Don’t Let a Good Reason Become a Bad Excuse

with your money we want to help you win in your work and we want you to win in

your relationships the phone number for your questions is triple eight eight two

five five two two five triple eight eight two five five two two five I'm Ken

Coleman and I'm joined by the illustrious the incomparable the

fabulous Jade Warshaw ladies and gentlemen how about that I gave you

three adjectives listen my eyebrows couldn't keep up I was trying to keep up

with you I like that so we are here for you Jade will take the lead on those

money questions and then anything related to your work specifically how do

I make more income so we can get through these baby steps faster I want to help

you ideate on those questions so give us a dial triple eight eight two five

five two two five we started off in the ATL or April joins us April how can we

help today hi so my question is do I sell my home to get out of debt and a

bad man hmm maybe now tell us more yeah so I got married less than a year ago I

didn't know it's gonna be emotional I got married less than a year ago and I

came to the marriage with debt okay I have about ninety one thousand dollars

of debt that is not including the home my home is worth about a hundred eighty

thousand dollars positive so I have a hundred eighty in equity okay my

marriage has gotten progressively more toxic to the point of verbal threats of

harm it's already been emotionally and verbally abuses but now there are

threats of harm so my question is would it be a good idea to sell my home to

start over from scratch financially and to get out of this market well let's

start with the most important thing first which is getting into a safe place

and out of this marriage that's that's thing number one do you have a plan in

place that you're able to put into action immediately there's somewhere I

could go like I always go to my mom's house yeah you live together I could

always go to my mom's house I don't I don't have a plan I'm just confused at

this point I do think you need to go to your mom's house because any man that

would make a threat to physically harm you you can't stay there tonight right

yeah and I'm sorry I'm so I'm so so so so sorry this was not what you pictured

when you said I do no one pictures that right okay deep breath for both of us

all right you're going to mom's house tonight and we're gonna come up with a

plan that you can move out be on your own and feel like you have some

confidence yes yeah okay so let's talk about what you're earning what what do

you bring it in on every month as little as 6,000 I'm in commissions okay

I get paid commission so as little as 6,000 as much as 10 okay 6 to 10 what

do you do car sales okay good job all right so can you kind of go through this

$91,000 of debt with me just so I can get a handle on what it is can you kind

of itemize it for me yeah so around 50,000 student loans about 10,000 in a

personal loan once he 50 student loans 10,000 personal loans $6,000 on a car

okay and 25 on credit card okay 25,000 or 2,500 thousand thousand okay yeah

is this in your name or his name both of your names I brought okay and you guys

currently share your finances like are you sharing bank accounts are you

sharing that sort of thing not anymore we tried the financial peace

University as soon as it came time to put it in act he immediately put our

joint account in the negative so I don't contribute to that accounting okay so

for all intents and purposes you're separate yeah okay um okay so tell me

about the living situation are you guys renters do you own a house together tell

me about that which is the one you told us you had the equity in okay so it's

your home so you can you can it's as when I say it's as easy it's not easy

but you can ask him to move out right okay okay so head back around this okay

so what about savings do you have any savings you know I'm in a financial

distress which I haven't experienced since I was very young okay and to be

married and experiencing it now it's crazy are you behind on anything no okay

I had to think about that for a second now everything's perfect okay that's a

good place so the good news is the good news is in this way you're not really

beholden to anybody you're not dependent and in the way that this is his house or

you're you know you have a level of independence here that's in this case

good and at this point really it's just if you're talking about the financial

side it's you walking the baby steps like anybody else the good news is I

think you have a good income you know obviously it's better when you make

10,000 in a month but there might be the situation where you can add to that

and side hustles do you have any children or do you guys have any kids

together no kids together I have a child in college and I'm paying for him to

breathe okay okay but no no little kids nobody at home that needs your time so

for you the name of the game I mean it's twofold just like we would tell anybody

else we're looking for ways to get the income up whether that's you side

hustling maybe you can take on more time at the dealership whatever that looks

like that makes sense for you and then it's bringing the expenses down so

that's what we're looking at and at the end of the day we're taking these debts

smallest to largest right can I mean $6,000 car first yeah absolutely so you

get some momentum but I think in conjunction with with what's going on

here I think because you own the home that you guys are currently living in I

think we got to play serious play serious with this guy I think you have

to say you're never gonna threaten me again or I'm calling the authorities I'm

going to my mom's house until you move out and this can all be pressed pause on

if you agree to go to counseling but but at this point when a man threatens you I

think he's gone way too far and I would call him out on it and say never again

you made your last threat now if you want to go get some therapy and you want

we can sit down with a professional where you feel safe but I agree with

what Jade said but I would let him know that I'm moving to protect myself and

I'm giving you X amount of days to get all your stuff out and the next time I

see you will be in divorce proceedings unless you're willing to sit down and

try to rescue this marriage because I always loved the idea of let's try that

we'll see if this guy's the real deal when you come to that but I think at

this point you have to play hardball with him and say this is my home I'm in

debt as you said I'm in financial distress so in this case Jade answering

the initial question I don't think you have to sell this house but I think that

if this house represents a lot of pain and this thing does go the route of

divorce it might not be a bad idea to sell it start fresh anyway so you have

some good mojo in the next house as you get healthy but not neither one of

they're saying you have to sell this house you make pretty good money yeah

and I think Jade's right I think if you just get serious and take care of

yourself and this is part of it I think you can walk this out and you make

really good money I think you have some extra motivation right now to sell as

many cars as possible yeah and hey don't keep this a secret a lot of people would

keep this a secret make sure you get some good girlfriends around you this is

the time if you got brothers call up your brothers call up your dad call up

your grandfather call up your pastor these are times where you don't you let

people know what's going on and that you need help and that you need people

around you and let them help you and be there with you when you confront this

person for the first time yeah thank you so much for the call we're rooting for

you this is the Ramsey show

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slash budget welcome back to the Ramsey show thrilled to have you with us

triple-8 8 2 5 5 2 2 5 is the phone number triple-8 8 2 5 5 2 2 5 want to

help you win with your money win with your work and income and and winning

your relationships Jade Warshaw joins me I'm Ken Coleman we're thrilled to have

you and Jade my note said it's it's time you've got the you've got the

details there so I'm gonna bring you in here on this because you are a person

who has done how many cruises like how many cruises have you been on I probably

couldn't give you a number but I know you I oh gosh how many cruises per year

for how many years well I did about oh gosh I probably did about 30 is like

about 40 weeks a year for a long time okay so how many years would you say a

decade so for minimum 400 cruises well no because you can go on for like I

would go on for like three days and leave and then go on another one in five

days only so I'm gonna double it 800 cruises I've been to 92 countries can

yeah and you were a professional singer yeah and and so when you hear about the

live like no one else cruise are you like are you serious I can't get away

I've been on the land for a long time now you're back and it's gonna be a lot

of fun it's gonna be fun listen listen this one but you're speaking this time

yeah I'm not singing I'm not unless you decide to spontaneously lead the crowd

on in some type of thing but lay us a song piano man there I would never know

but you're gonna be speaking along with Dave Ramsey myself John Deloney yeah

Rachel Cruz or camel seven days at sea yeah March 22nd through 29th this is

coming up next year duh and we'll be stopping in Kent Turks and Caicos I'm

excited about st. Thomas Puerto Rico love that country Bahamas territory yes

the territory there and here's the thing we are starting to see cabins running

low so if you want to do any type of VIP upgrade those are basically sold out so

if you're even trying to pick up a cabin you need to log on now to do that if you

want one with an ocean view you need to get your deposit in now the deposit is

600 bucks so for anybody thinking man I got to pay for the whole thing at up

front it's not really like that you know you pay 600 bucks and then at the next

point in time you pay the other money so that's the way it works you can book

your cabin today at Ramsey solutions comm slash Cruz and we'll be there yeah

it's gonna be fun so make your decision now and again these are for people that

are in baby steps four five six yes seven obviously that is right so if

you're not there sorry but now you have a little extra motivation beyond all

your other dreams and goals as well so gonna be a lot of fun gonna sell out and

I gotta see if I can get that the captain's hat from Gilligan I have a

couple but I want to get it on Dave at some point I want to get him to put it

on without like frowning at me or shouting and inside he might frown at

you I could definitely say that but I think I think I think people want to see

that they do so I'm gonna get my hands on one of those and get him to through

crowd pressure yeah that on I expect to see you in a captain's hat well that's

easy you're gonna be in linen trust me you're gonna be in your uncle cage

sandals I'm gonna look like I stepped out of the J crew Ralph spring edition

of the catalog there's no question about it I've already got two different types

of deck shoes I'll be wearing yeah okay yeah well I mean when in Rome you know

well my copy here says that we've got big news and it said that the big news

was the live like no one else Cruz but I know about some other big news Ken it's

your birthday oh you did it to me I didn't know where you were going it's

your birthday kid guys home Kenneth Wayne Coleman it is his birthday he is

turning 40 for the second time in 10 years also known as yeah I you know what

men are not ashamed of this folks I'm 50 today the big five Oh Ken keep doing

what you're doing I'm trying it's you're making it's the moisturizer but thank

you yes thank you Jade you'll have to sing to me later today I've got to get

that Whitney Houston style can you do that after the show save a little bit

I'll save a little bit for the gathering okay all right so fun yes uh can't

believe I'm 50 James it got here a lot faster than I thought I never thought

you were a day over 35 Kim thank you well the Botox helps all right Columbus

Ohio is where we go Amy is waiting for us Amy how could we help hi I'm

wondering if I should take a job offer from a approach from a company this

would be about $30,000 more however the schedule wouldn't be as great or if I

should stay with my current company who I just started with in May for a better

schedule okay so if I'm hearing this right this is as simple as better pay

versus better schedule is that about right you are correct and which way are

you leaning before you called us it was so hard of course I love the personal

time this $30,000 raise would also bring more opportunities for growth later it

is a leadership position so of course there's the responsibilities of that

yeah yeah and how do you feel about that part of it I enjoy helping people and I

enjoy guiding people of course it's completely different when you're the

person that's always the one that someone's looking towards so it's it

would it's definitely intimidating and I think that's the biggest part I'm

intimidated and I don't know if it's the right move so so that's probably more of

