00:34:59

(someone): That way if an opportunity strikes or you want to buy something or whatever it is, you'll have that money ready to go. And you've got great rates right now with those high-yield savings accounts.

00:35:07

(someone): Yes, I've been looking at them, the CD rates and all that, put in there for a while. I really appreciate you, so I'm glad. I'm going to go pay my house off next week on my retirement.

00:35:16

(someone): Linda, that's amazing. That is so fantastic to be retired and no house payment. And that's a nice little chunk of change you get to decide what to do with. And George gave you some great advice.

00:35:29

(someone): These are the fun problems we get to grapple with, Ken. Is Linda out there?

00:35:34

(someone): Yes. Linda, what is one fun thing that you think you'd like to do now with this extra margin?

00:35:41

(someone): Is it one thing?

00:35:42

(someone): No, no, one fun thing. I don't want to put pressure on you to say one thing, but what's one fun thing? George gave you some great advice. Celebrating this milestone. Two milestones. What do you think you want to do?

00:35:55

(someone): Oh God, I don't know. I'd probably go on a vacation somewhere. There we go.

00:36:00

(someone): Where are you going? What's on the bucket list?

00:36:02

(someone): I would think Paris, France or something like that would be fun.

00:23:44

(someone): George, we got it, we got it.

00:23:46

(someone): Sarah, I want to be realistic. Based on your income right now, this dream is not going to happen. It's not going to happen. Based on your income right now, we would need to increase this by a whole lot, and I want to think about how does Sarah retire one day? Let's just say the restaurant doesn't happen. We need a game plan. So we need to figure out how do we start investing. Do you have a home currently? Yes. Is it paid for? Yes. It is paid off. Okay. What's the home worth?

00:24:16

(someone): What's the what?

00:24:17

(someone): What is the home worth?

00:24:20

(someone): It's worth $80,000.

00:24:22

(someone): Okay, and that's pretty much all you have to your name, plus your emergency fund. Yeah. Okay. Yeah. So I want you to start thinking about developing a plan so that 10 years from now, at 64, we've developed a little bit of a nest egg by investing. That may start with a Roth IRA for you, maxing that out. But we also need to get our income up to do that. Right now, we don't have money to invest. We don't have money to save towards this restaurant, and we're not gonna be able to buy a building in cash.

00:11:50

(someone): Is it that you don't want to pay the amount that he's suggesting or you just don't want his input at all? And the reason I ask that is because what's the big deal with you just going, dad, here's what I've decided. I'm happy to tell you it's not a secret. I'm just deciding what I'm giving. And it feels like he just wants to have input. And I'm just wondering why is it that big of a deal for you to just say to him, all right, this is what I'm paying dad. You want to know what I'm going to do. This is what we've arranged. And then if he disagrees, then you deal with it.

00:12:19

(someone): So my dad, his input, he'll say it's, you know, a suggestion, but there's an implicit thing that you kind of have to do it.

00:12:31

(someone): Okay, so this to you is a clear dividing line by saying, I'm not even going to tell you, it's just between me and this other family member.

00:12:37

(someone): Yeah. So what is his motivation? You know him better than anyone. What do you think's behind this?

00:12:43

(someone): I know his motivation is definitely just like, I know his motivation is definitely just to, I guess, make sure that family members aren't talking and thinking I'm just mooching. There we go.

00:12:57

(someone): It's his reputation on the line.

00:12:59

(someone): Yeah, potentially.

00:13:00

(someone): Okay, that's what I was digging for.

00:02:30

(someone): Are you, is it, is it killing you? Is the car payment killing you? Let's be honest.

00:02:35

(someone): Absolutely.

00:02:35

(someone): And you're not even driving it much.

00:02:38

(someone): I'm not driving it much. No.

00:02:39

(someone): Okay. And what's it worth?

00:02:43

(someone): Um, after plugging in the numbers at a higher value, maybe 38 to 39 right now. And then let's say you sold it for 40.

00:02:51

(someone): That leaves you with no money to buy a car. Do you have any cash on hand?

00:02:56

(someone): Just my, uh, 1000 saved. Okay.

00:03:01

(someone): And no other debt?

00:03:03

(someone): No, I actually do have a lot more debt and that's why I'm trying to sell it. Okay, so this is one step. I have $75,000 with the car.

00:03:10

(someone): What's the other debt?

00:03:12

(someone): It's all consumer debt on credit cards.

00:03:14

(someone): Okay. So you got $35,000 in credit card debt?

00:03:19

(someone): Yep.

