right. But you blindsided them. Yeah, you did. I think you guys are going to have to solve this relationally over time or...

You're going to have to make the tough decision, sell the house. You're both going to take the hit financially. Split it and walk away. Yep. That's the either or, and I wanted to just give you that, what I think are your practical choices. Ken is right. You're going to sell this house. That $100,000, you're going to end up splitting down the middle. You're going to lose out, and they're going to lose out. This was a bad choice.

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If you're tired of living paycheck to paycheck and wondering, where the heck is my money going? The first step is you need to get on a budget, okay? So our team is hosting a free budgeting training this month, otherwise known as a webinar. And you'll learn step-by-step tricks on how to stick to the budget. And I'll see you next time.

Honestly, how to use EveryDollar, which is really the only budgeting app I use. It's the best budgeting app out there. You'll get to have your biggest budgeting questions answered because it is a Q&A format, which is great. You can go on there and ask exactly what you've been burning to know. Just remember, spots are limited. You can sign up for free at everydollar.com slash webinar. These are great. If you haven't got into one, you need to get into one. All right. Back to the phone lines. We got Mark in Indianapolis, Indiana. Mark, welcome.

What's going on? Hello, how are you doing? Doing good. How can we help? So I have racked up a little bit of debt since I've been 18. I'm currently in about $26,000 worth of debt. My income's at $52,000. Possibly my girlfriend of about seven years or possibly considering a baby in the next year, although she has a car loan.

on top of all my debt that has about $14,000 on it. I'm just looking for the best advice on how to take all this. Well, I'm going to jump in real quick on the baby issue. I would not be greenlighting a baby while we're in debt, and it seems like there's a lot up in the air with you two. So that's the first thing that I heard that to me is a red flag. Okay. Are you thinking of getting married before you have the baby or just in the current situation having a baby?

We were thinking just the current situation, although marriage, that would be one thing. We've been together for a while. We've talked about it. Listen, I like the idea of getting married before you have a baby. You didn't ask me my opinion on that, but there it is. Is it her idea or your idea? Is this one of those, hey, Mark, I'd like to have a baby, and you're like, oh, okay. Or were you the one that brought it up, or was this equal excitement?

She brought it up, but I will say it is more of an equal excitement thing. What are you waiting on? What are you waiting on? Why haven't you asked this girl to marry you? We've had our issues in the past, um...

Well, we worked it out, so... How long you been with this girl? He's seven years. About seven years. Okay, I didn't pick up on that. Man, it's time. Dude, put a ring on it, man. Get some grits or get out the South. That's what they say. You gotta... I've never heard that, and that became my newest favorite phrase. Get some grits or get out of the South? Yeah, man, it's the same as like, painter, get off the ladder. How have I not heard that before? I think...

I, you know, if she's talking about a baby, she's got for, you know, forever in mind, you know, and that's a good indicator, you know, that, that she does. And she's probably thinking that if you say yes, you probably have forever in mind too. And if you have forever in mind, you may as well put a ring on it. You need to get serious though, man, and get out of debt. Like this is priority. Number one is clear all that junk. And by the way, uh, that's not an insurmountable, uh, number for you.

Okay. Do you agree? Yeah, I definitely agree. I just finished. I listened to the total money makeover earlier this morning at work, actually. Good. I was able to. Okay, so then you know the first step here. I mean, you mentioned the $26,000 of debt, the $52,000 of income. Do you have any money saved anywhere? No.

No, that's the thing. I don't have any money saved. I was looking to start the Baby Step One to save the $1,000. Although I got an email today from Chrysler Capital wanting me to call them, so I did. And they're offering me a payout for an old auto loan that I have. Yeah? Tell us more about that. What's the loan for and what are they offering?

The loan for that, it's owed about $13,000 left on it. And what are they offering? They're offering a $500, $600 payout, but it has to be paid by the 30th of this month. $500 total? Yeah, $560 total. For your $13,000 car, for your car that you owe $13,000 on? Like a trade-in value? Yeah.

No, the car was worth almost $10,000, but the engine went bad, so I told them to just take it back. This was a couple years ago now. Okay, so they've taken possession of the car. Yes. And you've got something in writing that says if you give them $500 before the end of this month is over, they're going to wipe that debt clean.

I actually asked them to mail me a piece of paper stating that before I gave them any money because I didn't want to send them money that would not be true. That's what I want to make sure of is that you have it in writing, but I would tell you, young man, you can go make $500 between now and the end of May, and I would absolutely take that deal. 100%. I mean, that would be a massive deal, so go make the money. Yeah, clear that debt. Get it in writing. Yeah, I...

I made out of the budget and with this budget I can pay it on the 22nd. Good. So yeah, do that. Then we're still working on baby step one. And honestly, when people do baby step one, it's not just kind of waiting on the income to come. This is you getting down and dirty. You're getting into your house and you're selling stuff and you're picking up a side hustle. Most people get their baby step one in 30 days or less.

So the clock is ticking on that. That's really a challenge, so to speak, in order to get that done. And then once you've cleared this car situation out for a lot less money, you know, 500 bucks, you can't beat that. Then, yeah, it's working that debt snowball. And you read it in the book. It's listing them from smallest to largest. After that car situation is cleaned up, what's your next smallest debt? My next smallest debt would be my CDL school that I just got. What's that amount? $1,000.

If I can pay it off in six months, they say $6,000. If not, it'll be $250 a month until it's at like $10,000. Okay. Well, what do you make a month now? What do you take home every month? About $3,000. Okay. And of that, have you done your every dollar budget?

No, not yet. Okay, so that's your homework today. You get off the phone. Christian will pick up. Make sure you get the every dollar budget. I want you to plug those numbers in. Plug in your income. Plug in everything that you think that you're going to spend money on this month. And then look for ways to cut back. If you realize, hey, I've got a couple subscriptions in there. Or hey, looks like I do stop by 7-Eleven and pick up snacks. I want you to cut that stuff back. And once you cut that stuff back, now we see how much margin you have.