a factor than the schedule issue correct quite possibly yeah it's scary have you

ever led before been in any type of supervisor role before I have for a

short period yes and how did you do how would you grade yourself I especially

since I was very new at it I did well probably about a beak because of course

there's always room for growth but I for you people people said that they

enjoyed what I did enjoyed helping or they enjoyed me helping them give me

what if I told you that you could be a really great leader if you just ask two

questions every week would you believe me I would try to okay so I'm gonna give

you two questions I want to address this and then let's get to your decision but

real quick I just want to take the fear factor out of leadership and it is

intimidating by the way and that's a very natural to feel but if you were to

boil leadership down to two basic actions I believe it takes away the

intimidation factor and I think it's gonna make you extremely effective and

here are the two questions this is for your direct reports and I think you do

this on a weekly basis the first question is how are you doing that is

not a greeting in the hallway how you doing it is a look them in the eye and

go hey how are you doing everything good and you should know enough about them to

where you can just lean in and we're not talking about getting up in their

business we're talking about what little bit they share they will begin to

share more over time but how are you doing as a person okay I heard your dog

was sick or word is that your mom's going through something you know

whatever they're sharing you've heard it and you lean in as a person to say how

are you doing to let them know that you care the more you ask that question the

more they will know you care and the more they will trust you which leads to

the second question and they will be willing to answer the second question

the more they give you answers on the first one the second question is how can

I help you win okay and that is people want to know that their leaders know

what they're dealing with do they have the resources do they have the time are

you tuned in to what's going on in their job if you and if you ask those

questions on a weekly basis over time you will develop unbelievable

communication and trust through the transparency that's going on with those

two questions you got it yeah now that will make you a really effective leader

I promise you okay now let's just talk about the decision the long term is what

I was going to ask you about you already gave us that answer so you said this job

with more money also gives me more opportunity long term for me I'm gonna

go with the long-term opportunity as long as the new schedule change isn't

some type of massive massive disruption that would make my family life such a

dumpster fire Jade that it wouldn't be worth the long-term opportunity in the

short term pay what do you think I agree with you wholeheartedly so is

that the case then Amy will the new schedule be super negative or

disruptive to your personal life it would be somewhat of a disruption this

is if I could say it's for hospice and my availability would have to be pretty

much 24-7 for a short period of time at least a year until we get full staff on

board because of course things can happen in an instant that would mean I'm

missing holidays as well so here's the deal can you do that for a year for the

payoff I think I would like to well then I think you got your answer we never get

to answer these questions our job is to poke around tell you what we think

that's good but I I think you're ready to take this new role and I think for a

year you and your family can step up by the way Jade give you last word on this

we had about 30 seconds I think it's all in how she communicates this to all the

family members that will be affected I agree um they can kind of jump in and

support yeah I think so understanding it's a short like we always say short

term sacrifice long term gain yeah all right so we are in agreement go for it

stack that extra cash I like that $30,000 bump and what that can do major

in the short term to set you up for the long term as well don't move more of

your calls coming up this is the Ramsey show I've been doing this show for over

30 years and some of the saddest calls I have taken are from situations that are

completely preventable yeah and what's so hard is I feel like one of those

especially the ones that I'm like oh it's terrible air people that call in

and their spouse has passed away suddenly and they don't have life

insurance when you have to think through how am I gonna pay my bills I'm in the

middle next week yeah in the middle of all that grief like it's just it is it's

terrible it's a life insurance is the one thing especially as a mom with three

little kids that I'm like so big on for people to get because it's

inexpensive Xander is the place that Winston and I actually get all of our

life insurance and it doesn't cost much because Xander shops among a gazillion

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800-356-4282 that's 800-356-4282 or go to Xander.com

welcome back to the Ramsey show I'm Ken Coleman Jade Warshaw joins me the phone

number is 888-825-5225 888-825-5225

let's go to Indianapolis Indiana where Zachary joins us Zachary how can we help

today? Hi how are you guys? We're doing great what's going on? So I'll cut to the

case Monday I lost my house in a house fire for at least four months yeah oh my

god what do you mean at least for four months what was it totally it was it

was contained to one room thankfully but we had a lot of stuff in that room that

the room is completely gone they have to completely gut it and reconstruct it I

guess okay nobody was hurt no the dog was inside but thankfully they got him

out okay okay so pup is okay and when you say it's only one room is that

downstairs upstairs what was in the room it was our downstairs master bedroom we

were actually supposed to sell the house four days prior well four days after the

fire had happened oh my gosh but that's not happening anymore so thankfully like

a lot of my stuff was packed up and ready to go but like my wife's entire

wardrobe everything like our our bed our newborn son's bed and everything is

oh my god where were you guys when this happened I was an hour away at work and

my wife was at work oh my gosh and that your newborn son he was a grandparent oh

my gosh thank goodness but the rest of the house is okay yes my stepdad was

driving by when it started to smoke really bad so he caught it what happened

what caused the fire do they know it was one of the outlets by our bed they're

not exactly sure but they think maybe a wire came loose and like touched the

insulation or something or a mouse chewed on it oh my is crazy well I'm so

glad everybody's okay well a couple of things to be grateful for obviously you

guys weren't there your wife was not there your baby son the dog is okay my

goodness your father-in-law's driving by yeah and I love the video and again

grateful that it's just the room and four months from now you've got a

rebuilt master now I know all of the other things that come with that are

awful but but all things being equal this is you dodged a major major crisis

yeah yeah definitely so how can we help today so we were planning on selling the

house because my wife bought it before me and her were ever together and that

is a nightmare of a house foundation issues and electrical issues yeah so we

were really wanting to get out of it we were buying a new house closer to my

parents and it's a lot nicer house but did you already make the offer yeah but

we are doing a contingency buy okay good I'm gonna lose that house now that

we have to wait another four months yeah we have just started the baby steps

we've got about $85,000 in consumer debt okay we don't have much savings

especially after the fire now and then what have you been doing yeah we we just

started it so we had the emergency fund but now with the fire and stuff we the

thousand dollar emergency fund or yeah yeah thousand dollars okay so here's

what I think so where are you staying right now right now we're at my parents

okay you're at your parents you've blown through most of your thousand dollars

what do you have left right now we've got I want to say well she actually made

an extra car payment so we're waiting for that to come back but we'll have

about 13 in our account but we have bills and everything and I do a ton of

driving for work so I have to leave at least five to six hundred in there for

gas okay so okay is insurance going to cover the total rebuild or is there

going to be more cash you're gonna have yeah they're gonna cover it but they are

kind of dragging their feet so right okay I think you're a little new to the

baby steps and so I kind of want to reset and get everything on on so that

you and I are at least on the same footing kind of going forward I hate

that this happened to your house and I hate that you guys had a plan and this

just three wrenches all up in that plan however in one way like Ken said you

dodged several bullets here and I'm gonna add another bullet to the list

that I believe that you that you dodged now looking at your financial situation

fire aside now was not the time for you guys to buy a house yeah I agree you

know I originally wanted to rent but we live in a small town and leaving the

town is not an option for us because of my wife's work and that's where our

babysitting situation is located and that they there is no places to rent

that would it be the same amount as what our mortgage was going to be okay that

has the space for two kids and a dog that allows dogs there was one place

that was available and we applied and we got denied because of our credit and

then and then it went off the market like a week later so so okay so to

address that unless you were going to unless by selling this house let's

pretend the fire didn't happen for a minute unless you're gonna have this

this huge amount of equity that was gonna allow you to get into the next

house and pay off you know this debt or something like that that would have been

the only way it would have worked out and if you had called us prior to that I

would said you could just got to keep looking look for the right rental

because something will come on the market that's what I would have said to

you in that situation but where you're at now is okay insurance is going to

cover the rebuild of the master bedroom you know you guys are in a place that

you know hopefully you're not spending a whole lot staying with family but you

are gonna spend some but you've still got you know you're still working so the

income is coming in there we've got to prioritize this debt and yeah that's

got to be the number one thing because technically Zachary when you go to buy a

house you want all of your debt paid off then you want to have saved up three to

six months of expenses that's not talking about a down payment that's just

you having money you know when you move into this house and then it's like okay

I need a down payment so you guys were quite far from being there when you sold

the house what was it going to bring we were going to get about 15,000 in equity

and then my sister was also going to give a gift for a down payment as well

to help us with that okay and when you got that gift from your sister what

percentage wise was that going to be towards your next down payment we were

going to be using an FHA loan but it was going to be roughly 12 to 15 yeah yeah I

think in many ways this was a blessing in disguise because I think you guys are

about to get in way too deep you always want to make sure that you're putting at

least 5% down on a house you want to make sure it's no more than 25% of your

take-home pay these are the things you want to make sure of and going forward

now it's just not the time and hopefully what I would do what I would do for you

guys if the house that you're in is a nightmare obviously there's electrical

things that need to be fixed obviously there's other things those are things

that you might have to shell out some money to fix in the meantime because the

solution and can we see it all the time my car broke down I'm just gonna trade

that in and trade up and get a new car with payments right because we don't

have the $2,000 to fix it so we get a $20,000 car right and the worst I said

this to Dave on Friday the worst thing is and I'm not saying that this is you

but you buy $500,000 house but the AC breaks and you don't have $5,000 to fix

it right happens all the time so push push pause on home buying it's not the

time yeah rebuild get your life back on on track get the things fixed in the

home that's gonna make it a safe place for you to live and that's right and hey

let's look at the positive on this I think Jade's right and I think I'm gonna

give you just a little bit of a I think hopefully a little mindset hack here

you know you get a new master bedroom hey you know in the sense of you know

did you lose some stuff yes that stinks she lost her wardrobe that's awful all

those things are just awful but baby safe dog safe you're safe you know what

in a really old master bedroom mm-hmm now you get a new master bedroom I like

Jade's pressing pause right here and just kind of going you know what life

just threw us a curveball but what let's hit the curve yeah yeah you know like I

know I know you know I'm stuck in this baseball metaphor but stay with me you

know curveballs are meant to strike people out come on but let me tell you

something really good hitters know how to hit a curve and if you hang a curve

these people put it out of the park they smash it and I think right now I

think for the coaching you just got from coach Jade over here I think you guys

can take this this curveball that life threw at you and you absolutely hit a

grand slam and come out of this thing way better off so please listen to what

she said I think she's absolutely right I think you guys got a second chance not

fun not fun how you got it but nonetheless a second chance so there you

go all right don't move she's Jade Warshaw I'm Ken Coleman we're here for

you this is the Ramsey show

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Ramsey promo code Ramsey welcome back to the Ramsey show I'm Ken Coleman Jade

Warshaw joins me the phone number is triple eight eight two five five two two

five Chad is joining us now in Sioux City Iowa Chad how can we help today I

can't hi Jade nice to talk to you I'm calling just because I'd like to know if

it would be wise to convert a 401k to a Roth

okay that's a good question to ask so are you moving jobs is that what's causing you to

