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Chapter 1: What is discussed at the start of this section?
Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. Rachel Cruz, Ramsey personality, number one best-selling author, co-host of the Smart Money Happy Hour. My daughter is my co-host today.
Open phones at 888-825-5225. Phillip is in Los Angeles. Hi, Phillip. How are you? Hello, I'm okay. How are you? Better than I deserve. What's up?
Well, I'm having difficulty staying away from new debt, and I'm on baby step number two, and I'm having difficulty with budgeting.
Okay, Phillip.
Those would go together. That makes sense.
Yeah. Is it any type of business debt or all consumer debt in your household that you're trying to stay away from?
Consumer.
Okay. Any specific type that you find yourself in a lot?
Credit cards and medical.
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Chapter 2: How can I manage my debt while budgeting?
What do you all do for a living?
My wife is in clerical, and I work in a grocery store as a courtesy clerk.
Okay. It doesn't sound like you guys are peaking out on your careers. Correct.
I'm not. My wife is okay.
With hers, you mean?
Yes.
Okay. But $45,000 in Southern California.
For two people working 40 hours, you're not working 40 hours.
Yeah, I'm not working 40 hours a week. That's right. I'm a part-timer. Why? Just the way that the company does it.
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Chapter 3: What should I consider when combining finances in marriage?
That allows him to work more and earn more, which allows him to have more money to budget. And so the actual cause of some of the things you called about goes all the way back to you completing your healing journey. Does that is that logical to you? Yes. Yeah. And so in other words, the stronger version of Philip we have that's got the scars of the past healed enough to function. Yeah.
At full capacity. And then that version of Philip works 60 hours, two jobs, three jobs. And that that version of Philip brings home a lot more money than forty five thousand dollars in Los Angeles. Yeah. And that changes the whole budget transaction.
It does. But I also have Dr. John Deloney in my head, Philip, where he leans into, you have to have action as well. I'm all about you healing from what it is. But there's been a pattern, it sounds like, most of your adult life where you haven't gone beyond what you're doing now. And I think I would... It's a both ands, yes. Yeah, I agree. But you have to... Action in the healing step.
Yes, and the action of getting up at 6 a.m., going to a job, getting dressed, getting out the door, being somewhere with an accountability of being on time, working hard and exhausting yourself till 5 p.m., 6 p.m. for dinner and you leave and go home. There's a confidence and a rhythm.
That'll double your income.
That is good for you, Phillip, paired with... Being able to, you know, unpack what you need to unpack and understand yourself and not have high levels of anxiety, all of that. But I think it's a both ands. And so if I were you, I think it's part of your healing journey to go and be productive because I think that's going to give you some confidence.
And when you get paychecks in that are double what it is now and you can sustain you and your wife and you're not behind and you're not so stressed and bogged down and feeling like, oh, my gosh, I don't know how we're going to make the next paycheck. Right. Some of that confidence of, hey, look, we're literally bringing in tangible money, double what we were.
And that, not that money brings you confidence, but you know what I'm saying? It will give you a sense of pride and dignity that I think is really good for you, Phillip.
That's swagger to your wall.
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Chapter 4: How does emotional health impact financial decisions?
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So just like we told the last guy, 100% of people who win at anything do it with intentionality. They do it on purpose. No one accidentally... is married for 45 years. Sharon and I are getting ready to hit 44. It's not accidental. No one accidentally raises great kids. It's a lot of work and a lot of intentionality. No one accidentally stays in shape.
Donuts accidentally happen, not staying in shape. OK. And so, you know, you've got to do everything intentionally. And when you're doing intentionally with money, it means you're working some kind of a system, some kind of a plan to build wealth. Ours has been proven because we get you out of debt so that you don't have any payments.
And now you've got money to build wealth with and be generous with and have fun with. And. The best way to do that is with the budgeting app where you lay it all out. And our budgeting app, EveryDollar, leads you with personalized coaching and customized plans right through the Ramsey plan. So if you want to do this stuff, download this app for free. EveryDollar in the App Store or Google Play.
Jackson Tampa. Hi, Jack. How are you? I'm all right. How are you? Better than I deserve. What's up?
Um, so I've got a couple of questions. I am fresh out of school. I just graduated from the University of Tennessee last year. Go Vols. Well done. Go Vols. What's your degree in? I got a degree in supply chain management. Whoa, good for you. Killer. You landed the first big job? I did. Well, it's actually a construction job, so not exactly what I studied, but, um, What are you making?
I got a pretty solid job.