And when you see that margin, that's going to inform how quickly you can pay back the CDL. Because, yeah, I don't want you I don't want it to take any more than six months. But you having a clear plan, Ken Coleman says it all the time. You aim at nothing. You fail every time. Did I say it right? That's exactly right. And so let's give you something very clear to aim at. You know, you've got to pay this thing off in six months.

what does it take to make that happen? And how can you make that happen faster? So doing a budget is going to get you, you know, help you to see what that actually is. Does that make sense? Yeah. All right. Well, I think you've got a plan of action, my friend.

But happened to this. Yeah, he's got to happen to it. Like, I want to hear a little more gumption out of you because you've got a woman who you've been with for seven years and she's talking babies and she's got debt and you've got debt. It's not in any way something you guys can't take care of. But this is the moment here.

where you got to step up and be a man. And I'm going to define what a man is in a non-politically correct way. A man understands his duty. And he accepts the duty whether or not he likes it or not. That's fact. And you got to take care of your own debt

And you've got to model this for this gal so that if you guys spend life together beyond the seven years, I hope you get married, but I'm not going to push that on anybody. That's right. By the way, while I'm preaching, the data is clear and you guys can go Google this. Everybody likes to talk about fact checking in this political environment today. Fact check me on this. The data shows that you are healthier, healthier.

Emotionally, mentally, physically when married. And you have the opportunity to make more money when married. So this is not my opinion. So there's lots of data. I'm going high level here because I don't want to sound like the old guy saying get off my lawn. I'll add more data to that. But I think he needs to step up right now. More data to that. You're right. Not only do they earn more, they build wealth faster. And the data says that they are happier. No question. Like when they do the measure markers of what...

happiness means. People who are married and share their finances are happier. So there you have it. By the way, I looked up the cost of a Slurpee because you just made me think about it when you said 7-Eleven. Back in the day, I could get a large Slurpee for 99 cents. Now a large is $2.50 for all that sugary frozenness. ... ...

All right, Dave, you have some strong opinions. Possibly, yeah. I think so. Okay, because you really prefer credit unions over big banks. Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own banks.

the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union. So I find very few credit unions that aren't very customer-centric. Well, and I think we have found one that is incredible, and that's Fairwinds.

They are an incredible credit union that is really out with the heart to help the customer. They're the right kind of people with the right kind of values. And they've done a really, really good job with customer service. And the deals that they're offering, the Ramsey Tribe is incredible. Yeah, absolutely. And I love it. The things that we teach, they so line up with. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account. And I'm not kidding. It took less than five minutes.

It was so user friendly, like the step by step approach was unbelievable. And then the next day, my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience. And I

I so, so appreciate that. Plus, anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs. Hey, you guys know how much I hate banks in general. And so for me to do this is a big deal. Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe.

You guys are just incredible. Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org slash Ramsey. Fairwinds is federally insured by NCUA. Okay.

Okay, so we talk about a thing called the baby steps here a lot. The baby steps is the plan that we find helps people get to financial peace and wealth building in really the best, fastest, most peaceful way. So if you hear us talk about the seven baby steps, that's what we're talking about. And if you're wondering, hey, am I in the baby steps? If I am on the baby steps, where am I in these seven steps? You can take a quiz to check your progress. And not just that, but we'll give you a personalized plan

That's just for you. So if you want to do that, if you're interested, you can simply head into the show notes and you can click on the link that's titled, Are You On Track With The Baby Steps? And you can complete that quiz if you are interested. All right. Saying less, let's go to Eric in Los Angeles, California. What's up, Eric? Hello, guys. Can you guys hear me? Yeah, we can. What's up? Yeah, so I'm in a bit of a predicament. So essentially, I'm looking to see if

whether I should get married sooner than later than I thought. Ooh, I like these. Ken loves these questions. I love these questions. Okay, you've got to give us the case. You've got to lay this out for us. Because you're getting a great female point of view and maybe a decent male point of view. We'll see. Give us the reasons why you would get married sooner rather than later. Give us sooner first. Okay.

Sooner because, okay, so sooner is kind of like an unfortunate thing. So me and my, well, I'm engaged already. So me and my fiance are kind of in a predicament where she's in the process of transferring schools from CUNY College to a four-year university.

And she's applied to various safety schools and like a target school, which is like one of her dream schools. And we're waiting. We've heard back from safety schools that she can get into, but the dream school she's still waiting on. And our issue is,

She lives in a home where her father is very against school. Like he has a very traditional mindset and he's essentially telling her and has threatened her that if she doesn't go to her target school or if she doesn't get in, she can't go to school anymore. That's interesting. Okay. How old is she? We're both 21. And he's paying for school? He's the moneybags? Yeah.

No, she's been doing it all on herself. Okay, well, he has no say in that. That's easy. Literally, he has no say. I'm not sure. I get the reason for the threat, but that doesn't make us have to move up the wedding date yet. I haven't heard any evidence for that. So that's one reason, right? That's the primary reason to move it up. All right, what was the actual date of the wedding that we were planning on before this phone call?

Well, the date we were still on, like figuring it out, because I finished school in not this May, but next year, May. And so she'll have a little more time to finish school like a year later. So around that time. So May of so so summer of next year is what you were initially planning for.

Summer of next year or the end of is this grad school for her if she's already in school. I'm trying to catch up here. Is she is this about a grad school situation undergrad. Oh, she's never gone. She's 21, but she's never gone to college.