I'm 53 my wife's 52 kind of got into this late in the game we have about

five hundred sixty thousand total in investments okay mutual funds between

four fifty seven at my work she has two IRAs and then I have a Roth I was

looking to convert her IRA into a Roth how much is it and that 170,000 okay so

here we work through a series of baby steps I'm not sure how familiar you are

with them but technically okay so do you guys have any debt no debt no debt okay

what about the house houses are paid okay yeah if you want to start that

process I would say yes the only caveat to that is obviously if you're in baby

step two we don't want you to do that because you're gonna be on the hook for

the taxes and you know that money can be used otherwise if you're on baby step

two but for you guys it seems like the right move are you working with a tax

guide or anybody to help you in that area yeah I do have those people in

place I kind of want to get your guys's opinion before I went actually and spoke

to them about it yeah if I were in your shoes I would start trying to make that

move I mean I don't know if you listened a few days back but we had a guy who he

had amassed such a wealth eight million dollars but it was all in traditional

funds and so he was just getting nailed with you know required minimum

distributions and so there is a part of this where you do need to begin making

that that transfer over to Roth and I think that you need to work with a Ramsey

trusted pro in order to do that somebody to help you with the tax side of it and

somebody to help you with the investment side of it so if you need

that we'll make sure that Christian picks up and gives you that but if

you're asking if now is the time my answer is yes yeah I agree I don't

disagree because of the way you walked it through I mean we've got the baby

steps and again the timing on this this is why our formula matters it matters

big-time and that's why we always say match beats Roth beats traditional like

we want you investing where there's free money but at the end of the day the Roth

is I mean yeah the whole point is when you go into those retirement years a

you don't want to be taking having to pay taxes on what you're pulling out of

there and be if you do amass the type of wealth that we hope that you do if

you're in traditional and you're having to take those required minimum

distributions you're paying taxes on that that's right and that has the

ability depending on how well you've done to boost you up in some tax brackets

textbook yes on this one and I love how you walked him through that so our new

audience make sure you're paying attention there as to the why why why

it's a yes for Chad for some it's not so really really good review there yeah

let's go to Tampa Florida now and Valerie is joining us there Valerie how

can we help hi so I'm calling in I'll be waiting on my age I'm as a wealthy 24

and he's planning on going to law school both have our undergrad and as he's

going to law school we're wanting to have kids like you want to have like a

big family like four to six kids and we realized that we probably shouldn't be

waiting till after he's done to start having kids so then my question is is

like he's going back to school he obviously won't be making money because

he'll be in school for three years and then what would you recommend I do

should I take out like loans for like housing and an expensive like food no

or should I work through yes law school and send my kids to daycare well first

of all we don't have any kids yet right no but like so I'm stepping in here real

quick because I'm gonna play old man because I'm 50 today Valerie so I'm

feeling extra wise okay I got a good night's sleep and I want to I want to

start off of this and then I want Jade she has no problem taking issue with me

if she disagrees but I hear some things that 50 year old Ken says slow

your roll youngster all right let me just go through a couple things how old

are you and your husband and how long you've been married 24 and three and a

half years three and a half years in okay and so if we start trying to have

kiddos today there are no guarantees that we're gonna have them in the

timeline that we want would you agree with that statement Valerie yeah

correct but also he's gonna be going to law school and fall 2025 doesn't matter

this is my timeline you follow me don't jump off the timeline Valerie I see what

you're trying to do I'm going somewhere with this you have no idea that you guys

are going to get pregnant when you want to get pregnant you have no clue okay so

he's going to law school when starting in the fall couple weeks Oh fall of

2025 so he's got a year to work yes yeah yes he does all right and I have

another another suggestion here in a second here's my point you are asking if

you should take out loans for something that may not be absolutely in need you

you could be working full-time and not have kids stacking cash cutting your

expenses and so I think this is a bad idea to even consider it because because

here's here's what I know about law school where is he going and what is it

going to cost so he's going to it's in st. Pete and he's planning a full-ride

scholarship right that was my great so yeah why would we need money why would

we need student loans if he's getting a full ride did you say he's planning to

get or he's getting yeah he's planning getting like based on his LSAT score and

absolutely is all of his things he got yep he should be getting a full ride

perfect for whatever reason if he doesn't we'll have to pay whatever but

anyway um so yeah my question is if but like you know preventative if we are in

law school and like I'm I'm pregnant like what what would you recommend like

would you recommend you know I'm going to work putting kid in daycare no no I

wasn't finished Valerie Valerie I wasn't finished sorry Jay no go ahead

kid I'm gonna say this you should not be trying to have kids you're 24 get

through law school it's two years max right no it's not it's three years who

cares it's a 37 stop this nonsense stop it stop it it is not smart in this

situation for you to be planning to have kids right now just chill out until you

get the cash to be able to have kids or you have a budget where you can have

kids don't walk yourself into a student loan because you think you got a mama

timeline stop it's not smart Jade yeah well I'm

planning on having like four to six kids I don't care I'm going to dunk a

basketball when I was 16 it didn't work out okay here's the thing listen

yeah I'm not gonna wait till I'm old you don't have any control you don't even

have to wait till you're old let me just throw it to you like this mom to future

mom hey there's a couple of things here there is a there is something there's

something it's important to plan okay all I'm saying is you have the ability

to make a great plan here and to create as much of a situation where you're

setting yourself up for success as possible to Ken's point you do have

plenty of time that's number one but then we have to be aware of the things

that we cannot control a you might get listen I hope you have six very

wonderful pregnancies and they happen exactly when you want them to but there

is a part of this where listen that somebody threw the cards up in the air

and you don't know where they're gonna land so I love that you're planning do

if you're planning then let's plan a way where you're not going into debt that's

all I ask we're planning for a way that allows us to have the life that we want

where we're not going into debt to the other huge variable in this Valerie that

you're forgetting about is once these babies come out of you you don't know

what you're gonna want you might suddenly be like practice law what was I

thinking I want to stay on these babies or I want to do part-time or I want to

homeschool them my husband lawyer and so that right there knowing that variable

is a huge not that I had to give you any more reasons not to go into debt but the

worst thing ever would be if you went into debt to get a degree and then you

hardly used it for the next 18 years I'm sorry I'm not going to law school

did we know no we know you're not we know she's not okay well no it's her

husband here's the deal still Valerie you've I think Valerie I think you've

decided that you think it's okay because he's gonna be a hotshot lawyer he's

gonna pay the loan back sorry you called the wrong show today I don't think you

need to do this at all he needs to work like crazy and save up money good grief

all right I gotta go rest I got it we'll be back this is the Ramsey show

hey folks Dave here and I know some of you listen to the show waiting for a

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for free just search Ramsey Network in the App Store today this is the Ramsey

show thrilled to have you with us we're here to help you win in your life we

want you to win with your money we want you to win in your work we want you to

win with your relationships triple eight eight two five five two two five is the

phone number triple eight eight two five five two two five I'm Ken Coleman Jade

Warshaw is with you we're gonna take your questions about your money and your

income today that's kind of our focus but you know you call well we'll talk

to you about whatever you want to talk about boy it's been a weekend hasn't it

in the news oh I mean I feel like the last three weeks it's just been one

headline after the next yikers I think it's gonna be like you know like where

were you I know where were you when the towers fell where were you right in the

2024 election yeah where were you when the announcement was made really okay

nevermind no thank you I'll tell you I can see James rolling his eyes here I'm

still a man of the people but if you must know I was in I was in a spa

treatment for my birthday a true story has a show connection James it's true

story I got out of my lovely wife got me a spa treatment I enjoy massage and so I

come out of my massage I walk in a locker room yeah and I open up and I

grab my phone and I see texts from Rachel Cruz and dr. John Delaney Wow

stack like six messages I was late to the party they broke the news for me

Wow and I was trying to play catch-up so there you go there you go there you go

in case you don't know what we're talking about is President Biden is

there anybody on the planet that doesn't know about somebody somebody that's what