I'm making 80 grand a year. Straight out of school. That's sweet. Good for you. Yes, sir.
Thank you. So I guess the main question I have is my girlfriend is still in school and she does not have an income right now. She's in school to get her DPT, so Doctorate of Physical Therapy. Um, and then at which point she will be in debt at around 70, she'll be around 70 grand in debt after getting out of school. Um, I currently am saving for a ring. I don't have any debts at the moment.
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Chapter 5: What are the key steps to paying off debt effectively?
It's your fault. You did that. Okay? So you've got to stay out of the stupid. You've got to get the stupid student loan paid off like it's some kind of pet in your house. You've got to get that credit cards cut up and get Samuel L. Jackson out of your life. What's in your wallet? All of your money, apparently. But, yeah. So, you know, we've got to fix all of that.
Chapter 6: How can I navigate the challenges of combining finances in marriage?
And then the one last thing I wanted to bring up, and I want your input on this because you and I are about the same age, and I've been hammered negatively on this subject because – And I was on Fox yesterday talking about it, as a matter of fact. And the anchor, John, on there is about our age. And he said, what did you pay for your first house, Dave? And I went $67,500.
What did you pay for yours? $88,000. What did you do that on? $18,000 a year. Okay, well, wages have not kept up with house prices because house prices shot up in the last 10 years due to inventory shortage and COVID garbage, right?
Chapter 7: What should I consider before refinancing my house for investment?
And so wages have not kept up. That is real. However, the other thing we've never adjusted for in our psyche out there in the land of TikTok where you're 27 years old living in your mother's basement bitching about this is you've never adjusted your entitled viewpoint. Because let me tell you what was in that $67,000 house.
No stove, no refrigerator, had to go buy them used, no washer and dryer, no dishwasher, no microwave, no disposal, roll-out vinyl floor on the kitchen, and a Formica top, a chipped-up...
sink that had little chips in the ceramic yeah the carpet you had to mow it because it was seven inches tall it was remember shag in the 1970s shagadelic yeah shagadelic one bathroom and it had one and a half baths and it was 1200 square feet with one car garage yeah So you can't compare that house to your little McMansion that you're bitching about that you can't afford.
So you don't compare that. I grew up in a 1,000 square foot house with an unfinished basement. We had no living room furniture until I was 13.
Chapter 8: How can I balance saving for a ring while managing student loan debt?
And the living room wasn't as big as this desk. Yeah. And so, you know, you adjust all of that before you say, well, you're a boomer. You had it be good. It was easy for you. No, we didn't. I mean, I had one and a half cars. You guys got three. Sure. You know. And so you really got to adjust for that in your expectations. And then lastly, you need to think about where you're buying.
And in most markets, and you know this better than anybody probably, the basic urban growth is if you go out of town a ways, as we say in Tennessee, out in the country, it gets cheaper the further from downtown you move. Yep.
Yeah, and look, I mean, the average home used to be 1,210 square feet. And now the average home is 2,900 square feet. And so it's much bigger. And the difference in those is not necessity, it's luxury. It's, you know, this is what people were buying and the prices and the market and the way it went and all that kind of stuff. Here's the bottom line. You know, the first house I bought,
It looked like it had been in a drive-by shoot, okay? And I was a house painter's son, you know, and I fixed it up. And there's a thing called sweat equity. And everybody watches the Homes and Gardens show. The truth of the matter is, you know, I was out here in Tennessee the other day just looking at stuff, and I was looking at the model homes, and they have them all tricked out.
And they're lined up out the door, and everybody's buying the model homes. The money is not in the model home and the new construction. The money's in the old beater down the street without, you know, it looks like it needs a coat of paint. Because it does. Because it does. You make money in real estate when you solve somebody's problem.
That's how you buy, though, people. Yeah. You stay out of the traps, and you set yourself up, and you adjust your expectations and act like a first-time homebuyer. Quit acting like you've been saving money for 25 or 30 years. You haven't. You're 27 years old.
Look, how bad do you want it? And I hear a lot of the younger folks, you know, the math isn't mathing and I'm a lifestyle person. The average homeowner has 44 times the net worth of the average renter. And if you want to get on the right side of the net worth equation, the number one way people make money in America and all over the world is housing.
And so I've trained in 47 countries and housing is the same all over the world. Food, shelter, clothing, the three necessities. And so you got to fight and grind to do it. And again, I know, I think you're right, Rachel. Get your foot in the door. People are losing hope, but people are also listening to all this garbage out there.
100%, I totally agree.
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