I'm Not Comfortable With The Baby Steps!
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- Опубликовано: 8 сен 2024
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She's going to do her own thing. Her husband is on long-term disability and she's talking about going into more debt to buy a bigger home. That's a woman who has not had that very real, grown-up discussion with herself about what it takes to be financially responsible. If she persists in the attitude she conveyed on this call, she and her family are going to struggle.
She’s absolutely correct $1000 isn’t enough for a family of five in an emergency fund even a starter emergency fund. It’s one part of the Ramsey plan that hasn’t been updated in decades probably should take a look at that.
Yes. Maybe it should be a percentage of your fully-funded emergency fund? So if a full one is 3-6 months, just divide by five for your starter. So if someone wants 20k for their emergency fund, 4K is a good starter amount, which is exactly what she has.
No. It's to induce a person to be gazelle intense. Not to putz around and be OK with having debt.
They often say it's not. It's there for a quick win. No point saving lots when debt IS literally an emergency.
The caller just needs to switch from taking advice from the Ramsey Show to the Money Guy Show
@@fauxbro1983 taking yourself and your family out of financial security to push yourself to pay off debt is very backwards. To each their own but at the end of the day Ramsey Solutions is NOT a fiduciary and thus does not have the other person's best interest in mind. Just selling their books, courses, referrals, etc.
I didn't go down to 1k in savings either. I figured out what amount I was comfortable going down to, calculated how much longer it was going to take me to pay off debts by maintaining that savings level, and calculated how much more interest it as going to cost me. Then I made an informed decision to keep the higher savings level, stay in debt a couple more months, and pay a few hundred bucks more in interest, in exchange for maintaining the bigger safety net. 100% would do it that way again.
I am not in debt but if I were I would not be comfortable with only $1000.The magic number has always been 1000 but $1000 today is not the same as $1000 20 years ago.
That makes sense on an emotional level, but you're effectively taking a loan out for a future event that hasn't occurred if you're in debt and keep cash on hand instead of paying down your debt
You will never convice the Ramsey's of this. The $1000 in savings is not meant to be comfortable or as a rainy day fund. It's meant to feel like not enough and to get you motivated to get the the debt paid off so you can build your rainy day fund.
Exactly 💯
Trying to solve future money problems with prehistoric money rules.
It's asinine.
Blaming inflation is not a reason to save past the $1000.
Maybe it’s just me, but if I had 10k in debt and 10k saved, I would feel and act like I didn’t have a penny to my name. Because In reality, you don’t.
I love that these ladies are taking turns and not interrupting one another. Both have so much to contribute and we enjoy hearing both point of views. Hey Rachel and Jade.👋🏼. You ladies look refreshed and beautiful.
Rachel and Jade are lovely. Hi Ladies!!!
Dave- take a lesson, HaHa...
Are you serious???? They offer nothing
“Refreshed and beautiful” 😅
I definitely agree, it just flows ❤
Have to say, Jade sounds like a salesperson on this call.
She's a satisfied customer for paying off debt!
That is the same thing I thought as well
Caller & hubby seriously need to "back burner" having more kids until they get things turned around. INSANE to have more kids until you can afford them! IT'S NOT JUST THE SIZE OF THE HOUSE! Kids are "Black Holes" of expenses!
The $1000 should probably be updated to, "$1000 for every member of the household that you are responsible for." I think that's a little more reasonable if you think about it. Or something along that line.
No it shouldn’t.
Sounds right. Everything else gets adjusted for inflation.
Absolutely not. You clearly don't understand the Baby Steps.
@@evr0.904 Umm I do. But I nearly just voiced my opinion. I'm sorry if you were offended.
@@justvincenturb Yeah. I'm so offended. Argh! You clearly don't understand the Baby Steps. Good luck though.
It's more of an emergency to have only a 1k than a car loan lol the caller is absolutely right
Agree. With Dave I follow the spirit of but not the letter of the law. I replied to another commenter and I’m sure I’ll get downvoted but I think a $1k emergency fund is irresponsible, especially for a family. I’d only do it knowing I could always go back in debt if a real emergency happened. Not that I’d want to but $1k to cover an emergency is a fantasy.
And that's why you're where you are and Dave's where he is.
@@evr0.904where is Dave?