we're talking about anyway the news got to me that way and I was I was a little

groggy so it took me a second to process it but Rachel Cruz by the way is always

Rachel breaking news Cruz is what I call her that's yeah he has got her

finger on the pulse of what's going on in the world and has a great opinion

about it all all right to the phones we go triple 8 8 2 5 5 2 2 5 David joins us

in Chicago David how can we help hey guys how are you good how are you sir

I'm doing okay I'm recently divorced and I've been left with a 401k from my

employer that has 160,000 in it currently I'm also currently

contributing 15% to it and I get a 3% match and I have a hyzer with $100,000 in

it I have no debt no loans no car payments nothing I gross 100,000 a year

after taxes I'm bringing in 4,300 a month and I have 2,800 a month in

expenses so if everything's good with the kids usually I'll probably be

saving anywhere between 1,000 to 1,500 a month I'm 46 years old the goal was to

have a retirement of 2 million and I also need to buy a house I'm currently

renting so at my age I don't know how feasible this is anymore but I'm just

curious do I need to get a side hustle am I currently having an income problem

now because of my age with what my goals are I don't know what to do um I don't

hear a lot of issues okay let me run it back and make sure I didn't miss

anything you got 160 K in your 401k where you're doing baby step four and

you're contributing that you got a 3% match that's great you got a hundred

thousand stashed away part of that is an emergency a fully funded emergency fund

and part of it is earmarked I guess for whatever you want you're making a

hundred thousand a year when you're taking home what you're actually taking

home is 4,300 a month and you want to buy a house where's the problem he wants

enough I'll get to 2 million that you got it too I don't know yeah I don't

the 2 million retirement goal based on my age right now the house how old are

you I can take I'm 46 okay 46 all right yeah this is your calculator she loves

her investment calculator so while she's pulling this up David do you anticipate

getting a raise making more money or in your current situation do you feel like

you can through reasonable activities right extra work maybe some again

getting promoted pivoting maybe do you feel like you could contribute way more

than you are now that's a great question because I'm currently I'm in finance I

am new to finance I went back and got a master's degree and got a finance degree

so where I'm at right now I just received a promotion that got me to a

hundred thousand so I don't see anything on the horizon in the next year or two

but with the finance degree I was thinking about going to get my certified

management accountant certificate to try to increase the salary more so that

would be about nine months to study and take the exams or maybe do bookkeeping

on the side of the side hustle or something like that I can I could do

work from home and that that would be the next step either that or I thought

about I mean really anything you invite a drive an uber or something but your

head's in the right place so let me bring Jade in here because she's got her

calculator because this is this was your question what do I have to do to get to

2 million in retirement she's got her calculator I'll take it away okay so

listen I'm you're 46 years old let's say you work and you want to retire with

let's say you want the 2 million at least by 67 65 right you've got a

hundred and sixty in there now if you're investing 15% that's around twelve

hundred fifty bucks a month with your income and average rate of return 8 to

10 percent and I only say 8 because of the haters is really 10 and up let's be

honest about that if you're in good growth stock mutual funds like even if

you're in the S&P 500 like you're gonna get 10% okay annualized by the way for

the haters all right when I put that in you're gonna be over 2 million my

results say 2 million three hundred fifty nine thousand five hundred and

seventy nine and that would happen even with my employers 401k because I'm not

sure and I didn't even include like I didn't even include the free money match

part that's gravy the 3% I didn't even I didn't include that like I'm saying

this is just putting your money your contribution how's that feel and they

currently had me in a in a van I'm in like one of those Vanguard target

thousand twenty fifty or something like that okay I probably changed that but

she's got you a 2.3 David so you're not too late you're not not too late at all

not by a long shot and that's a 67 run those numbers to 75 maybe let's see I

was planning on working past the age of 70 because I have a seven-year-old

daughter let's say 72 that's when you have the least amount of let's say

social security so let's say 72 a lot of people like to go till there because

that's early says the max three three million nine hundred seventy nine

thousand thirty four dollars oh my god that's good so what I need to do then

is probably remove it out of a Vanguard fund and move it into like more of a

mutual fund yeah we talked about in spreading your investments over four

types growth growth and income aggressive growth and international and

they're not target date funds um so I want to get you hooked up with a smart

vest or pro before you get off of here to help you select those funds and not

just select them but really you understanding what's going on with them

because if I look you know if I look at my 401k you should your annualized rate

of return should be around 10% all the time okay okay that's not necessarily

one year from the next year but when you take this whole track of growth this

whole arc of the time that you're in the stock market if you look and say okay

all of that time combined what was my average annualized rate of return you

should be above 10% so that's what we're looking for and that's how we're

plugging these numbers in but I mean even if I were just to play a little bit

and just for kicks put it at 8% let's see what it puts you at you're still at

2.5 million so you know we can you can play with those interest rates and see

where it lands you but for anybody listening if you're not really looking

at an investment calculator you need to be and you need to be plugging these

numbers and we have a really great one at Ramsey solutions calm they can throw

it in the show notes but instead of kind of feeling that anxiety of the unknown

Ken plugging these numbers in and seeing for yourself seeing what it would take

playing with the interest rates playing with the monthly contribution that

you're putting in all of that stuff gives you so much peace because we're

talking about real numbers not just shadows it's a great motivator it really

is and hey David you got to be just fired up my friend you called in

thinking you were behind the eight ball and my friend you are on your way to 4

million plus says Jay yeah nice job this is the Ramsey show

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your first month that's better help H ELP comm Deloney welcome back to the

Ramsey show where we help you win with your money win with your work win in

your relationships I'm Ken Coleman Jade Warshaw joins me the phone number is

888-825-5225

888-825-5225 Tallahassee Florida is where we go next

Brandon how can we help? Hi there thank you guys for doing what you have to do

thank you my question today is so let me just give you a little background

basically got married about two months ago and me and my wife had a plan for

what we're going to do I was going to go I graduate in December with my

bachelor's and then I was going to go on to a PT school or PA school and then

she's pregnant now so we're gonna have a kid soon so I'm excited for that but

that does kind of throw a wrench in that even before then I was never too I was

never really that set on going to PT school or PA school just kind of what we

were gonna do and now that she's pregnant that kind of throws it out the

window so my question is how do you figure out what you what you should do

how do you find like a successful career I'm only 21 my wife is only 21 that's

kind of love it well I wish they taught you this in

school but this is what I teach and I think there's a three-part if you want

to call it equation or formula and let's just think of us three wires that

everybody has the first wire is talent just what you do well you know Brandon

when you just started moving and shaking in the world as even as an

elementary school kid your teachers notice that you were talented in certain

areas certain things came easy to you your parents noticed it maybe there was

a difference between you and your siblings on things but everybody comes

in this world hardwired with talent so we just these things come easy to us we

do them well that's the first wire the second wire is passion this is we enjoy

this task or this role you know some people just to give you an example they

love organizing something right some people love fixing stuff and some people

love talking you know I mean we could just go through the entire world of work

and there's just some work that everybody kind of has their own list of

this is stuff that I really enjoy doing the third wire is about all about

motivation what gets you fired up what motivates you and this is results

oriented so I call this this wire mission in other words what do I want to

accomplish what results do I want to put in the world okay so talent is what

I do best passion is what I love to do most and mission is the results that I

care deeply about does that make sense those three things yeah yeah so figuring

out what you want to do you got to figure out those things and then you

figure out okay once I know what I'm good at what I enjoy doing and what

results motivate me I begin to see where in the world of work do I fit and and so

I'm gonna give you a kind of clue because I think you have a sense there's

four types of work if I took every job every career path in the world and I put

them into four categories one would be people work another would be ideas the

other would be process and then objects so idea work right so Jade and I are in

that we're kind of in people and ideas so our work falls in people and ideas we

work with people we're coming up with ideas to help people right so we're not

inventing something but in there it relates to an object but an inventor

might be in the ideas and object space right they invent a tool or they invent

a machine that does something and and so you could see object work is physical

work with your hands either creating something or fixing something so you've

got people ideas processes processes by the way engineering type work a lot of

technical work organization things like that so when you think of those four

areas of work people ideas processes and objects where do you think your

talent falls I think so I've I've worked all the way through call and even in

high school as a tennis coach so that's people and yeah that's people and then

that's also I think I think that might also fall under the ideas category

actually I'd throw it in the process because coaches teach right there they

teach you how to hit the serve how many different elements are in a serve would

you say no the thousands but then you break it down to four okay great that's

a process so if you're going to teach me and Jade how to serve a tennis ball that

is a process so that's people in process so that's what you're talented in and

usually we're going to see some consistency that you enjoy people in

process work true or false yeah I do yeah all right and so if we look at what

motivates you doing that work people in process what what is it what's the

result that you most want to create as a coach in your words I think for me

it's always been working with like specifically a lot of young men to build

discipline in their lives because I know most of them aren't gonna go play pro or

to go play college even but that's right kind of you know disciple them if you

will in that area I agree so in the get clear assessment which I'm going to give

you by the way in the book find the work you're wired to do so I'm going to give

you this as our gift so you can work through this but you're gonna see that

one of the six missional results in the assessment is the result of influence

Jade and I think that anybody who's in people in process work yeah are there

one you're gonna see a big theme of you're driven by influence in fact the

result that you really get motivated for is influencing people and it's not about

hitting the serve it's not isolated to hitting the serve it's about what can I

teach them in tennis so that they learn something they use in life does this

sound like it's resonating yeah all right so now let's pull back for just a

minute I don't think you're limited to coaching in sports I want to bring Jade

in here because he's a d1 athlete and and she's got a lot to say on on people

that are high achievers but my take is is to pull back before you get your

results just on this call is to think about how could you be a coach in the

world of work that's not necessarily coaching sports you know and so I think

Jade management leadership yes I mean he's not limited to coaching high school

tennis or college tennis is the point I'm trying to make yeah well I mean I

think you framed it up I felt like I just sat through a master class the way

you framed it up anything with people in processes where you have that influence

yeah that could be in a classroom that could be in a boardroom that could be on

a court that could be in a lot of different areas so the doors I feel like

just flew wide open of opportunity so let's put you on the spot Brandon so

you're 21 so what would you what would you try tomorrow try not commit to for

the next 10 15 20 years what would you try tomorrow if there was zero pressure

to succeed you knew you were going to be good at it and we could pay you what you

needed what would you try I guess I've always wanted to open and run sports

facilities or I mean just facilities in general but obviously sports is back

okay I'm in all right so maybe that even owning it great so let me give you two

strategies how much are you making right now and what role or what kind of work

are you doing and how much you're making I work part-time right now because I'm

still in college I make about 30,000 as a part-time tennis coach oh wow good for

you and when were you graduating with what major we'll graduate in December so

that the fall semester I'll finish that with an exercise physiology degree okay

so here's what I think you were attracted to the PA or the PT I think

you've seen a lot of that given your your your involvement with athletics and

coaching and I think it's helping people and I think you have a heart to help

people but I think the minute that the baby came in you're like this is not

something I really wanted to do I thought it was a good professional track

now it's going to cost me money and it's forced you to go what is it that I want

to do so is that true I want to make sure I'm not putting words here so

here's what I would do if I were you I think you have two tracks to run and you

could do this simultaneously I don't think you go get a loan obviously we

don't believe in borrowing money or just try to start a facility so I would start

with who in your area where you live operates these type of facilities and I

wonder if you don't reach out to them through some kind of connection could be

first degree second third fourth degree take them to lunch take them to coffee

say I just want to pick your brain on how you got where you are and what

you're doing I would learn enough to go what are your margins how difficult is

this to be successful I mean just go to school on somebody around this idea that

you had and then the second track could be you might get a job with somebody who

needs a sharp young guy coming out of college who's coached who loves sports

and maybe you go to work for somebody like that and learn the ropes before you

ever confirm that you actually want to own your own place this way we take all

the risk out and you learn and you get a good idea what you're thinking that's

what I'm gonna advise you right now and I would say the same strategy if you get

another idea later today but I want you to hang on the line Christian let's get

him the new book find the work you're wired to do comes with the get clear

assessment you're gonna get your results and I think it's gonna confirm a lot of

what we've discussed but when you get the clarity on who you are then Jay

that's when you're able to answer that intimidating question of what do I want

to do and where can I do we got to start with the who and that clarity gives us

confidence to move forward thanks for the call brand and we'll be right back

this is the Ramsey show

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welcome back to the Ramsey show I'm Ken Coleman Jade Warshaw is alongside the

