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Chapter 1: How can I help my friends with money?
Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's the Ramsey Show where we help people build wealth, do work that they love, and create incredible relationships. I'm John Deloney, joined by Jade Warshaw, and we are taking your calls on money and life and relationships, whatever you got going on. We're here to help. 888-825-5225.
It's 888-825-5225. Jade, it's been a long time since we've been together on the show, man. How are you?
I know. I've been on vacation, John.
How's it been?
Great. Great. I had to remember what my job is here. I woke up. I was like, what do I do? Oh, yeah. It was good times? It was good times. We went to Fort Lauderdale Beach. Got a lot of time in the sun. You know what I'm talking about? Came home. It was the 4th of July. And might I add, can I say something controversial before we get to the phone lines?
Bring it on.
We didn't bring the kids.
Was it uncredible?
Yes. Do not bring your kids on vacation. It's not a vacation when you bring your kids. It's a trip.
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Chapter 2: What impact will student loan repayments have on budgets and retailers?
You're not? Don't take the kids.
Oh.
I like that.
That's right.
I did not take that. I took the kids. Let's go to Will in Denver. Hey, Will. What's up, brother? Nothing. How are you guys doing?
We're partying, man. What's up? How can we help? Um, so my wife and I are, we've never gone through financial peace university kind of inadvertently. We are going through the steps. Um, the only debt we have is our mortgage. Um, a lot of our peers and our family friends are having debt problems. Um, and I think it's causing some stress in some marriages and,
I don't think that locally in person, we really have any financial peace, um, university classes available. How does one. I would like to offer that to our community. How does one go about facilitating that?
Wow. Well, number one, I just love your heart behind this. I love that you're looking at your community. If you're rich but nobody around you is rich, what does it matter? You want everybody to be able to partake in what you've learned and what you know works. So I really, really love that. Yeah, I would just suggest going to ramseysolutions.com slash peace and signing up to be a coordinator.
And look, we are always looking for more coordinators because that work that you are going to do and that work that so many coordinators have done. I mean, that's what's changing lives, right? I mean, you got a hold of that information, even though you said you didn't like actually take the FPU class. It's the same information.
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Chapter 3: Will we ever be able to afford a house?
When my wife tells me she has a problem, she's not looking for me to solve it. She's looking for me to listen. And I feel like these folks were looking for us to listen.
Well, that'd be a great place. I love that, man. I think too many men, especially, run in and try to start solving things with their advice. But there's something else about an invitation.
Yes, if I can make it available to them and invite them.
That's right. You can invite them, and you're not shoving it down their throat, but it's, hey, here's an opportunity. We're going to be there. Love for you to join us. Stay on the line.
I'm going to send you a gift card for a free year of Financial Peace University that you can give to that family and tell them it's a gift from you to them and invite them to the class, and they can come participate and be a part of it. Thank you so much for your heart, brother. 888-825-5225. We're talking relationships, mental health, money, work, whatever you got, we're here for you.
We'll be right back. We are back. This is The Ramsey Show. I'm John Deloney, joined by Jade Warshaw. We're taking your calls, 888-825-5225. It's 888-825-5225. So, Jade, student loan repayments are all the talk of the town. I want to say this first. We were talking about this a little bit earlier. I was surprised at the number of people that... I don't know how to say it in a nice way.
They came after me and said, well, I hope you're happy. I said, what do you mean you hope I'm happy? And it was this very strong, well, we know what y'all stand for and you got what you wanted. And Ramsey's so excited. So I guess just between me and you and the people listening, I'm a fan of... People who were taking advantage of having their loans forgiven. I don't have a problem with that.
I can't stomach it while they're also making loans the next semester. And so if you're going to fix the whole system, I'm all in. I was a part of that system.
I get it.
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Chapter 4: What should I do if I feel hopeless about following the Baby Steps?
Forget getting to the actual forgiveness. OK, but the pandemic era pause is coming to an end this fall. We know that setting up a financial shock for millions of Americans in the big name stores where they shop. So here's an interesting twist here. So we're seeing that. As these student loans come back, John, everybody's looking at their budget going, like, I got to find this money somewhere.
Because again, what we know is for the past three years, you know, people had this pause and they had this extra money in their account. And we know that they've replaced that the student loan. Debt with other types of debt, whether it's car loans, home mortgages, just living life, you know what I'm saying?