@@reese85 You can't be serious 😂
@@evr0.904 it’s a joke cuz he’s been missing on the show, smh! Maybe you should take your 1k emergency fund and put it on a down payment for a sense of humor
having kids if you're not in a financial situation to be able to support them is a terrible idea.
Kids are cheap. People make them expensive trying to make them better then the Jones. Then they turn around and resent you.
@@HonorOneAbove in a way
@@HonorOneAbove sure, but not having kids is literally $0. You can't beat that from a monetary perspective
Okay, so expanding a family born into debt. How about gas to put out a fire? 🤦
Don't remember asking...
I think adding another baby while your husband is on half pay is a massively bad idea. Hospital bills, diapers, and all the other requirements of newborn babies add up to a lot of money, more than people think. And that's with a healthy mom and baby. It can get much worse if there are complications, God forbid.
The caller is absolutely right on this one
These cases are weird because suddenly, in the Ramsey formula, numbers don't matter.
No they aren’t.
@@brianmcg321, I agree they aren’t right. For a family, you better keep more than $1000 in that emergency fund.
@sstrongman1667 the caller isn't doing the plan. Steps 1 - 3 work because of the whole "gazelle intensity" thing that Dave says every other sentence. The caller can't do that, husband can't even go to work, let alone work a bunch of overtime or side jobs. Tradeoff is they are going to be stuck with that car loan compounding against them longer and that savings account staying too small to be relevant for a down payment.
The husband can watch the kids while he receives 50% income and the wife can work to use the additional income to pay off all the debt.
Thank you! She could've been working for months. She's going to send her husband to an early grave
If you’re not in a place to finically support a baby you shouldn’t have one. Probably an unpopular opinion.
The truth is especially unpopular in 2023
Truly. Kids are not a need or a right.
Also, babies need a lot less than what we've come to think of as necessary to support them.
I agree with your comment and Ramsey’s advice. Like Dr. John says “it’s not either or, it’s both and” I think it’s a matter of saying it’s time to act like an adult and get your house in order so you can be a good parent. Dave Ramsey often says children are great so I think if you’re here in the great USA and you’re married you have the tools to grow your family if you’re willing to sacrifice your own immediate happiness for the good of your children you find a way to afford to be a parent if you want to be
Facts!
Nobody on this call is living in reality. Why do you want a bigger home if your only income provider is on a temporary disability. Encouraging her to reduce her emergency fun in this situation is bad. I wouldn’t discourage someone increasing their family but some planing is in order .
I was uncomfortable with the baby steps too. So I saved the 3-6 months emergency fund first. I would be debt free now, but I had been layed off right before I found Dave Ramsey and ran through my saving in 2 1/2 months. It's hard to give up the little you do have even after 1000 emergency fund when you have job insecurity.
Yeah that's what I'm doing. $1k isn't nearly enough anymore because of inflation and other costs of living. It's simply not feasible.
Keep the 4k Courtney! You don't have much debt so throwing 3k in addition is not doing much. You can pay off your car easily as well. They won't pay your medical expenses or emergencies for you :)
Yes totally agree
Completely agree
The moderators are very strict about an emergency fund until expending the family and having a baby is added to the equation. Yes, personal decision but the taxpayers are left to clean up a mess if the 'personal decision'' doesn't work out as dreamed.
Yes, and not all pregnancies go well and not all kids are born healthy and whole.
A $1000 is not enough. Save the amount that makes you feel comfortable.
No.
@dp4k, you have not listened to the show long enough. There IS a reason it is 1K.
@@alinatamashevich3354 I've listened and went through the baby steps. $1000 isn't enough!
@@dp4kallday Again, you missed the major point of it. It is to START with. not keep. It is enough when it is ALL one has.
@@alinatamashevich3354 I'm aware of that! I'm still sticking to my opinion that it's not enough!
Husband makes $70k in Colorado, add more debt, shrink savings and thats a hold plan? Thats absolutely insane and is putting this family in great risk. Just hold off, pay the debt, tell the husband to get more income and then try it
Her doing a part time side gig (even from home) wouldn't hurt either.
Husband has bad health already
If anything, wife go work, husband stay home or work part-time
Money is 100% a valid reason to not grow your family. If you cant afford kids, do not have them.
I got a 30yr mortgage. Gave extra payment as I could. Paid it off in 19yrs
Dave needs to UPDATE the starter emergency fund seriously! It's been the same for years, let's be real people - $1000 is nothing.