No, she's in community college right now. Okay, so we're talking about, that's right, you did say that, moving from community college to college. Okay, and so if you stick with the date that you guys have, the pros of that are very obvious. You just laid them out. What are the cons to moving up the wedding? Because I'm assuming you think the pro is get her out of the house with dad, and she doesn't feel that threat as deeply, blah, blah, blah, blah, blah. I get that. But what would be the cons, the negatives to moving the wedding up?

So I have debt about since I took a pawn at university. And since I'll be like, it'll be my last year in school. I don't know if I'll be able to like provide for like, like an apartment. Cause you're both living at home now. Yeah. Yeah. Okay. I get it. I get it. Unless I'm missing something, Jade and Eric. No.

um, your, your wife to be is going to have to put her big girl pants on and, uh,

Tell dad you don't get to make that decision, number one. And if it gets so uncomfortable that she doesn't feel, and I would understand this too, not being in the house with him, she's got to come up with some arrangements. But we don't want to rush everything and put you guys in a desperate situation in order to avoid an uncomfortable situation. That's how I'm seeing this. And it's all her. And I understand why it's uncomfortable. I feel bad for her.

But she needs to fix that. She either says, Dad, go pound sand in a very respectful way, and then he gets over it. Or if it's going to be so uncomfortable, then she goes and lives with a girlfriend or two or three, and we wait and clear up our debt. We make the transition to education and all of that. I just think, Jade, that...

I'm going to say it. I already said it. I think it is a bad idea to put yourself in a desperate situation... You're right. ...to avoid an uncomfortable situation. You are so, so right. And I think that there's...

A level of drama in how we're speaking about this, which I think can add to the pandemonium, so to speak. So y'all were using the word threat. Like, he's threatening. And I'm like, when I hear the word threat, my mind goes to, is somebody in danger? Is something going to happen? Do I need to get below this desk? Is that what needs to happen? When really it's just a middle-aged man saying, here's what I want you to do. Right? Is it just that? That's a good point.

Well, I mean, okay, so I forgot to mention, so they have a business, a family business. Okay. And he wants to her, like, let's say she doesn't get into the school that she wants to. He's like, he wants her to just pack up her bags and go work for him for the rest of his life. Because right now, she puts in, like,

easily like over a hundred hours working there. Yeah. Yeah. That's what's going on. He just has a plan for her life and that's not her plan. You nailed that. Has she told him that she doesn't want to work for him under any certain circumstances? Yeah. And he, well, last time he mentioned it to her, like he didn't talk to her for days. Well,

Wow. Well, but that's his problem. Truly. It doesn't change my advice. Let me tell you, let me give you a, I try to give real time and real examples from real life. So when I was in school, I was dating a guy and, you know, my dad, he didn't dislike the guy, but at the same time, he didn't like how much time I was spending with the guy. But I'm like, I'm in college, I'm grown. And so during summer break was really when it kind of started creating some tension. So do you want to know what I did?

I moved out and I rented. This is bad. I mean, it's not great, but my friend had an apartment. It didn't have an extra room. So I said, how much would it cost me if I brought my futon here? And I just slept in the living room on the futon and it cost me like 300 bucks a month. I mean, this was back in the day. I don't mind that. And I did that until it was time to get married. Good for you. I think that's great. That's exactly the advice that I'm giving.

I 100% love that example. Yeah. You were like, all right, Pops, if you're going to have a problem with the dude, I'm going to remove myself. And it's not even that he had a problem, because I'm married to Sam now. It's not even that he had a problem with Sam. Yeah. I mean, I just was framing it up in a way. He had a problem. I was just spending a lot of time.

out of time with Sam. He was just having a daddy problem. And dad was having like... He was having his own issue. His own issue. It's not your issue. It's not my, you know, I was flying the coop. You know what I mean? That's what's going on here, by the way. Exactly. Dad, you said it, has a plan for her life. Yeah. And she has to remind him that the last two words in that sentence are her and life. Yes. And that's tough. And by the way, you have to stay out of that, Eric. Yes. She's got to handle that.

But I would not rush the wedding. Please don't rush the wedding. You yourself said, I can't afford to do what we need to do. And boy, oh boy, I'm going to say this. Jade, weigh in on this. The first year of marriage, in my opinion,

Okay. Is the hardest year of marriage. Wild, wild west. Because you get into it going, oh, this is great. We come off the honeymoon and we've been in love. And then you got two individual people coming from two different environments. Yes. And you're smashing them together like a smash burger. Bro. And it's tough. And I would not want any first year couple to have any financial stress if they could keep from it. I think that that is...

Yes, 100%. If you can avoid it, do it. Don't add to it. And a word for the dads. You know, dads, they love their daughters. And sometimes they don't know how to show it in the most sensitive ways. And sometimes they result to control a little bit. Hold on. Ouch. Ouch. Those are my toes being stepped on. They don't mean any harm.

They just don't know how to say, I'm sad that I'm losing you. And they start holding on too tight. We don't do well being, we love being a girl dad, but we don't know how to handle it. Yeah, it's tough, man. It's hard. I don't envy you, Ken Coleman. That's my princess, man. This is The Ramsey Show. ♪

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You're listening to the Ramsey Network, and this is the Ramsey Show, where we take calls about your life and your money. If you didn't know, we take these calls live. And if you want to get on the show, you can call 888-825-5225, and we'll get you on. I am your host today, Jade Warshaw. Your other host for the day is Ken Coleman. And if you don't know, Ken Coleman and I, we keep it real. We have a good time together. So let's take it straight to the phone lines, Ken, where we have Jay in Atlanta, Georgia. What's up, Jay?

So my wife and I are debt-free other than our home. And recently my grandmother passed and left us a small inheritance. It was about, after taxes, roughly $70,000. Her wish, her wishes were that she wanted to leave her legacy with going towards our children's education. I have a sixth grader and a third grader. We've been funding their college funds since the beginning of

My sixth grader has roughly $75,000 in his. My third grader, she has roughly $60,000 in hers. Wow, good job. And the question is, though, would we be better off? I mean, I want to honor my grandmother's wishes, but would we be better off paying down our house? That's the last debt we have. That's kind of where we're at in the baby steps, trying to get the house paid off. Yeah. So did your grandmother, she clearly didn't know that you had college covered. Yeah.