And so now coming, you know, payments which are going to resume August 30th, those payments are substantial for a lot of people. And now we're finding that retail stores are going to kind of take the hit because these folks ain't paying the money. It says the average monthly bill hovers between $200 and $300 per person. Although it's even higher for some borrowers.
Collectively, borrowers will resume paying about $10 billion a month. And the resumption of these payments will likely force households to cut back on spending in other areas, particularly retail.
And I think that's right.
yeah i do too if you're a retailer and people have been buying your goods and services on credit the last three years there's a reckoning coming um and again what i hope everyone listening to this so i i do have a heart i'm a retailer i have stuff i want to sell sure i've got a book coming out in october and i just keep looking at this going oh are you kidding me right but um
I'm hoping that the consumer is the one looking at this and saying, I've got a three-month ramp here where I can begin to make some hard choices, have hard conversations with my spouse, with my kids, start getting an extra job, sell this car because there's going to be a bunch of cars on the market in September and October, November. That's right. There's going to be homes on the market. So I...
we we rarely get 90 days or 120 day head start in life that's right and you've got that right now you know what's coming if you wait until october just to go oh my god then that's on you i think you've waited right there's so much time here um and i you know this is kind of a funny article you know it says a number of brands people like um american eagle carter's crocs I think that's funny.
Nike gap. These folks are going to be the ones feeling the hit Victoria's Secret. And if they feel a hit, I think they'll be all right. I would rather people pull back on their spending, find that margin so that they can make their payments, because let's not forget. And, you know, guys, I'm always going to give you the facts so you can keep it in front of you.
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Chapter 5: How can I facilitate Financial Peace University in my community?
Is it cutting ties great? No, it's the worst. But sometimes we have to do what we got to do.
That's right. And you want to know what, John? I'm going to say something because you started out the conversation this way. And I was talking to James, our producer, and he was like, you know, sometimes people think that you're excited that they didn't get forgiveness or that you're excited that people won't get forgiveness. And I'm like, no, that's not it at all.
I just want people I get upset when I see people stripped of their power or when they when they step out of their power or when they give their power to someone else. That bothers me. And I get way more excited when there's an opportunity for people to gain their power back. and for them to realize what they're capable of. And so if that ever came off that way, that's not what I want.
I want you guys to know that I want you to win. I get what it feels like to be under student loans. Look, when we had private loans, some of that interest was forgiven and it was the best thing that ever happened. I was like, oh God, thank you for giving us back this 30,000 in interest. So I get it. Private loans work a little differently than federal loans though. And it
that's just at the end of the day i'm thinking about tax dollars i'm thinking about how this money is spread around i did not like the language free money forgiveness because it's not free like free cost everybody it cost everybody everything so that's that's where that comes across for me well and both you and i have been through it right yeah our houses you've paid off way more than us but we paid off
We had commas, right? Yeah, come on. Come on with the commas. So again, we're two people that can speak from it. We've been there. We know.
We get it.
Where you can't breathe and you got to live a certain way and all of our friends are driving these things and living this way and we're not. We've been there. Yeah. Both of our families have been there. Put off having, I don't know about y'all, we took us a long time to have kids. All these things happen because of these student loans.
Yeah.
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Chapter 6: What should I consider when planning for unexpected expenses?
How much is the car loan, Arsalan? The car loan is about, I think, $45,000 for a 74-month term. Okay, hold on.
Arsalan, you can't start a call saying, I don't owe anybody any money. That's like saying, I only eat super healthy food except for Twinkies and Burger King and McDonald's and Taco Bell.
Yeah, I'm contradicting myself over there. How much do you make, bro? Yeah, you're right. Well, I make $105 a year with 15% annual bonus, and my wife makes about $55 with another 10% bonus for her.
So in Queens, it's a little bit above minimum wage, basically?
Yeah, in Queens, based out of Queens, it's a little bit above minimum wage. Oh, man. Yeah. Well, here's the thing, right? So we're currently renting right now, and we're paying about $2,000 for a one-bedroom apartment. And we don't mind moving out to the suburbs, but in Long Island, the houses are at like $600.
We currently have about $25,000 saved up and we just want to know what we should do moving forward. Like, should we just rent, rent, rent, save up more? Or should we just take that money and just buy yourself a house now? I even thought about buying myself a condo, but then the HOA fees here in Queens are like $1,000 a month, and I don't want to throw money away like that.