phone number is 888-825-5225

ok Jade I want to get you to weigh in on something that is honestly a little

bit shocking to me I don't know why I'm shocked by it I just think it's such a

bad idea I'll let you kind of weigh in on this but it's going to make it's

going to we're going to get a lot of these calls I think so we're going to

get out in front of this

yeah so in my hands here what you got I've got a headline new 401k rule makes

it easier to tap savings 401k savings for emergencies

Jade say it isn't so I'm like Michael Scott when he's just like no that's the

way I feel it's this is terrible

this new law will make it easier for Americans to use a 401k and other

retirement funds as an emergency ATM

Oh Americans can now withdraw up to $1,000 from their 401k without any

penalties if the money is needed to cover a financial emergency now before

you could take hardship withdrawals but this kind of takes it a step further

acceptable reasons could be medical care funeral expense auto repairs but here's

the difference or any other necessary emergency personal expense who

determines that you don't have to show proof of it so with the hardship

withdrawal you kind of had to do the paperwork blah blah blah with this you

don't really it's just up for grabs you have access to this I think you have it

every year it might I think it's every year that you have this available to you

but obviously if you only have $1,500 you know in your 401k or something you

can't go below $1,000 in your 401k so you would only be able to get 500 but

this is what it says savers are allowed to make one $1,000 distribution per year

for the said emergency yeah but here's the kicker the funds must be repaid

within three years savers will still need to pay income tax on that withdrawal

if they don't pay it back and they will not be able to make an additional

hardship withdrawal oh this is awful so I mean I get it like I get why they're

doing this it's it's it's that classic you know I'm not trying to be ugly but

it's that classic American way right problem wrong solution right it's like

yes you know this change comes as a growing number of Americans tap their

401ks because they're having a hard time dealing with inflation and the fact that

prices have gone absolutely bonkers and so yeah right problem Americans are

struggling wrong solution right we always it's like okay we'll get a credit

card okay we'll borrow from your 401k it's like the worst possible advice that

you could give somebody but luckily here at Ramsey solutions we're about

solutions so we can give you some better solutions but this really draws the

picture around for me Ken why we teach what we teach okay so obviously we teach

a set of baby steps seven of them but the first four are the ones that I

really want to call up right now to discuss because these are the ones that

people struggle with right we always say okay baby step one you save a thousand

dollars and so many people can want to just jump on our back a thousand dollars

that's not enough and I'm like clearly it is yeah because that's what people

need and we know the statistics this stat is constantly changing but it's

somewhere around the point that 36% of Americans have zero dollar saved and 15

56% of Americans could not cover a thousand dollar emergency in cash like

they'd have to go to a credit card so having a thousand dollars saved in your

money your cash that's baby step one then everybody knows baby step two yeah

you're paying off the debt but what really gets people is we say don't start

investing until baby step four after you've paid off your debt after you've

done baby step three save three to six months of expenses and that really gets

people right here in the heart that's right why would you say that don't you

understand compound interest yes I do but this is really a behavioral and a

risk problem that we're solving for it's exactly right and to your point you make

a great point that the government is limiting you to $1,000 distribution from

your own 401k but you're paying taxes on that yeah and interest and you're yeah

that's you robbing yourself so you're not even getting the thousand dollars if

we use the Ramsey method you're saving the thousand dollars it's your money and

it is there in its totality yes when you need it yes and so I think you make a

really great point so the federal government and Ramsey solutions are on

the same page about the number yeah 100% you're not getting $1,000 of value

when you borrow from yourself you're not my gosh and a lot a few people do the

math on the opportunity cost there but if you're constantly and I'm not saying

like this is something you do every month because you can't but if you're a

person who creates the habit of saying you know if something goes wrong I can

just hop into my 401k and pull out you know I can do a 401k loan I can take

this thousand dollar distribution that is a horrible habit to create it's kind

of like you know if you have cookies on the top shelf all it takes is one time

to go in that jar and once you get a taste good luck to you like good luck

because you've realized how to get to the cookies it's really not that hard

now you also know how they taste it could solve the problem for you you've

created this cycle but Ken let's talk about why we say baby steps one then two

then three then four okay first off you have to think about risk right as long

as you have debt in your life there's risk something goes wrong you don't

make a payment you lose your job everything is up on the table and if you

have debt and you don't have an emergency fund where's the first place

you're going more debt yeah credit cards all the time people use credit cards to

make it through mm-hmm or if you say you know what I'm gonna try to do it all

that once I'm gonna put a little bit of money to pay off my debt but put a

little bit of money to go to my 401k cuz after all I get a match I don't want to

miss that if something happens if there's an emergency where's the first

place you're going right to the 401k so we're creating this kind of one step

forward two steps back one step forward two steps back as opposed to just saying

okay I'm gonna walk in a straight line and I'm gonna keep going forward even if

in the moment it feels like I'm going a little bit slower you're not you're

making more headway and so there's there's thoughts behind this guys not to

mention when you just wait till baby step four you can invest 15% because all

of your income is open to you it's not just getting the 3% match right all of

your money is there and you're gonna be able to make up any time that you may

have lost lost in air quotes doing baby step two so this is a proven plan and so

your options really are go with the folks on the radio who are telling you

about the proven plan or don't do the proven plan and I don't know what the

IRS let them give us guidance I promise you you know because it's in this

article it's interesting here's what we know historically about this in the past

people who are making these types of withdrawals from your 401k owed the

income tax on the money couldn't even pay it and then you could also be hit

with a 10% early withdrawal fee and they're under the age of 59 and a half

so this is another trap that looks like it's there as a safety line right like

I'm gonna throw out the what do you call the things when you're the safety net

buoy thank you you know so you throw that out here and we're gonna be a line

to pull you back in and in this case you actually are creating a bigger emergency

for yourself in the midst of an emergency like that's the whole point

and so you know let's talk about this we just we only have just a couple

minutes left because I I think Jade it's still very hard for some people mm-hmm

and this is out of respect and dignity that I say this but based on the income

that they make yeah and the current cost of everything in this world inflation is

still high yes amassing and I use that word on

purpose yes thousand dollars feels like it is amassing oh one thousand dollars I

want to give it to you here for some people let's talk to people right now

who go baby step one get $1,000 a bank Jade I am broke I'm barely making it

mm-hmm what would you say to them to go okay here's hustling gritty I know it's

hard work yeah but practically speaking some of the best ways to get $1,000 in

the bank in America today I think the quickest way you're gonna do that is to

start selling stuff if you're talking about I need money today that's what

Facebook example we're selling clothes I'm selling clothes I'm selling anything

that someone will buy mm-hmm whether that's instead of giving stuff to the

goodwill see if you can sell it on these offer up sites and Mercari sites and all

these sites I'm picking up as much extra work as I can I don't care anybody can

work a phone service customer service job do it at night they're looking for

night shifts there's these baby sitting dogs anything it's temporary most people

when they really put their foot on the gas they can get that thousand dollars

saved in 30 days if it takes you 45 days I'm fine with that as long as you're

going hard in the paint yeah I love talking about basketball reference right

there if you're non sports fans she's talking about throwing elbows leaning

shoulder into this debt we're gonna do what it takes to get the money don't

move we'll be right back this is the Ramsey show hey folks there's a lot of

half-baked investing advice out there but here's what you can do to get more

confident about this stuff check out the smart Vestor program smart Vestor

connects you with local financial advisors who have the heart of a teacher

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of participating pros learn more at Ramsey solutions comm slash smart Vestor

welcome back to the Ramsey show I'm Ken Coleman Jade Warshaw is alongside the

phone number is triple eight eight two five five two two five triple eight eight

two five five two two five okay so this is fun during the break we got an update

from James the fearless leader our producer and apparently you and Dave had

a fun call a couple days ago on the show and and not only was it fun I guess we

have a even more fun update so yeah tell us what's going on yeah well first off

when y'all call and I remember so Juwan called in he was from Springfield

Missouri I believe and Springfield Illinois Springfield Illinois okay

they're they're close they're close I'm going off memory here I'm going off

memory okay it doesn't matter so Juwan calls in he had he was living with his

girlfriend I believe she was pregnant but they already had two kids it was

like one of those situations where like Juwan Juwan you got to get married dude

marry this girl show her that you care put a ring on it and don't you know this

guy emailed in he was like hey you want to know what I'm getting married what

did he say James he said hey the advice worked I'm getting married tomorrow

tomorrow now did he agree with the advice right away or was he a little

standoff he did matter of fact I believe Dave was like oh he's crab walking like

he's acting like he's saying one thing but he's doing another and so both of us

were like man is he gonna do it I don't I don't know if he's gonna do it he

decided he made a decision good for he followed the advice there you go

he's not gonna he's not gonna regret it but if you hey by the way if you've

ever called into the show and you did the advice let us know let us know that

we do love we do love though where are they now where are they right that's

always kind of fun yeah hey real quick some of you are going all right election

year what's the Fed gonna do and you're thinking about buying or selling a house

uh-huh and we don't think you need to be on the sidelines we think you need to be

doing what you need to do but doing it with the right person that's why I want

to tell you very quickly about our Ramsey trusted program to help you get

the right pro the right agent that you can trust to keep you on track with what

we teach and get the best offer on your house or find the right house so these

are the top agents in your area who we trust and then you get to review them

interview them and decide if you want to work with them Ramsey trusted agents are

where you need to be going if you're thinking about buying or selling a house

Ramsey trusted real estate agent is sitting there waiting for you to find

them for free all at Ramsey solutions.com slash agent again that's Ramsey

solutions.com slash agent all right Stephanie is up next in Vancouver and

she's on line four there she is Stephanie how can we help hi guys so

back to earlier thing I follow baby step one thousand bucks is definitely enough

to get you going all right hey real quick tell people give

us the 20 seconds how you amassed your $1,000 so they can learn from you

basically we cut things in our budget as hard as we could

things like what? we did sell some stuff things that are unnecessarily

unnecessary subscriptions we started doing a budget

that's a good point right there and you found some money

we started doing one my husband and I hadn't put our money together so we were kind of

wasting the money in a way because it wasn't like we were aiming at the same

target it was like trying to shoot a cannon at two things at one yeah it was

just not working Stephanie teach the lesson very good yeah no I was pretty

good and like it hit everything we've had like little minor ones come up that

we've used to reach for a credit card for and now we use our own money I love

that good for you and by the way Stephanie mentally if you have to dip

into that it's also a lot easier knowing I did it once before I can I can fill it

back up isn't it well yeah and honestly I was on maternity when I first when we

first started and I'd gotten to $750 and then I didn't get a payment from my

government and I had to use it and I was just like wow look that's actual money

and not debt that's right good for you thank you for the testimony on that so

Stephanie how can we help you today what's going on okay so we're going up

and we started at a hundred and ten thousand and we are at like fifty five

now fifty five fifty six we started with about twelve debt and now we're down to

about five we're working right now on a line of credit when that one's gone it's

with the bank and it has a much lower interest rate than some of our other

debt so what we're thinking is instead of just paying the minimum payment on

the debts just taking the line of credit and wiping one out so that we're

paying a lower payment to have more margin now I mean I know that that's

transferring debt but it also is increasing our margin and it's not

opening a new line of credit my husband and I have had some debate on this

including if we were to do that should we do the car first because it has a

bigger payment or anything like that and I looked on the Ramsey information and I