When she said this in the will is the guess, right? Well, I don't know if I have college covered. I guess that's my secondary question. Like, when is it enough? You know, like, when do you have enough in their college funds? We're continuing to contribute to their college fund every month as part of our budget. Have you played it out to see what it will be when they reach 18? Yeah.

Yeah, I can't remember exactly what it was, but just, I mean, on the rough numbers right now, right, if it doubles every seven years, it's 150 and, you know, probably 150 for each of them, maybe potentially more, I think, but people will continue to contribute. So if that's enough, then if we're already in the... And again, I know education costs could change. I get all the other items. Well, there's charts out there where you can play it out and see. So let's...

put some real meat on the skeleton. So let's pretend you said you're in Georgia. So let's pretend that they go to a state school, which is what we would recommend here, going to an in-state school, assuming you still live in the state of Georgia. And so now it's like, okay, they're in sixth and third grade, right? It's hard to know who they're going to be coming up. But let's just conservatively say, even if they chose Georgia,

Like the most popular state school in Georgia, what would that, what does it cost today? And let's use a chart to find out what it would cost in the next six years, you know, to find out what this is, or the next 10 years to find out what this is going to be, right?

And so that's how you would play that out. And then you go back and look at the account and find out, would there be enough? So that's the game that I would play when I get off this phone. I have a fun curveball. What's that? Can I jump? Is it okay? What if they don't go to college at all? No. Oh. What is the amount total that you're putting away each month for both kids?

We're splitting it $500 a month is what we're doing, $500 a month split between the two of them in our budget. So how many more years for your oldest –

child would we be contributing how old again he's in he's in sixth grade so six more years for him and then it'd be nine more years for mine for my daughter okay so we're talking what i would do is i'm trying to back into this and i'm not a mathematician but basically you're doing six thousand dollars a year is what you're putting away for both kids correct

Yes. So you've got how many years left? Six more years for your son? Correct. Okay. And then the third grader, what, nine? Nine years. Ten years. Nine. But I'm splitting that between the 500 and split between the two of them. I know. Okay. But here's my point. If it were me, I'm just throwing a curveball out here. Hit it. I do not mind either one of you pushing back on this. I would take the $70,000 because it's really darn close to what you're going to contribute over the – the difference is not that much.

as to what they're going to contribute at this current rate, if I'm not mistaken. So I would take the $70,000 from Grandma, and I would use that. I would go ahead and put that in each one of the kids' funds, and then I would start using the money you've been putting in out of your budget, and I would just start moving down the baby steps from there. That's what I would do, because I think it's going to come out. Put $500 a month extra to the house. Yeah, because I think then you're honoring Grandma's request, right?

And you're creating, it's still cash flow. It's still the same. I mean, it's six of one half dozen another, but you're honoring grandma. Yeah, it's 60,000. But go ahead and put it in now. So go ahead and put the 70 in now. Yeah. And you're going to get the greater investment return on that.

You see what I'm saying? Yeah, because it's a chunk. And then from day one, let's say you put the $70,000 in now, then you guys start taking that $500,000 a month and you start using it towards paying off the house. That's what I would do. And that way I'm honoring grandmother. I'm getting the benefit of that investment by getting that $70,000 in now and early as opposed to $6,000, $6,000, $6,000. Yeah, yeah, yeah. You're right, Ken. That's what I would do. I'm not opposed to that. It makes sense.

It makes sense to my question, and you're afraid you're going to leave yourself short. Is it enough still, I guess? I guess that goes back to the calculator question. It does, but I would also say, I'm channeling Dave right now, that Dave Ramsey, when he'd go, what you have is going to be enough. Yeah, because you set the budget, my friend, and what you have is the budget. And the kids go, this is what we have. And so if each of them have 150, I feel pretty confident they're going to be able to get educated. Yes. Yeah.

Thank you very much. Yeah, that's a good question. But they don't have an unlimited number. They don't go, well, Dad, I want to go to Harvard, and it's $80,000 a year. You can go tough cookies. Or you tell them to figure out where is it coming from. Well, the hope is if they went to grad school, then there would be enough to carry on to a graduate degree afterwards or something if you could continue to fund it more. Okay. Then, again, you can choose to keep doing the $6,000. Yeah.

Yeah, you can. Per year.

I think the biggest piece of this responsibility is not financial. I think the biggest piece is that communicative part of it, where we're saying, here's the expectation. Here's what mom and dad are going to do, but here's what child, what you do. And we're having that conversation early and we're having it often. So they're not going to wake up one day at 16 or 17 scrambling, trying to figure out or learning, Hey, I have a college fund, right? It,

we're talking about this probably from the time you hit freshman year of, Hey, college is coming in four years. Your mother and I are saving. We don't know what school you're going to end up with, but just know if there's a deficit, you're going to be on the line for it. And even if there's not, you're applying for scholarships. I expect, you know, depending there's going to be some work aspects on your end. And so really clearly setting that guideline, uh,

I think is the most important part. I think so. And so just a quick review here. I would, I'd put the 35 in each kid's account today, 35 here, 35 there. Yes. And I'd talk with the smart, your smart investor pro, the person you're using and go, let's play this out. Let's do our best calculator guests or amortize this, whatever you want to call it. And now we can look back and go, okay, based on this new 35 and 35 in each kid's account, um,

What's that going to end up being? And I believe it's going to take one of the kids to 120 and I think the other one 90 something or somewhere in that range. So I mean, it's seventy two thousand dollars for the 10 year spread for the six year old and the nine year old if they keep putting in what they've been putting in. Yeah. So you got options. But I would honor grandma's request. I wouldn't take her money and put it towards the mortgage. I feel gross about that.