So what do you recommend that I do?
Okay, this is really good. I'm glad that you're thinking about this. I'm glad that you... Hey, I'm glad you got some money saved. That's great. You do have the $45,000 in loans. So can I just walk you through the principles here that we would follow, and then you can decide if you like it or not, basically. Sure, go for it. Okay, so... Buying a home is super important, right?
Everybody wants a home. That's the American dream. We know it's a big part of building wealth. But on this show, we see time after time when people don't do it the right way, something that was supposed to end up a blessing turns into a burden. It turns into a headache. It turns into them having to sell a house that they really love to keep.
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Chapter 7: How do I navigate the challenges of home ownership?
Because a lot of times we just talk about the down payment. And I'm like, no, there's more to it than that. When you go to buy a house- I always tell people, keep this acronym in your mind. You want a stacked deck, D-E-C. You need to be ready for a down payment, which could be, I don't know, about 5% to 10% for sure.
I'd say 10% to 20%, yeah.
I mean, that'd be nice, but I'm not mad if he gets it between...
Yeah, 20% for a $600,000 house, that's $120,000.
That's a lot of money. We want you to have a lot because we want you to have instant equity. And usually you need to get somewhere between at least above 5% because you don't want to be, you know, try to get it 10 to 20. Then you might have to do some earnest money, right? Sometimes they ask you to put like 1% to 3% down to say like, yes, I'm actually going to buy this house.
And then you've got your closing costs.
And let me put on top of that, okay? Arsalan, I'm all about it too. I bought, my wife and I bought a house. It's incredible. We love it. We had it inspected. And then we had a couple of different aspects of it inspected by another professional. In the three years we've owned it, I've had to replace the roof. an air conditioner. We had to replace some water system.
And then this past weekend, we had the electric guys out because something kept tripping down in the basement. And the guys told my wife, and I quote, you're going to want to sit down before I tell you what actually is going on. The cost is staggering. The cost of maintenance, right? It's just life happens, man. Life happens.
We want you to be ready.
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Chapter 8: What are effective strategies for managing debt and budgeting?
And then there goes my emergency fund. And then there goes the credit card. So I wanted to see if y'all would y'all suggest putting more in an emergency fund like 2000 instead of 1500. Yeah. What do you think? I wouldn't. I am curious what sorts of things are coming. I have several questions. So with the emergency fund, you're getting the $1,000 saved super fast, right? Like 30 days max, right?
It's not taking you forever and a day to get it saved, right? No, it's not. Okay. So when these emergencies that are popping up, what types of things are popping up? So a lot of times it can be medical bills or a car issue. Like I had I had a tire blow out and then I had and then I realized it was time to get all new tires. So, you know, I do have a car loan.
It's it's a low interest rate and low. I thought you said you only had credit card debt. I did. Sorry. Let me back up. Car loan as well. How much is that? It's in total, I think it's $18,000. Okay. So it's just the credit cards, the car payment, anything else, student loans, anything like that? No. Okay.
Let me hop in here real quick and then Jay's going to take it. I just have to say this. You had a tire explode and then you realized that it was time to get new tires. If you live with the new way of thinking that we're trying to teach you, you can't afford new tires. Do you need them? Absolutely.
Do you need me to rotate it again and see if they'll go through another few months until you can get crap paid off? Yes. And next month, can you put it in the budget so you can just cash flow it because you make $130,000? Yes. Yes.
And one tire at a time.
But see what I'm saying? If you have this idea that I can't afford it so I can't have it, that's the total soul change we're talking about here. Otherwise, you're going to keep finding these little ticky-tack emergencies and you're never going to get through with it. Sorry, Jade.
No, John, you make an excellent point because what I was going to say to you, Margaret, is with the emergency fund, it forces us to rethink what an emergency really is. Now, your tire blows out on the interstate. That's an emergency. But do you have to buy all four tires at once? No, you don't. Can you buy the one that you need and can you get a cheapo to get you through? Yes, you can.
Some of the other things that pop up, you've got to decide, OK, is there a way that I can cash flow this? Because we don't the goal is not to dip into the thousand dollars all the time. You want to try to find a way that you can cash flow it, that you can come up with some extra money, that you can cut something out of your budget in order to make those things happen. And my guess is that.
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