didn't find anything specifically with open lines of credit let me jump in like

let me jump in to make sure I understand you before you go further

because I don't want to lose where you're at so you're saying you've got

five debts left and one of them is a line of credit that's open and are you

wanting to transfer the other four on to that line of credit is that what you're

saying that line of credit is $10,000 we have two thousand nine hundred left on

it all of our other debts are around twelve or thirteen thousand dollars so

what we're hoping to do is kind of use it as a vehicle to get the payment much

slower to be able to smack them out faster so transferring your current debt

into by basically putting it into the line of credit like she's asking and we

know it's we know it's still debt but what we're hoping is that we can get

more margin and more tracking with it you're doing that because of the

percentage rate or because you think it'll free up the other payments and it

will because because the master card we have two master cards and a visa the two

master cards are both at about twelve five and the visas about thirteen three

the visa is negligible because it's the same interest rate pretty much as the

line of credit I hear how you're thinking I hear how you're thinking you

do a lot of math and and let me validate this because I understand what you're

doing right now on a heart level like when you've been working the baby steps

you do get to this point where you're like okay what can I do to work some

magic here and you start moving eggs around you're like I could do this I

could do that and you start kind of the you start finding ways that you think

will work better but really they're kind of veering you off course and

here's what I would say here's why I wouldn't do this you're there's part of

what you're saying that makes sense and I'll validate that yeah like if you have

a high interest rate why wouldn't I move it somewhere where there's a lowest

interest rate if I can make all this form into one payment that's going to be

lower than these other payments over here and free up some more money why

wouldn't I do that I hear what you're saying however the negative side of this

and it's a big negative one of the beautiful things about the debt snowball

is you have all of these debts and you can list them smallest to largest and

you can check them off your list and something that dopamine when you check

one off the list is enough to keep you going to the next one I would much

rather have five debts of $10,000 each than one debt of 55,000 I would much

rather have three debts that's 5 15 and 20 then one debt that's 45 do you see

what I'm saying like I don't want you to group these together because then you're

gonna get the satisfaction of paying them off one by one because that is a

grand motivator in this whole thing well and the line of credit it does max out

at 10 so I mean we would still be paying off like the remainder of the balance on

each line on each thing but it would just be like quite a bit less yes but at

that point the difference is so negligible like at that point money wise

it's so negligible I you're grown you can do what you're you're going to do

what you want to do but if you're asking my advice I truly think that you

should keep these as are because if you run out the interest by the way anybody

if you run out the interest on the debt snowball it's gonna be negligible what

matters is finishing it that's what truly truly matters so and we're like

well you know it will make it like a little bit faster but the difference is

only going to be you know a couple hundred bucks either way yeah and then

you're dealing with a $10,000 chunk again whereas right now it's at 2,900

right yeah so you know it that way mentally you're kind of restarting like

okay I thought this thing was almost gone now I've kind of like refilled it

and I've got a big another big chunk of debt to pay off and I mean I don't even

want to know what the difference in interest rate is because we've seen the

math on that so I I wouldn't do it say again this is gross

the interest rate for the line of credit is like 11 and the interest rate for the credit card is like 27

yeah I mean I know these credit card rates but I will tell you that's gonna

light the fuel to get it done and I mean that's what I would do all I could tell

you is what I would do and I stand by that yeah well and and and so we have

been consistent on that I mean we get this call a lot it's not the first time

we've heard that and again we teach discipline and momentum is what is at

the core of what we are teaching it's discipline for momentum so do what

you're gonna do people do but you called us and Jade laid it out by the book so

really good stuff there Jade all right Wow another hour in the books thank you

for listening this is the Ramsey show

this is the Ramsey show where we help you win with your money win at work and

win in your relationships 888-825-5225 888-825-5225 is the phone number to

jump in we're here to help you we've got your questions Jade Warshaw joins me

I'm Ken Coleman and we're so excited that you are with us today let's go the

phones are lighting up Joshua starts us off this hour in Idaho Falls Idaho

Joshua how can we help hey there how are you doing good how are you today good

hey I have a two-part question first question is what is a reverse mortgage

and the second question is how do I convince my mother not to do it it I

haven't heard of it I follow your guys's baby step so I just want to get some

more information on that so your mother-in-law is wanting to do a reverse

mortgage that's right why well from what I can gather she doesn't have a lot in

savings or anything like that she doesn't have a lot of retirement from

what I can tell okay so I think this is her way of maybe skipping that step or

something I'm not sure okay so not a lot of how old is she about 60 oh gosh I'm

gonna say no on I will always say no to reverse mortgage so basically what she's

doing is letting the bank take over and they they own it they're making a

payment she's still you know on the hook for taxes and insurance and everything

like that but once the money runs out that's that and she's so young like

there's a lot of time for this to play out and a lot of times if that person

were to pass away that goes to the heirs and they're left with a home that's

either upside down or home that's I mean these end in foreclosure there the

foreclosure wrote on the rate on these is just astronomical so I would not

suggest that I would suggest something that's going to kind of help her get a

hold of her situation so I don't you know tell me more about your

relationship with her are you the son that can kind of pop in and say okay

let's look at your money let me help you with this would she let you help

probably not no cuz it did do you say this is your mother-in-law no this is my

mother okay I'm sorry mother okay okay all right that's what I thought but I

wasn't sure so so you don't feel like you can do that no yeah well listen

here's the deal um with that being said I don't know what you do other than try

to explain it to her not try to talk her out of it as much as go do you realize

this is essentially you're borrowing money on the equity you have in your

home would you like to get to a later date mom and have no equity in your home

cuz that's what this is I can't believe she would go for that would she it's you

know one of those deals where she's talking to her finance friend or

something like that and they gave her this idea and now it sounds real good

you got any siblings that have a better relationship with her not really I mean

at the very least you could play out the number I mean I don't some people

respond well to math some people just fall asleep right at the very least

maybe you run the numbers I don't know how much equity is she yeah how much

equity does she have because you don't have access to 100% of it only a portion

of it so right if you had to guess what do you think I would guess maybe she has

200 on a $300,000 home oh my gosh oh this is horrible yeah cuz cuz the

people let me put it like this cuz there's no real smart way to do this but

the people who think they're smart doing this think okay I've got a lot of

equity I'm 86 years old not to sound morbid but I'll probably pass away

before I run through all of this equity that's what they're thinking and so

they're like if I don't have anything left to leave I'm fine with that this is

what I'm gonna eat off of right but in this case I'm like fees fees alone are

gonna eat up so much of that and I can't remember off the top of my head you'll

have to check it for yourself what percentage of that is actually going to

be available to her I think it's only 60 I can't remember but check to see

what of what percentage of equity is actually available but that's what she's

got to realize this is a this is not even a solution it's not even a band-aid

this is like when you just kind of wipe wipe your knee on your shirt right to

stop the bleeding for a quick second she's gonna end up without a home this

is gonna end in foreclosure so we've got the solution here I think I've painted I

don't didn't have to tell you how bad of an idea this is but what we've got to

get her to see is okay how do we solve this problem what social security what's

she living off of what does she need and is she on a budget so those are the kind

of detective work that you're gonna have to do and I think that it's you sitting

down with her and saying listen mom this is your life but I'm your son and the

truth is if we if you don't let me help you now you're going to assume I'm going

to help you later when it's too late right so in that way you do have a stake

you're a stakeholder in this and she might not see it now but that's kind of

the picture you have to paint like listen I want to help you now where when

it's not so much of a burden to me as opposed to you cutting me out because

when you're 80 then I'm gonna have no choice and then I'm gonna be a little

bit pissed because I tried to help you when you were 60 how old is she a 60

okay you know you can't even qualify until 62 yeah she she's she's thinking

about it now though so I know but here's the other thing I checked I wanted to do

a little research while Jade was talking Jade's right the range of money you get

is between 40 to 60 percent of the equity so she's got 200,000 in equity

that's hardly the range is is 40 to 60 and I do think that instead of the

emotional conversation with her because it's very hard to tell your adult mom

and there's obviously some stuff going on there you know you don't feel

comfortable it's almost laughable the idea of sitting down and talking to her

is the feeling I'm getting from you by the actual laugh so I wonder if you

don't just show her the numbers and just say there's a better way mom and help

her ideate on how she comes up with it what what is the actual amount of money

she feels she needs to get her hands on I don't know yeah you got a dig man

this your mom you at least gotta ask you just heard her say it and you're like

ooh warning sign like I wouldn't go in there coaching her up but I would ask

some questions and not make her feel like she's on the defensive but ask some

questions ago hey mom I did some research on that that's not a really

good deal for you because you're really young and start running numbers see

numbers aren't emotional so life expectancy do your homework on what that

is she's 60 the actual amount let's run the numbers on the 40 to 60 percent that

Jade was talking about of the 200,000 is what she's gonna be only eligible for

by the way she's on the younger side of this she will just have turned 62 the

people that get 60% that Jade was she was right but those are older people so

she's not gonna get 60 she's probably gonna be yeah let's assume 40 to 45

percent that's right so by running numbers with her it's kind of like hey

I'm not telling you what to do mom like show her some respect some dignity not

the know-it-all hotshot son hurry in the numbers mom and so of the 200,000 you

know 40% is this so 10% is 20 so usually what 40,000 she can only get way

whether 40 is more than that so so you start running those numbers and you show

her okay you're gonna have this much cash mm-hmm that's what the most you can

get mom and then let's play this out you have to pay it back when you sell

when you move permanently or you die and then you got to start walking through

what do you need the cash for yeah because what if you go to sell the house

and you you know you've taken all the equity out you're upside down and by the

way that passed that burden passes to you right I just think I I think the

only way to get her to get her talking about this is asking questions and not

putting their own don't make statements could that put somebody on the defensive

but I think you got to hope that she sees the numbers and goes oof this is

this is not a good idea thanks for the call man you're good son but I would

step into the conversation this is the Ramsey show listen up trying to reach

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win with your money win in your work and win in your relationships 888-825-5225