I agree. Especially, it would be one thing if you already fully had education covered. Yeah. But with what you've said you want to pay, you don't have it covered. So I would put it towards. I agree with Ken. Let's get that mass sum in there right now. Let that start building. I know that's right. And yeah, you're right, Ken. Yes. Wow. Somebody write it down. Ken is right. I need to call my wife and daughter immediately and tell them. Hang on. I'll be wrong later.

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Let me say that again. That's the letter. Y-R-E-F-Y dot com slash Ramsey may not be available in all states. All right. Today's question, Jade, comes from Declan in West Virginia. I'd like to say that I think Declan's a cool name and I kind of would like this on Declan Coleman. It's very strong. I think I could pull that off. Yeah, that's good. You think? No? I think. Not sure? No, you can't pull it off. Sorry. Kelly agrees. Kelly's like, not happening. Yeah.

No, no. I think you're right. That's why I said it. I knew it was going to be funny, and I want to admit that I don't mind being the butt of a good joke. Oh, yeah. And I don't think I could pull that one off. But back to Declan's question. I see so much on social media these days regarding how well everyone is doing, and I wonder if I'm doing okay. Oh. Oh.

I pay $1,100 a month for rent. I have $900 in monthly expenses, including student loan, personal loan, cell phone, gym membership, and utilities. I don't spend much on food. No joke. Maybe about $750 a month. I rarely buy anything for myself. After taxes, I bring home $2,500 every two weeks. So he's got $5,000 a month he's bringing home. Why do I feel so behind? Well...

I think the first and the biggest reason is because you're spending too much time

focusing on other people's big wins. And so when I'm watching everybody else show off their car, their house, their shoes, whatever, whatever, as you describe, then I know from science and we know this from neuroscience that whatever we focus on, that's all we see. And so all you see is everybody else is crushing it. And I'm over here in West Virginia just trying to make it through a month.

And I think that's why you feel behind in the grand scheme of things. I don't think you're terribly behind. I don't either. And it sounds like you're young.

And, um, uh, my partner here in crime, Jade, there's another reason why he feels like he's not getting ahead too. Well, I can see it in the question. You can let, let me, before I do though, I, this popped in my mind and I'm just going to say it, you know, there's the scripture that I think of where it's like, Hey, you were running a good race. Like what stopped you from, you know, going forward. And it talks about giving careful thought to the path of your feet.

And it's so easy with money. You're running your race and it's easy to look over into somebody else's lane and be like, ooh, what are they doing? And it's distracting. And you're supposed to look at your path and your feet and not get distracted. So I just want to remind you that your race is your race to run. Somebody's going to be making $10,000. Somebody's going to be making $5,000. Somebody's going to be making $40,000 a month, right? But your race is your race and there's no shame in that game. You're not racing them. You're trying to get your best time. Yeah.

And it's you against you. So just reminding of that. Now, he says, I don't spend much on food, maybe $750 a month. I rarely buy anything for myself after taxes. I bring in $2,500 every two weeks. You know, I think that he's...

If you feel that you want to increase your income, that is your prerogative. And if you feel that that is what's hindering you from going faster, you would be correct in that assumption. And I think that there's room for you to improve on that, but not because of what other people are doing, because of what it is that you want to do. What we can't see in this question is what are his monthly payments? We do know there's debt. Yeah, we don't know. And so if you were to take those monthly payments, and I could take a guess,

just looking at that situation, he may have somewhere between $300 and $500 a month. Might be more with the car payment. Does he have a car payment? Student loan, personal loan, cell phone. He doesn't mention a car. Okay, good. So my guess is you could give yourself anywhere from a $3,000 to $5,000 raise, not knowing the actual specifics here.

That combined with I want to bust it to work. But again, Jade makes the best point here. What's the life that you want? What's the future life you want? Not the life that everybody else has. He also doesn't say how old he is. Yeah. Which there's another piece of that. Oh, I've got to point this out. And this is going to sound so old man Kelly, our young millennial or Gen Z producer. Well, dang, I feel like.

Chopped meat over here, Ken. No, no, no. But listen. So here's what I saw something. I saw this recently. She's the young one. I saw that these influencers that are showing all this stuff where they're traveling around the world and they're staying at these nice hotels. It's all a ruse. Bro. There's four or five of them splitting the cost and then they shoot their video. Yes. I didn't know this. It's never real. What you see on social media is so not real. Yeah.

Yeah, so- You never know what's behind the scenes. That really burned my biscuits, I'll be honest, because I was like, they're lying to a bunch of young people, and they're all splitting the cost, and none of them own anything, and they can't afford to stay in the hotel. I don't know- Or drive the car. And they're like renting a private plane, and like six of them are shooting videos of

So I'm just pointing this out. Like the stuff you see on TikTok and Instagram, I hate to be a conspiracy theorist. Where's Rachel Cruz when you need her? I think it's, I think, I wouldn't believe anything I see out there. Ken, you don't even need to go to extremes. Like you're talking, I mean, you're talking about like nice resorts and private planes. I just see families at Disney. Yeah.