00:03:19

(someone): What's the interest rate on that?

00:03:23

(someone): The highest interest rate on One of the cards is 27%. The rest are... Oh, I need some pepsin AC immediately.

00:03:31

(someone): Oh, okay. Heartburn.

00:03:32

(someone): I'm almost done paying that one off.

00:03:34

(someone): Good.

00:18:36

(someone): Not happy? But you're freaking out? I'm in the baby steps. Can I interrupt my income? Do I need to? You got a money question? Well, we are here for you. 888-825-5225. A lot of you are planning to move sometime soon, and that's always exciting, but we've got to get real with you here. In most places around the country, you're going to be facing some sky-high home prices. Interest rates are not going to return to their record lows anytime soon, but that doesn't make it impossible to own a home. If you want to buy or sell, you've got to make sure that you're financially ready and that you've got a trusted and experienced real estate agent to walk you through it, not Uncle Larry. who just got his license last month. You need a pro who's a true expert. You can find a high caliber Ramsey trusted agent like that through our endorsed local providers program and we vet the agents around the country so you're going to get the best support whether you're moving from Florida to Alaska or buying your first home somewhere in between. Go to ramseysolutions.com slash agent that's ramseysolutions.com slash agent. Let's go to Atlanta, Georgia. Sarah is on the line. Sarah, how can we help?

00:19:40

(someone): Hi there. Here's my question. I am 54 years old and I just got out of debt.

00:06:43

Dave Ramsey: If we threw $60,000 of that at the $150,000, we've only got $90,000 to go. And if we knock out $30,000 a year for the next three years, your $66,000 in the house is paid for, and she's in the house she wants to die in. So let's try to go at it that way. But baby doll, that means $30,000 a year. That's $2,500 a month. And we've not been doing that because you're not doing that. And we've got to do that together. If we're going to stay in this house, that's the cost of the deal.

00:07:09

(someone): Yeah, I think that if he lays it out as you so eloquently did, which clearly you learned in counseling, I think he'll be all right.

00:07:17

Dave Ramsey: I might have used this technique at home. Yeah, no, I mean, you just got to talk it out and say, look, and Dr. John Deloney, when he's on here, a lot tells people, look, have you bothered to tell them how scared you are? Have you bothered to tell them how Angry you are have you bothered to tell them not just you need to get on board right Dave stuff. That's ridiculous Nobody wants to do that if you bother to tell them how excited you are about Enthusiastic how much this makes me smile to the idea of being dead free and we don't I mean all spouses have a tendency to say, you know, I thought Thought you got mind reading lessons with that marriage certificate and you didn't. You were supposed to understand.

00:06:11

(someone): Jackson, how can we help? Hey, hey, hey. How are you guys doing? We're having a blast. What's going on?

00:06:17

(someone): Awesome, awesome. Okay, so me and my wife are out of baby step two. We have baby step three done. Uh, we were going to say for a house. Um, but I really, really want to be a pilot, uh, as my longterm career eventually. And if we go that route, we would be putting off buying a house for several years because flight school is quite pricey and it takes a while. So I just want to know what would you guys do?

00:06:44

(someone): I would do whatever it takes to get through the pilot training without any debt at all. And if that means putting off multiple things, that's what I would do. Because there's no reason to have any debt for this. It is expensive, but when you come out of this thing, you're gonna be one of the few pilots who have no debt, and you're gonna be flying the friendly skies, debt-free, and the house will still be there. So I would do whatever it takes not to go into debt, cash flow it.

00:07:10

(someone): How long would that take to save up and cash flow this?

00:07:14

(someone): So it's about, um, it's 95,000 for all seven ratings. And, um, then I have to be an instructor to build my hours for, for a couple of years.

00:33:58

(someone): No bills. Well, now we just got a little cushion in retirement, and now we can live and give like no one else. We can give a little more, spend a little more, and continue to invest. Do you have any other investments?

00:34:08

(someone): No, I just rolled that over this week to an investor, and they're going to put it in some mutual funds.

00:34:14

(someone): I've never done that before, so... But you have no money in investments. It's all Social Security and pension right now until we get this money.

00:34:22

(someone): Yeah, well that money is rolled over. Yeah, it's here already. I just got to take it down and give them the check next week.

00:34:27

(someone): Yeah, whatever's left, throw into some mutual funds and you can continue to pile on top of that with whatever margin you have left. But I like having a goal for giving, saving, and spending. And so let's increase our giving a little bit. Let's have Linda have a little fun, increase some of the spending line items for fun money, and then we're going to invest some as well.