is the phone number we'd love to hear from you 888-825-5225 I'm Ken

Coleman Jade Warshaw joins me and we go to Alan now who oh wait a second I got

ahead of myself how could I forget Gregunta in my hands the question of the

day and it comes from Matt in Minnesota yeah he says I'm a young attorney and an

aspiring stand-up comedian I'm single with no kids no student loans and a

great job in my field however it has always been my dream to be a comedian I

have my feet planted in my local scene but if I continue to but if I continue

to gain some traction I'd love to pursue comedy full-time which would require me

to quit practicing law in the capacity that I do now I'd also like to have I

also would likely have to relocate to a major city such as Chicago New York or

Los Angeles this change is a couple years down the road but in the meantime

what steps would you advise me to take from a financial standpoint in order to

put me in the best position to succeed as an entertainer in the future I love

this question so much I got some ideas to what say you I think that listen I

love that you're a comedian the first question I always ask are you good like

I want to know are you good and don't ask mom don't ask grandma don't ask a

family member get real feedback as to if you are good and if this is something

that you can't even become good at because everybody thinks are good so

that's part one of that's the first step in this journey like em do I have what

it takes by the way this industry it's pretty easy to know yeah because if you

keep getting invited to back to comedy clubs because here's the deal people who

own comedy clubs they will not put in a comedian who sucks no just won't so

that's the good news plus you're gonna get feedback from the live audience live

audience it's kind of hard to be a delusional comedian yeah kind of hard

and put yourself out out there like in a lot of different environments not just

the same environment um so let's talk about this practically number one I can

tell you about my husband and I right because we're we started as

entertainers my husband's still an entertainer and I will say you have a

great situation where you're practicing law it sounds like there might be a

portion of that where you don't necessarily have to do it full-time if

you're kind of in your own like doing your own thing maybe there's some work

that you can do on the side but my point in saying that is until you are doing

comedy full-time you do have to have a day job like there's got to be something

that you're bringing money in and it is nice to have if you can now secure three

to six months of expenses or a little bit more that is going to be really

great for you because it kind of frees you up it's like okay I'm waiting tables

in the day and I'm doing this thing at night or I'm taking a couple of cases

you know here or there the easier stuff in the day and I'm doing this comedy at

night and for you it's about chasing down the right agent to make sure this

person is really helping you get booked which by the way is a clue to what we

talked about earlier Ken if you're having a trouble getting an agent you're

not you're not doing your matter of fact first time on the Ramsey show

Christian's gonna pick up before you leave my husband's an agent we own a

talent agency so I'm gonna give him my husband's phone number or not phone

number email address you can email him and he'll review he'll review it for you

okay and so we'll tell you or not and we will be honest and if you're good we

book cruise lines so hey there you go okay well I'm gonna pick up on that part

of the advice I love this I would do a couple of things one I would be if I'm

getting paid anything even small stuff for local clubs or gigs that that maybe

that Jade's husband gets you or whatever I'd be stacking stacking stacking I agree

with it I would do 12 months I would not move to a city to go all-in on comedy

until I had 12 months expenses because you're a lawyer you are not going to be

desolate and homeless living under a bridge but I would give yourself 12

months to absolutely go all-in 12 months expenses would be a minimum for me to

the extent that you could save up even more beyond that is all gravy but I

minimum 12 months yeah the other thing is I would also challenge your your idea

that you have to live in those cities true I'm gonna challenge that I'm not

saying that I'm right and I'm not saying that you don't have to but I would I

want you to dig into that a little bit and go okay I understand why you're

saying New York LA Chicago because legendary comedy clubs there's more of

it a lot more places to work however I love the idea of an agent or a promoter

behind you like Jade's husband because listen man you can make really good

money on cruise ships cruise ships and there's land circuits that if you get

the right agent like I have buddies that don't live in those major cities like I

can tell you right now like there's circuits in Phoenix in the Arizona area

and Texas where it's like you live in Fort Lauderdale but they fly you out

there and you can do three months of that's all I'm touring like there is

real there's real networks out there so yeah lots of options that's where I was

going is okay I don't have to live in Chicago but because I'm in a great cash

position and I'm making really good money I can zip in zip out mm-hmm it

doesn't hurt to be you know in Atlanta Chicago I get it does Vegas proximity

matters it doesn't there is no question yeah that's why I'm saying that loosely

mm-hmm I don't know but I tell you this I could figure it out yeah I mean talk

to comedians and I could figure it out pretty quick and you can do the same

because you know the industry so thanks for the question really good stuff let's

go to Alan now in Kansas City Alan how can we help today hi thank you for

taking my call so in the next 60 days or so I'm gonna be going and purchasing a

new car I'm gonna be paying cash for it it's gonna cost me around 30 to 32

thousand I'm just trying to find out what's the best way to negotiate to make

sure I get the best price I mean should I just go in and tell them I don't need

to speak the financing or should I kind of string them along are you just a

brand-new car let's talk brand news it's gonna be brand new yes and you've got

the 30 to 32 thousand saved up cash yes all right what's your income about a

hundred and twenty thousand okay do you need this car like is it you need to get

a car I'm going to be my car I currently has near 200,000 miles I'm

basically gonna drive it for as long as I can but it's gonna be okay my point is

you're not desperate like that for me currently Ken will give you the good on

this but my number one thing is I never like to go buy something in a desperate

state I like to feel like I can move on like I can go to another dealer I can go

to another law I can move on to it like that there is so much power and being

able to go yeah yeah here's what I would do in this situation I would do your

homework on it and just see what what that car is going for at multiple

different places I'm assuming you've got the car and the the actual you know

exactly what you want correct yes I know exactly what I want yeah you know they

all these car lots by the way they tell you no haggle but I've just bought cars

for let's see I got one for my wife I got one for my two boys so I'm I am

blaming the middle of this and I will tell you here's what I've learned Jade

the no haggle doesn't include all these ridiculous fees they stick on it that's

true so they all these car lots now say no haggle I did a very popular segment

on the show call we need the haggle we need the back we need to more we like

what happened bring back the haggle bring back the haggle I mean so here's

how I would do it I'd walk in and you can go look I know that you guys this is

your no haggle pricing but um let's say it's a $32,000 car and just go I can't

go I can't go over 28 and they're gonna look at you the guy's gonna go well let

me go talk to my manager but here's a deal I love it I just sit there and look

so like I'm ready to leave like I can't get out there fast enough and they know

I got Ken on I got this guy about ready to leave I gotta hook him so here's what

they start doing yeah you look at this say give me show me the sheet show me

how you came up with 32 what's the 32 5 they give you sheet by the way you start

going what's this fee title what's this for just go paperwork I don't know what

these fees are I'm not paying these fees I'm only gonna give you this number and

it needs to be lower than what they're doing and I had this happen now I walked

on all of them Jake yeah but multiple times I had car dealers drop the number

so this idea of no haggle is not true yeah haggle away and so that's how I

negotiate go to listen I'm a cash buyer this is what I'm looking for I'm not

gonna pay this so I'm gonna go until I get this price and I'm almost guaranteeing

you you'll get the price that you want I will say though it's tougher it can be

tougher with the cash because they're not making any money off of that they

only make the money off the finance so in some ways I go oh by the way you have

to push push yeah maybe but Alan I'd also go at the end of the month to

always go at the end of the month when they got to hit their sales quotas you

know they got to close some deals last day of the month in my opinion is always

the best day to buy a car because they got to close a deal and it's got to be

my deal that's how I would do it but you can try it another way this is the Ramsey

show listen tickets for the live like no one else cruiser selling fast this is

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welcome back to the Ramsey show thrilled to have you with us I'm Ken Coleman Jade

Warshaw joins me in studio 888-825-5225 is the phone number the best way to make

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Google Play that's every dollar download it for free in the App Store or Google

Play. Liz is up next in Spokane Washington Liz how can we help. Hi Ken, hi Jade I have a

question about buying my first house. Okay. So I am 26 I make $140k per year my

take-home pay after taxes is about $110 per year I have no debt I have $60k in

retirement and $60k in cash I'm starting to kind of think about what it's going to

be like to buy my first house however I'm really really debt adverse and the

thought of getting a mortgage is absolutely terrifying so I've always

wanted to save up and buy a house cash that's kind of always been you know my

goals that I would hope to do so currently I'm saving about $40k per year

in cash savings and so at that rate where I live it would take me probably

six or seven years to save up for a house which would be okay but I'm afraid

that in six or seven years you know houses are not going to be $300k now

they're gonna be $400k and so I'm afraid that if I save up and buy cash I'll be

spending you know 10 or 15 years saving sure and then paying essentially double

what I would have paid if I just bought now yeah I'm just kind of torn between

getting a mortgage or not. Yeah there's a part to that where you're chasing you're