I'm like, how? How, God, how? Oh, well, credit cards. Yes. And so that's my point is, yeah, you 100% cannot compare yourself. Now, let's have this quick conversation, Ken, because I think it's worth having. Okay, great. I was talking to a guy about this this morning. Let's talk about comparison with money. Okay. Because I think there's two things

types of comparison. One is good and one is bad. One is comparison for inspiration and for ideas. Yeah. You're looking at other people and going, oh, they're doing something that I'd like to do. That'd be a debt-free scream for an example on the show. You'll watch the debt-free screams because you go that I want to be where they are. Yes. I look at Beyonce. I go, she's my same age and she's amazing. I want to be fabulous too. You are fabulous. You know what I'm saying? Like

but that's what I'm saying. You're looking for inspiration. You're looking, it's not making you feel bad or less than it's making you feel great. Yes, of course. Anything's possible. Then there's a comparison. That's the bad side. That's, Hey, everybody's doing this. Why can't I, am I bad compared to this? Is this better? And I'm not meeting the bar. And so really knowing how to shift that from the negative comparison to the positive comparison. And I think Ken, the way that you shift that is by asking the right questions. Um,

And now I'm going into your lane because you're the question asker. But when you're looking at what other people are doing and you're just internalizing it, saying, oh, how did they get that? Should I be doing that? No, take it outside and go, hey, you know, how did you make that business plan? Where do I want to be financially in 30 years? Let's start there. Yes. What do I want to bless my family with financially? Yes. Where do I want to live financially?

Yes. All the things you start asking those questions that becomes very personal to your point. And now this young man, Declan, with the cool name goes, all right, this is the vision for my life.

And I'm going to have to do this, this, this, and this to fund that. And you can ask those people. You can ask the people that you see doing the thing. If you have proximity to them, there's nothing that's stopping you from saying, hey, you know, that job you had, did that require, what education did that require? Right. You know, I see that you're, you know, winning in this way. Are you using someone to help you with your investments? Who do you use? Ask questions because then you're being curious. You're not being, you know,

You're not having a bad comparison. And I think you're making a really good point. You've got to want it for you and for good reasons, not just because you go, well, it sure would be nice to have a private jet. Right. Or whatever you're seeing on social. Exactly. And you make a very good point. I went kind of the influencer route and what we see. But just everyday people are out there putting their best foot forward. And what you don't know is they're dragging along a $1,200 car payment behind that new nice car. Man.

And I mean, look, you and I park next to each other in a parking lot. I think people would be astounded to know what we drive. Our cars. We drive nice cars. They're just old. Well, they're older. Older, yes. But they're nice. I think so. And we pay cash. You know why? Because I'm...

I got three kids on the payroll. I know. That's right. And I got them coming up. They're coming up the pipe. You're just getting ready. Your expenses are low. I know. I know. Until that boy of yours eats a carton of eggs in two days. Listen, they're getting there. Let me tell you. So Zia's daycare, I never say her name online. I know. I know. That was a slip. You saw what I did. I stayed away from that. Uh,

Pretend like you didn't hear that. So my daughter is daycare. She stops daycare and goes to kindergarten. And let me tell you something. That's a cool $1,400 back in my pocket. Oh, man. I can't wait, man. Weekend trips. Now maybe I can go to Disney. You can. You can.

Thank you.

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So

If you are listening to this message, it means that you are a listener of The Ramsey Show, and we're so glad that you are. And we're hoping that you're enjoying, you know, the advice that we give and the messages that we teach. And if that is the case, I hope that you share it with somebody. I hope you tell them, hey, there's this really cool financial podcast or this really cool, you know, YouTube show that I listen to, and you'll love it and share it with the people that you love and that you think could use this advice. And, you know,

Make sure you share it in a positive way, not your finances look a mess. You could probably use this show. Make sure you share it in a nice way. Off the top ropes there. Yeah, you don't want to do that. So just slide it into their DMs or, you know, hit the little paper airplane button or, you know,

copy the link and paste it into one of your text messages. We would really, really appreciate that. It's helpful for us and it helps spread the word to a lot of people who could probably use the help. So for anybody over the age of 50, slide into their DMs just means send them a direct message on social media. We got to explain things like that. That's correct, Ken. You're right. I'm looking out for my people out there. Thank you. We need that. Sia is in Seattle, Washington. Sia, how can we help?

Hi, glad that you are taking my call. I own two houses. One of them I just bought recently at $1.2 million. I put down just 25% down and I mortgaged $900,000. Okay. Now, my first house...

That is $850,000 worth, $150,000 remaining on the mortgage. The rate on the first house is 2.7%. That makes monthly payment of $2,000. Now, the question is...

Is it better to sell the first house and pay the equity toward the second house so that I can have lesser or smaller mortgage payment monthly? Or should I rent out the first house and pay the rent difference toward the mortgage of the second house? Because the rent difference is about $2,000 a month.

Because it could rent out about $4,000. Okay.

Keep going. If I make $2,000 from the rent difference, that rent difference can go toward the mortgage of the second house and the rest I can pay through my income. Which one is a better investment pathway forward? Let me ask a couple of questions. Is this your only debt, these houses? This is my only debt. This is the only debts out there. And what's your income?

I make around $350,000 a year. Okay, $350,000, Seattle, Washington, these two houses. Right now, which one are you currently living in? I live in the new one that I just bought. The $1.2 million one? Yeah, the previous one is being painted, getting ready for rent, but I'm just not sure should I rent it or should I sell it. How much do you owe on that first house, the one that you're getting ready to rent?

I only, I owe $150,000 on it. What's it worth? The market is worth $850,000. Okay. And then you've got a $900,000 mortgage on the one you just bought. So you're more, let's kind of like frame up how we're viewing this because you're viewing it more on the monthly payment, the rents. I'm viewing it more on total debt. Ken, how are you viewing it? Yeah, same way. I mean, to really burst your bubble, yeah.

That rental opportunity is not as exciting as you think it is. Yeah, I agree. And it's also not going to be as effective as you think it is. Let's take the $2,000 a month that you're saying you're going to get in profit. Well, that's not what you're actually going to net when you talk about expenses of taking care of the home. You're the landlord on that deal. You still own it. You're going to have expenses. You're not going to see $2,000 a month.