💯
No he doesn’t. Currently less than 40% of Americans have $1000 saved for an emergency. It’s still a big hurdle for most people. If you adjust for inflation it’s only $1,700. Not a big difference.
How many people don't understand the Baby Steps... No. It does not need to be changed.
Apparently it is since most people DON'T have it, and that is the point.
@@jeffersonia BuT wHaT aBoUt If ScEnArIo X hApPeNs? $1000 wOn'T cOvEr ThAt!
I would never advice someone to have more kids while they’re struggling. A child is a major liability. I would always recommend they fix finances first then they can have as many kids as they want.
So, the husband has health issues, but they want a bigger house and other baby? 🤦♀️ and then they will call complaining about their financial situation, losing the house, having no savings bla bla bla
This is not about an emergency fund it’s about her justifying taking on about 700 a month more buying a new house even if he is working full time again there heading for house poor don’t do it people 🛑✋
The caller is right here... 1000 might be ok if you're a single person still on mom and dad's health insurance, but it's NOTHING if you have others depending on you. Dave will never change his mind about it though.
Tell us more about how yer stuck in your drama like the caller is! Bah ha ha ha
@Don Johnson no drama here my guy! Just disagree with Dave and the gang on this one. It's not like The Baby Steps are Canon.
@@donjohnson1416, get laid off or have a car accident or almost anything with $1000 in the bank. You talk about stress and drama.
In the year 2100, when $1000 is the price of a Big Mac, the Ramsey show will still be telling people to save $1000 (and no more) until they get out of debt. $1000 is the magic number which solves every situation and never changes with time, inflation, or family size.
Correct me if I am wrong.. as I haven't actually followed the "steps" but 1K is only a starting point to be built upon after the consumer debt is dissolved... I am debt free, (have been for over a decade) and continued to grow my EF to 12K. Another 7K into investments and continue to add monthly.
70K income isn't much to upgrade to larger home in a lot of locations. Maybe she needs to get some income.
Uh-uh, wife never works in Dave-land
The 1000 IS TEMPORARY people! It’s about the whole program/process. Don’t get hung up on the one step
Okay her husband is on disability and she wants more kids and a bigger house??? And she doesn’t work lol keep dreaming
She ain’t wanna hear none of what they was talkin bout. She was like “soooo what about mortgage”😂
That part is irritating. If she wants a bigger house and another kid, she needs to put on her big girl pants and get a job to cover that increase in expenses. She already should be trying to get a work-from-home job with the 50% drop in his income. Marriage is a partnership, including bringing in income.
Was dumb advice anyways
People have to stop taking the baby steps so seriously. The baby steps are just a guide to keep you financially disciplined and to get you in the habit of saving money and working toward your goals. it’s okay if you have more than 1K stashed away for emergency funds.
im a huge fan of the baby steps and everything Dave Ramsey, but seriously with how expensive gas, eggs, bread and pretty much everything, $1000 its not even half of a started emergency fund these days.
People feel uncomfortable with the 1k E fund.
That’s the point. You should feel uncomfortable if you’re broke.
Cutting through the fog...
Total household debt $13K (car) plus $146K (home) total $160K. Income issues but even of a good day $70K/year.
The question: can we buy a bigger home? The answer: no
Pretty bad advice right here lol. 1000 for an emergency fund doesn't cut it. Also no don't have another baby if you can't afford.
It’s a starter fund.
Babies don't need much space. My daughter had half a bedroom sharing with my office space in a 2 bedroom apartment. We lived simply, knocked out our debts, saved and upgraded a year later.
Money should DEFINITELY be a thing that slows you down from growing your family. Who is going to pay for your kids? Dave and his family tells everybody has kids and then whines about the taxes he pays that pay for it. Can’t have it both ways.
Yeah, that was horrible advice on their part. The lack of money should prevent a lot of things but heaven forbid you don't have the third child, that new car, that vacation you "deserve".
They also want you to pay for your own kids and not live off the government. Where in their plan do they encourage people to go on food stamps? They encourage people to free up their income so they can support their families.
The thing about having a smaller emergency fund is that it limits your spending at a time when you are the most vulnerable or under stress which is also when you would are the most likely to choose costly solutions like staying in a hotel for a week in case of emergency as she mentions. You would find another way cause you have to. And then you also have your monthly income. It isn't just a practical thing, it is about adopting the right mindset, being all-in to reducing debt. Which she is not because she is thinking about adding to it for a bigger house with small children... It's a deeper issue actually.