constantly chasing you know that that rainbow as far as the house price is

concerned so while I agree with you being able to pay cash for a house is

excellent and that's really the number one way that if you can buy a house you

should buy a house but there it does come a point where you know for the

average person with their average salary there is a point where it's like okay

shouldn't I just jump in already and I think in your case the answer to that

would be yes but at what point um so just to recap no there's no debt you

said you have 60k in cash 60k in a 401k is that what I heard is there any other

liquid money because the 401k doesn't count okay yeah and it's not just 401k

it's mostly Roth there's some in a Roth some in a 401k and then a little bit of

that is just personal investments I think maybe about 10 to 15 K okay the

10 to 15 K that's personal investments like a brokerage account non-retirement

yes ma'am okay and is it what's that year marked for

retirement as well I my current career track I plan that I'll probably be

retiring before I'm able to withdraw from our retirement okay so it's like a

bridge a little bit yeah okay so that's earmarked for that so that means we

won't touch it is it in mutual funds it's not in like single stocks and stuff

like that correct it's a mutual fund good deal okay so right now unless I'm

missing something I'm seeing a person with a great income with three to six

months of expenses which is basically your 60k that's around six months or

more what portion of that 60 K can you put towards a down payment so my

expenses right now are actually really quite low and so I only have 10 K of

that as my emergency fund and then the other 50 K is currently my house fund

okay so 10 K how does that work you're saying that you can exist for six months

on $10,000 no that's three months okay yeah are you comfortable three months

okay you're saying okay here's I'm just I'm poking holes in this because since

you're afraid I want to make sure that everything is right on so you don't have

to be afraid of anything here's where I would poke holes in your emergency fund

a because it's the only income you have going in and it's just you one stream of

income makes me want six months of expenses because if something happens

it's all it's all on you so that's the first thing that I would beef up and

that's gonna make you feel better second thing I'd beef up is if you buy this

house you're like what it takes to keep your life going also goes up slightly so

if you really want to feel great about this you'd kind of project it on and say

okay if I get this house for 280,000 or for 300,000 what's my mortgage gonna be

what's my life gonna look like and what really what would six months be of that

lifestyle because that's the lifestyle you're going into that might be what I

would shoot for in your case right what you're going towards and then from there

it's like okay now let's talk about our down payment to your point you're saving

$40,000 a year how much do you need to have like what do you want to get to do

you want to get to 50% down do you want to get to 40% down 20% down so I would

start running those numbers out I wouldn't go beyond like a two-year

three-year deal on this that's as long as I take to save up assuming you've

already got the five to twenty percent gotcha okay so yeah I definitely want to

do 20% minimum I'm not really willing to do any less than that but you think

instead of saying okay I'm gonna save up to 50% I should say all right I'm

gonna save it for three years and as long as I have over 20% yeah I'd either

set it at a dollar amount or a time amount and that's up to you because part

of this is I don't want this because you're if you're toggling between baby

step 3b which is saving for the down payment and baby step 4 which is saving

15% I do want a time limit on this because I want to make sure that you're

investing 15% sooner than later but if you're not toggling if you're like

listen I'm doing the 15% now and I still have a lot of margin yeah play with the

three-year span but like I said I I mean Ken if it's me I'm pulling the trigger

at least after like three years I don't think I'm gonna run I agree I agree with

your reasoning because you want our investing and we want you to start to

that to get the compound interest going how old are you I'm 26 oh yeah so Jade's

got you at 29 you know and still that that gives you a lot of time to invest

the other thing I would be thinking about is is okay let me rework this and

go all right this number I want to get if I wanted to get to that number I

don't mind you shoot for 50% down don't think you have to and I agree with Jade

but let's say you want to do that you're single now so I would start to go what

would I have to do and how much would I have to make in addition to what I'm

already making and saving to get to that number in the same three-year period I

would at least run that exercise right so for instance if you said to me and

I'm making this up I'd have to save another $20,000 a year I'm just using

that as a random number in order to get to this number within three years at

Jade is coaching me on because I think Jade's absolutely right on that two to

three years to me is is right so I would then go all right so if I got a if it's

20,000 more than that's X amount a month I've got to save I'm gonna go make that

and and I'm gonna make this thing happen faster I just think that would be

something I would consider yeah I mean three years you said 40,000 a year three

years gets you 40 81 20 yeah right yeah so let's say great if she wanted to add

an additional 20 per year there you start you start breaking that down and

that's you know less than $1,500 a month or right at that right

but it's my math right no no it's a little bit shy of that so it's just a

bit above $1,500 more a month get you an additional 20,000 so so you know it's

that kind of thing just to start looking at all your options to go oh okay but I

think Jade's right in wanting to get you investing that 15% as soon as possible

well so and I think that's part of it as well I am already investing currently my

my savings that gets me to about 40 K I have about 60 K of extra income per year

that I don't need or spend on anything and so currently 40 K of that is going

into savings and 20 K is going into hitting my Roth contribution and then

extra investing on top of that so are you investing more than 15% yes I am

okay I would swap that I would there's your money right there hit 15% that's

max right now focus everything else at the down payment and then once you buy

the house now that extra money goes to pay off the house and then you're gonna

have exactly what you want really really quickly which is a paid off house

that you don't owe anybody on and then once the house is paid off then you can

take that margin that you have and it can throw all of it out of your

investments so number one like Liz you're you're amazing hey I want to make

sure that you have everything you need you can check out Ramsey solutions

comm slash real estate and it's a hub that's got everything that you could

ever need and when the time comes for you to actually get the house and start

looking you can go to Ramsey solutions comm slash agent and that's where you

can find a really great agent to help you find the perfect house for you in

your price range yeah awesome love that and love just how focused she is man I

wasn't like that at that age shouldn't me she's gonna be fine one way or the

other and I thought that was a really good advice now now it's nice to know

she's actually already invested the 15% so really good stuff all right we got to

take a quick break but we're not going anywhere we don't want you either she is

Jade Warshaw I'm Ken Coleman and you're listening to the Ramsey show

welcome back to the Ramsey show thrilled to have you with us the phone number to

jump in on the conversation is triple 8 8 2 5 5 2 2 5 triple 8 8 2 5 5 2 2 5 I'm

Ken Coleman Jade Warshaw joins me our scripture of the day comes from

Proverbs 21 5 the plans of the diligent lead surely to abundance but everyone

who is hasty comes only to poverty our quote of the day from none other than

the Fresh Prince himself a Will Smith being realistic is the most commonly

traveled road to mediocrity a little bit of a mic drop will I know big Willie

Stiles I would say he slapped us with some common sense there but probably

not the best very good can you like I'm in there he's never gonna get he's not I

I'm all for restoration and rehabilitation you can't you can't he is

never going to live that now never as great a work as he has done I know that

I still love Will Smith but that was a wacky moment in time let's pull man man

Wow it's still shocking to me I was watching it live I was on a plane I

thought it was a joke I was on a plane you know and you're live streaming and I

was like yeah yeah I thought it was uh I thought it was an act yeah and then I

saw it in slow-mo and I was like nope it ain't an act not an act Wow all right let's go to

Beth in Seattle Washington Beth how can we help today hi I'm so excited to be

talking with you thanks for taking my call you bet we're excited to talk to

you what is happening I'm wondering if you guys could help me think through a

framework for deciding how much money I should put into my kids 529 plans okay

I've been making some Ramsey tools but I'm getting stuck and I'm so excited to

talk to both of you because Jade I know you have young kids which is where I'm

at and Ken I know you have a really good pulse on this college collegiate

environment well tell us about the kiddos yeah so start with tell us how

old the kids are and what you've got saved or what you were thinking about

saving yeah absolutely okay so I have a four-month-old a one-and-a-half-year-old

and a three-and-a-half-year-old and right now we are just putting in a

couple hundred dollars a month for each kid into their 529 mm-hmm but my

husband has like quarterly stocks that vest so in the future we want to put

something bigger and I've heard Dave tell folks like hey if you have some

money sitting around you know an initial investment at 50k can sometimes do the

trick but when I've used the Ramsey calculator online it's telling me to

put in more than that and Ken I've also heard you say that the landscape for

college is probably going to significantly change by the time my kids

age in so I'm just a little bit stuck I don't want to over fund but I also want

to be a good steward and plan well for the future well let me address my part

really fast because mine is the fastest and Jade can walk you through

this I do say that and I do agree that the landscape is going to look very

different education higher education as we know it is going to be very very

different by the time your kiddos are there however the 529 has so much broad

usage of it as it relates to any kind of training I don't think training I don't

think education is disappearing I just think it's gonna look very different so

the 529 is still a very so I just wanted to clear that up in case you were

wondering what I think about that I think the 529 is a wonderful vehicle as

far as the amount goes you're off to a pretty good start as young as they are

Jade what do you what do you think on that I think the first place to start is

what your target is because then you can kind of work backwards and so if you're

you have to there has to be a set of assumptions in order to figure out that

target so if the sum of the if the assumption is okay I'm assuming all of

these three kids are going to go to some form of higher education what do we want

to spend for them like that's that's really what it is is what are we willing

to spend what makes sense for us it do we want each of them to have $90,000 do

we want each of them to have $120,000 and so if you and your husband can get

together and say what do we want and then just run those numbers start with

start with what the best and then run those numbers back and you go oh maybe

that's not possible okay then what would be our next ideal okay run those some

okay that could be possible so start with that in mind and use an investment

calculator in order to do that I mean I just threw some numbers in here I'm like

okay if you invested $300 per kid right for the next 18 years you know you're

gonna have around 180,000 right so start with that and then what you can look at

that that whole equation and go okay now do we want to be able to pay 100% or do

we want the kids to have some skin in the game and if so what do we think

about that so I think these are the questions that you ask because if you

don't have a clear target then you know what are you really shooting for and you

don't know if you've won or if it was successful or if you hit the goal or not

right yeah I agree with that and here's the deal this is a bit of a moving

target so you know you start looking at okay state schools so where you all live

I have no idea what the state of Washington has you know are there

breaks you know taxpayer-funded you know tuition breaks you know those kinds of

things you start looking at state schools you start you know but just to

give you an idea just to give you a number just to use Jade's formula here I

got a friend of mine lives here in the Nashville area his kid got a bunch of

scholarships great grades going to Auburn SEC school Jade going to Auburn

not far from here okay it's gonna be 45 a year it's a lot so you start adding

that up for a simple math let's just round it down to 40 yeah and now you're

looking at 160,000 so at that rate what you're already doing for the kids you're

gonna be there so you start looking at that you're going but but what's it gonna

be 18 years from now mm-hmm you can't it's you don't know we just don't know

and so try to be as practical as you can but I think just at the rate you're

doing right now I think you're gonna be in really good shape a big chunk of

change for each kid cuz you're just a bit under well are you say we're doing

300 a month for each kid that was just me 200 so but but Jade ran some numbers

at 300 and it's 180,000 per kid mm-hmm yeah so you're not far off of that no

and so you just it's a moving target but boy it goes a long way it does yeah I

think it does and I do think you know can you your kids are older than mine

but as they grow you start to see who they're shaping into and you can start

making a kid that goes to a trade school and by the way the 529 can be used for

that that's right you know you have a kid who goes I want to be an

entrepreneur I want this certificate there so again this money can be

liberally used and widely used so does that help you in the sense of what you're

I want to make sure we answered your question because there's no like

specific number we would tell you that it honestly is so helpful and it's

helpful to hear you guys say like yeah it's a bit of a gamble like you're just

doing your best with the information that you have and you keep checking in

and change your plan accordingly so and if you over fund it if you over fund it

I mean remember you get the money back from scholarships you can pull that back

out like if they end up getting full rides like you can pull that back out

of 529 that's right so it's not lost forever you know and if you get down to

it like we had a caller call in the other week Ken and they had massively

funded you know over funded the 529s it was like 80,000 left and it was like

listen at that point we just told him hey if you want to pull it out pull it

out and take the 10% hit like yeah no one's griping about it's griping you

have an extra money yeah so so I there really is no risk at all Beth no risk

okay okay thank you both so much you put my mind at ease good you guys are doing

great actually to get ahead of it that early yeah smart fantastic stuff and

that again back to the compound interest calculator love it you start putting in

that little that was what you ran I want everybody hear this yeah you ran $300 a

month times three kids so it was a $900 investment from the time they're Todd

babies yeah she only has one toddler yeah I think a three-year-old yeah she

had the four month old one and a half three and a half okay so two and you're

looking at 180,000 yeah kid that's great I go a long way yeah towards really

expensive schooling schools are insanely expensive yes although I do think

something will have to give and I really believe well I can't even begin to get a

crystal ball out for 18 years from now yeah on higher education but something

has to give the student loan to the trillions of dollars the American

people 46% of American parents say they wish their kids would go to trade

school if if colleges and universities were running for president they wouldn't

probably get elected you know I mean it's they're suffering a little bit yeah

and I think that only gets worse unless something happens with tuition

something's got to happen with tuition yes you don't mean time all we can do is

save up and do our best and you can only afford what you can afford and at the

end of the day that's the guiding light speaking of guiding light she is Jade

Warshaw my co-host happy birthday James Childs thank you my friend and thank you

America for listening this is the Ramsey show

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