I feel like there's easier ways to make that money. Yeah. And so you're going, well, I'll take that and then I'll put it on my new mortgage. I just don't think you're going to make the progress that you want. And so, yeah, I'm seeing it the same way you are, Jade. I go, all of a sudden you've made yourself a landlord and you've taken on a really, really high mortgage. Now you make good money. Okay.

You make great money, so you shouldn't be in a burden there. But what's the point of keeping the first house when you could sell it and put a huge chunk and almost completely cover or get yourself really close to be able to pay that new house down pretty quickly? And that would be the play for me. I mean, you could do either. So right now you've got the $850,000 house. You only owe $150,000 on it.

Correct? Only a $150,000. So if you sold the $1.2 million house, you could clear that. Yeah, but he just bought that. That's not a smart move. He just moved into that one. That's true. That is true. I mean, that's where you want to live. That's your primary. That's what you guys are excited about is your primary home going forward, long term. Considering the inflation and the rate going up, I was just thinking if keeping the house, the first house, if I keep it, next year this time is going to be worth $100,000 more.

I understand, but we weren't discussing that. I'm saying the house you just bought, $1.2 million house, is that your long-term play? That's where you all want to be long-term? That's right, yes. Okay, so then if that's the case, then you sell house number two. You clear, I don't know, how much do you think you'll clear? $700,000 off of this?

$685,000? $650,000. Okay. And you take that, you throw it at your $900,000 mortgage, and then your cash flow and the rest to pay this thing off. That's what I would do, but I have a sense that you're...

You got into these houses for a reason. Was it just, was it to make money in real estate or did you say we lived in one house, now we bought another house and now I just happen to have these two houses? We just wanted to move to a better neighborhood. That was a better school. Okay. So you didn't set out to be a landlord? No.

No, I didn't. It turned out that way. So I was just thinking if it's a good investment, maybe to keep it for retirement age. I wouldn't. So then you have to ask yourself the question. This is kind of a Dave Ramsey question. You have to ask yourself today, if I lived in this...

a $1.2 million house and I only owed 350,000 on it. What I turn around and say, I'd like to have a rental. Let me go over here and buy the same exact house, house number two, and spend 850,000 on it because I want to be a landlord. Would you do that?

Probably not because I would buy a cheaper rental at that point. Exactly. So that's kind of a way to flip it around and say, is this really the decision that I want to be in long term or did I just end up here? And is it something that I honestly want to get out of? And I think it sounds like something you want to get out of.

Yeah, and I'll use your own logic really quick, Sia. You said the very first home you had that you're planning to rent, you said, if I hold on to that another year from now, it's going to be worth another $100,000. And I'd say, well, the same is probably true for the new fancier, nicer area house you just got. So that's why I would put my money, I would divest of that house, I'd sell it, and I would do what Jay told you to do. And now we're on a track to pay that really nice house, our much nicer house off.

And it's what you want to be in. Yeah. I could pay that off a lot faster. Oh, yeah. With that income especially. Again, that's what we would do. Okay. I really appreciate it. Thank you very much for taking my call. You bet. That's a great call, Sia. I like that one. All right. Let's take a social question, Ken. Oh, I love the social questions. And this guy's name is Kenneth. Kenneth.

This is a good man. I can tell you he's a distinguished gentleman. I can just tell you. I can just tell you that. He says, I have a sum of money coming in that would either pay off both of my credit cards or my 401k loan. Which would you recommend that I pay off?

Well, we're going to go with the debt snowball. So which one of those is, so we lay them all out. What's the 401k loan? What are the credit card loans? And I'm doing it for momentum. I'm going to play the snowball the way that we teach it. Interesting. I'd go the 401k loan first. There's a couple of things that I'd put top on that list. That's fair. I have a caveat on that.

Okay, tell me your caveat. If it's a onerous loan and it's really costing a lot of money and he can wipe it, then I get that. Yeah. 401k loans scare me because here's the thing. And to your point, if it's a big loan, if you lose your job, that thing becomes paid like due in full within 12 months of you losing your job. I'd like to know the terms of that deal. Yeah. But I'm always going to go the snowball for momentum purposes is where I'm always going to default. I like it.

Buying or selling a home is a really big deal, guys. And you do want an expert in your corner, someone who is fighting for you to find the best deal for the right price. And luckily, the Ramsey Trusted Program is the only way to find a top agent that you can trust. They're going to help you make your home a blessing and not a

a burden. And I'm telling you, it's easy to just compare these different agent profiles. It's easy to interview them and ultimately choose the one that's going to work for you, which is what I like about it because at the end of the day, you're the one making the choice. We're not just assigning someone to you. You're still interviewing them and you're still getting to choose. We've just vetted them to make sure they're worth choosing. So find a local Ramsey Trusted Real Estate Pro for free at ramsaysolutions.com slash agent.com.

Or click the link in the description if you are listening on YouTube or podcast. All right. Love that. Let's go to Rachel in Dallas, Texas. Rachel, what's up?

Hi, y'all. Thank you for taking my call. You bet. How can we help? So my question is, should I pull out of my savings or stop paying towards my debt in order to buy an RV for me, my husband, my one-year-old, and our two dogs to live in? Why do we want to live in an RV?

So my parents are home flooded in 2023. Oh, no. So my husband and I, we had a two-month, well...

We had a baby baby and we needed a place to go. So my parents had just finished building their house. And while they were building their house, they lived in an RV. And so they had an RV for us to live in. So we moved into there. Now my parents are both retired and they're wanting extra money to

And so I just feel like us moving out of this $40,000 RV would be very beneficial to them. Now, while we're living in this RV, we've been able to save and pay off some of our debt. And so we want to continue doing that. We're not really ready to go and rent again. So we've discussed with my parents.

Maybe us buying our own RV and... Giving theirs back. And then be able to sell theirs. Yes. What would the cost of the RV be that you guys are thinking about buying? Well, so I'm not really sure. We have $2,500 in savings, which isn't a lot, and we still have $40,000 in debt. Mm-hmm. We...