00:34:46

(someone): Okay, so then I guess I could give it to them or else I was just going to put it in and a CD account or just to have for in case something happens, I don't know.

00:34:55

(someone): Yeah, I would just park in a high-yield savings account and keep it liquid. That way if an opportunity strikes or you want to buy something or whatever it is, you'll have that money ready to go. And you've got great rates right now with those high-yield savings accounts.

00:24:39

(someone): Right now, we don't have money to invest. We don't have money to save towards this restaurant, and we're not gonna be able to buy a building in cash. So it may start with, I'm gonna go work at a restaurant, learn the ins and outs of the business, get in with the manager, maybe take over management one day, so that when the time comes, I'm ready to do this thing.

00:24:56

(someone): Okay.

00:24:57

(someone): Would you be willing to do that, to go work at a restaurant and learn all the ins and outs of the business?

00:25:03

(someone): I would be willing to start from the ground up. I have a college degree, so hopefully I'll be able to.

00:25:11

(someone): So, Sarah, I'm jumping in real quick. So, we've got to start to get some real numbers for you to see. We got to get out of our head and we've got to get some real numbers. So you've got to increase your income to the level that, as George is saying, that you actually can put 15% of your income away in Baby Step 4, because that's first and foremost. It's more important than the restaurant. And then after that, in a given year, You're going to have to be able to put $20,000 to $30,000 away a year, George, on minimum just to get to the point where we can buy a $170,000, $180,000 building plus any startup cost. And I'm concerned about the startup cost of the restaurant.

00:25:48

(someone): There's equipment. And truthfully, the rate at which restaurants fail is scary.

00:38:22

(someone): Do you have, do you have debt right now?

00:38:25

(someone): No, ma'am. No debt.

00:38:26

(someone): No debt. Do you have a emergency fund?

00:38:29

(someone): Yes, ma'am.

00:38:29

(someone): Nice. Are you on base? So you're on babysits four, five and six. Are you funding retirement?

00:38:33

(someone): Uh, I'm signing up for my four or three being next month.

00:38:37

(someone): Oh, good for you. Do you have kids?

00:38:40

(someone): No.

00:38:40

(someone): No, do you have a house?

00:38:42

(someone): I'm renting an apartment right now.

00:38:44

(someone): Good, okay. That's awesome, Will.

00:38:45

(someone): I think you put it in an envelope and send it to attention Rachel Cruz at the Ramsey Solutions.

00:38:51

(someone): I'll take that extra cash.

00:38:52

(someone): She's got a car fund she's trying to put money into.

00:38:55

(someone): So yeah, Will, at this point, how much did you say you have extra per month?

00:39:01

(someone): usually comes out to about like 60 bucks at the end of the month. I spend five dollars less than I allocate for groceries every week or something like that.

00:39:09

(someone): Oh, good for you. Down to the penny. That's awesome. Well, I mean, honestly, I mean the 60, I would say, yeah, if there's a little bit, if you want to up your out to eat by some, you know, you can, you're to the point that you are, you're funding retirement, you don't have a mortgage right now.

00:12:59

(someone): Yeah, potentially.

00:13:00

(someone): Okay, that's what I was digging for. Yep. Because the motive matters. Some parents are just going, you know, they're looking out for you, they want the best for you, but this feels like if they find out through the grapevine of the family that she's only paying 300 bucks, they're going to be coming at me going, wow, your daughter's so cheap. And that's a reflection on that.

00:13:19

(someone): Yeah.

00:13:19

(someone): Okay. Well, this is, as our friend Dr. Henry Cloud would say, you've got to draw the boundary line. the property line that marks what you're responsible for and what he's responsible for. And this is not his responsibility. And if it's going to put a tear in the relationship, that's on him, not on you. And I know that's hard to say, but it's going to, it may cause a rift that is unrepairable depending on his response.

00:13:46

(someone): Do you think it's, do you think it's not, uh, you think it's something that's going to last a long time or do you think he's going to get over it eventually?

00:13:53

(someone): I'm hoping and praying it doesn't last a long time. You know, I definitely told my parents that I'm thankful for everything, but I do think just me as an adult going forward, these are just some things I should kind of like keep to myself and running my finances.

00:14:09

(someone): So this conversation has already happened. Yeah, yeah. And how is it so far?

00:29:32

(someone): And I have about $9,200 of debt right now, and that's counting $500 of credit from my credit card. I'm just honestly looking for the best way or some financial advice to go from here, because I'm doing monthly payments currently, but I feel like it's just going nowhere.

00:29:52

(someone): Okay, so we've got about $8,700 in student loans, $500 on credit cards. Yes. Are those separate student loans? How many are there, if you broke them out?

00:29:59

(someone): There's four separate student loans.

00:30:02

(someone): What's the smallest one?

00:30:04

(someone): The smallest one is $1,500.

00:30:05

(someone): Cool. So this is the way I attacked my student loan debt. It was exactly like you. I had credit card debt, student loan debt back in 2013. I had $40,000 total. And so the way I attacked it was using a method called the debt snowball method, where we lay these debts out from smallest to largest. So your credit card goes first. How quickly, if you made minimum payments on your student loans, how quickly could you attack the credit card debt? If you were working extra, selling stuff on a budget, cutting expenses.

00:30:32

(someone): Yeah. Um, I mean, right now the job I'm working on, I'm making, I work a 40 hour week. I'm taking home about six 50 a week.

00:30:43

(someone): Okay.

00:30:44

(someone): So, um, I mean, I have some other bills monthly, but like, such as like car insurance or whatnot.

00:33:19

(someone): I graduated high school and now I'm working as a superintendent for a contracting company.

00:33:26

(someone): Okay. And so that's for the foreseeable future, that's what you'll be doing? Yes. Great. And how much do you make a year?

00:33:34

(someone): About 40 before taxes.

00:33:35

(someone): Okay, great. So I'll start with the engagement ring. We always recommend about a month's worth of salary to spend on an engagement ring. So that's kind of the, that's the rule of thumb. So I'd have that number in your head to say, okay, that kind of feels, that feels right. And then I would walk you through the baby steps. Right now, saving for a house, It sounds like you have a lot of life transitions possibly coming in the next two, three years of your life. So buying a house right now, I think would be probably not the smartest investment just because the amount of change that could be occurring of maybe it's another job change or if you do get engaged and you're married and you guys move city, like, I mean, there's just a lot that can happen. So at saving for a down payment right this moment, I probably wouldn't focus so much on But I would focus on an emergency fund. Do you just have cash in the bank?

00:34:36

(someone): Yes, and I already have a little money in my Roth IRA that I put in.

00:34:42

(someone): How much do you have, just liquid cash, that's in the bank?

00:34:46

(someone): I have like $4,500. $4,500, okay.

00:03:32

(someone): I'm almost done paying that one off.

00:03:34

(someone): Good. Well, absolutely. We are selling this car. Are you going to need a car ASAP to get around?

00:03:40

(someone): Yes.

00:03:41

(someone): Okay. So can we get you a little beater car? Let's say you waited to sell this Tesla for three months and whatever you have saved in three months, we're going to find you a cheap car. Is that reasonable?

00:03:50

(someone): Yeah.

00:03:51

(someone): What's your income?

00:03:54

(someone): Um, Total income, I would say $9,000 after taxes.

00:03:58

(someone): A month?

00:03:59

(someone): Yes.

00:04:00

(someone): And how much of that do you have after paying your minimum payments on your debts? How much could you save towards that, be it your car?

00:04:08

(someone): Only paying minimum, I think I can save within three months about $6,000. Okay.

00:04:14

(someone): Oh boy. All right, I'm on the hunt. San Diego, used car, $6,000. George, I'm going to look some up here.

00:04:20

(someone): You are going to find the exact opposite of what you're driving now. What model Tesla is this? A Model Y. Okay. All right. So you're going to miss that Tesla and whatever's next is going to be the saddest worst thing you've ever driven for now.

00:10:20

(someone): He has a retirement account and a nice emergency fund for our family. He has no debt. He pays most of the groceries and gas. We have two kids, so I work part-time at a vet clinic and have two other side hustles. I do pet sitting and have a small business where I sell soap, art, and teach classes. My small business doesn't profit towards our family yet since most of my income goes back into the business. I imagine I will have profit next year. I pay my own bills and I feel like I just can't get ahead because a lot of the large expenses are court related from a previous relationship. Okay, so do you have any advice how to manage this? I'm currently not saving any money, and I work my buns off to pay these bills for them to just kind of maintain where they are, and I can't get ahead. Wow. Okay. Well, this is, yeah, there's multiple layers. We could go here, Jade. Yes. So my highest layer, what I would say is it's a mantra we talk a lot about on this show, and that is that you guys need to work together. I mean, you are acting financially here like roommates, that he pays these bills, I pay those. That's what I literally did in college when I lived in an apartment. We split it like four things. Someone was in charge of the paper towels, someone was in charge of like, everyone had their own divvied up