We're paying off our debt, so our savings isn't going up much. So I'm just kind of stuck on, do I ask my parents for us to continue staying there? I'll be honest, my dogs are kind of tearing up their RV, so if I could get us out of there sooner rather than later, that would be my... Why aren't you ready to rent? That was the statement you made. We're not ready to rent. Yeah, is it the cost?

Yeah, we're just really proud of our progress on paying off our debt. Yes, but you are too. You got to run the numbers on both sides to see if this is going to work. So you said you've got and you've got to consider the time frame too. So you said you've got $40,000 of debt. How much do you have to put onto that debt to clear it in the time frame that you're thinking? And what is the time frame that you're thinking? Okay.

Well, at the rate we're going, so some of it's school loans. So we're kind of leaving that out. No, no, don't leave that out. That's that's the one you want to get. Listen, Sally Mae stops for no one. So you don't leave that out. That's part of the debt snowball.

Yes. As far as my timeline, I'm kind of leaving that out. We have my husband's car. No, and I'm telling you straight up, don't leave it out, Rachel. Don't leave it out. No, ma'am. Okay, and you know what? It's still accruing. It's still accruing. He still has two years left of school. And you're still taking debt for it? So you're still actively going into debt? There's still loans coming.

coming from it. I think there's three loans on it. All right, Rachel, I've been very, very patient. We're having the wrong conversation. So I'm going to answer the question that you asked, okay? No, you should not stop paying down your debt to buy an RV. You have no idea what the RV is going to cost. You only have $2,500 in savings. You're more than $40,000 in debt, and you're presenting to us as though you can't even afford to pay rent, which isn't true, which is where I want to focus our conversation. Yeah.

The bottom line is, is your dogs are tearing up your parents' RV. You guys have outstayed your welcome. They need the money. So what I want to ask is, what...

Does your husband and you, what's your bring home income, both of you, because I want to come up with with Jade, how much you can actually afford and rent, because that's what you need to be doing is going and renting and then taking your time and going as fast as you can go on paying off the debt. But buying an RV, you don't have the money. Were you going to sell something to get this? Or what was your thought? Yeah.

No, we were going to... Finance it. I don't know what our job was. I know what you were going to do. Yeah. No, because you don't have any money. So therefore, you were going to justify getting an RV, which if you really want to get our blood pressure high, is when people ask us about buying RVs because it's a complete and total waste of money. So let's go to tell Jade what your take-home income is so that she can help you figure this rent out.

Yeah. So I bring home $70,000 and my husband brings home about, I don't know, he makes $11 an hour. And this is a newer job because he had to change jobs so he could be closer to my home state care. Tell me every month how much money you guys see in your paychecks. That's an easier question.

Um, so he gets paid every other week. His are about $700. So he brings home about 1400 and I bring home, well, I have our insurance and I have, you know, 401k. I bring home 1800 every two weeks. So what is that? 32? Uh-huh.

Okay. Yeah. So you guys have 5,000 bucks a month and you've got 25% of that, that you can spend on rent. So you've got 1,250 bucks that you can spend every single month on rent. So that's your starting spot. Now you go, I almost said, look in the paper or look in the yellow pages. I don't know what hit me, but you go and you find a place. Yeah. Let's explain what that is to some people. People,

old I really am. I know. You go and find an apartment or something, a rental, a townhouse that you guys can stay in that'll take your dogs and that's $1,250. That is the barrier because if you go beyond that, it's going to be really tough, Rachel, for you guys to make headway on your debt. So that's the game plan. Yes. So there's your number. $1,250 is your max, Rachel. Maximum. Okay. Now, I want to know

If Hubs is working another job or two or open to working another job or two, because $11 an hour, he's capable of bringing in more money and he needs to be, especially when we're paying off debt. What's the story?

Yeah, so we moved to a smaller town when we moved in with my parents. And so we were looking for a job for him that's close to my son's daycare because I have to travel over 60 miles for work. Oh, I got a great idea. Why don't we move closer to your job? Now you don't have to be in the RV. Oh, and by the way, it's probably closer to civilization I'm gathering, which means there's better jobs. I'm gathering.

Yeah. When will he be eligible? This is great. It sounded like he was still in school because he's accruing loans. Is that right? Yes. Yeah, he's doing online schooling. For what? So when will he make more? Well, his degree is in marine biology. In Texas. It's George Costanza. All right. All right. So is there a pathway that he's going to make that money? To get him near the marine biology? Does he know the pathway for that?

He has no pathway. No. Okay. He doesn't know the pathway. He needs to pause on school. You all need to move.

And get to a better place where you're not driving as far as you're driving with a little one. That's adding a lot of stress to your life. It's going to be a better job market for him because it's near civilization or in the middle of civilization. And he needs to be making $20 or more an hour, period. End of story. I don't care what he's doing. And yes, he needs to press pause on pursuing a degree because you guys can't afford it. And you're taking a loan out without a path to doing marine biology work.

Now, I'm not in any way crapping on the dream or trying to be tough guy or get off my lawn guy. But right now, where there is no path, we shouldn't be doing something. And so let's press pause. The marine biology degree will always be there. But you all need to get your income up and change your lifestyle.

That's... Yeah. Sorry. I know that's not fun to hear. It's not, but Ken, I think you're exactly right. There's a lot going on, and if they can just focus in one direction, a clear direction where there is a path forward to your point, you need to go that direction. And so $1,250 a month in a rental that gets you closer to your job and allows him to find work as he pauses education for the time being until he finds a clear path forward.

Go on now.

Don't make it weird. Okay, I got nowhere to go, so you need to go. Okay, bye-bye now. All right, this is getting weird over there, guys. What do we do?