Yes this is the perfect answer. Safe has always said $1K isn’t enough. But it’s enough for you to get your finances in order so that you can get to that place if security. She has$4K saved up that’s doing nothing for her and her kids. Still has car debt and a mortgage and wanted to have more kids she can’t afford and more house!
If you don’t wanna do the baby steps, lady, then why did you call in?😂
Sounded more like she's in storm mode at the moment. I'm just one of the internet people, but until the husband gets back to work, stockpile that cash. But once the first steady paycheck comes in, it's game on.
If you look at their facial expressions and body language you can tell that they both secretly agree with her on the 1k not being enough.
Before changing something like, I think they'd have meetings behind closed doors. And talk about it from every possible angle. And I think why they haven't yet changed it? Raising your starter efund, makes it too comfortable and might take you longer to get started removing debts from the list.
And as Dave says, doing finances is 20% head knowledge and 80% behavior. (I think?)
@@sackettfamily4685 That's totally ignoring outside forces that can disrupt your debt elimination plan, like job loss/hours cut back, accident/illness, death/disability of income earner, etc.
@@jeromehenry4484 they already have an answer for that, and it's to pause the debt snowball. And then you pile up cash until you get the situation stable again. Or if having a baby, until it's born and everyone is ok.
For Rachel the "emergency fund" probably means at least 20 times that, lol, to be anywhere near comfortable
The smoke might not clear on the husband's medical issue. You don't even know what it is!
My personal opinion on the $1000 emergency fund is to get a person to behaviorly tackle debt with an intensity. $1000 isn't that much it just kicks you into gear
are we allowed to tell ourselves that maybe having another baby is not the most responsible thing right now?
Why on God's green earth are so many people (mostly women) in such a rush to start a family and have children especially when they're broke, then complain about it?
It's beyond me why people put themselves and their children into such a stressful situation...
Money is the most replaceable commodity on this planet. You have a very limited amount of time. Some people have goals that take more time than money.
Gives them a purpose in life.
Because you can only have children (safely and healthily) during a relatively short period of time. You're trying to complain that biology is doing what it's supposed to do? Weird take.
They already have two. Wait until the husband's job is stable then have more. Plus let the children get older then maybe she can get a part-time job and help with the income in the household.
So she can justify sitting at home and not working.
The first thing Dave would have asked is the nature of medical issue in order to give advice on what to do. I'm sorry, these stand in hosts are just way too inexperienced in life to do any justice for callers.
If they go to $1K they’re going straight into debt at the first emergency
I think a feasible modification to the emergency fund could be the following:
Single/married and no kids = $1K
Single/married and w/kids = $1K and 500 extra per kid.
Single income with kids and the working spouse has health issues, idk why they felt the need to fight her over having a larger than normal emergency fund during the debt pay down stage.
The only problem here is that they’re already in a house worth 4.5x their annual income. Upgrading anymore would put an outsized portion of their net worth into a house.
The fact that they have a single income, debt, and a spouse with health issues is reason enough to eliminate debt to ensure their emergency fund goes as far as possible. Being out of work with payments carries more risk than being out of work with none.
Sometimes I find it frustrating how they just repeat the same approach without any flexibility. One way approach can't and wouldn't work for everyone, the main thing is the principle which is abiding debt, and if already in debt being diligent to pay it off and live below your means.
Yes!
Somebody said it, hall-o-lujah!
People think they need more space when reality they just need less stuff
her husband does not make enough money to afford a bigger house, more kids, and take care of her...and they have other debt shes delusional
Your mortgage loan should never be more than 2x your annual household income. If husband makes $70k, you should not borrow more than $140k.
This lady is not serious about getting out of debt. When people call in, you can feel it in their voice. I HAVE HAD IT. I am not hearing this intensity. Like a gazelle wondering mindlessly in the tundra waiting for the cheetah to show up.
Sorry, not sorry but Jade said a whole lot of nothing! 4k in savings with 1/2 an income and telling her to go ahead and pay 3k towards debt and leaving them with 1k in savings is irresponsible. No other to explain that. I think the wife needs to get a job outside or remote(from home) and help supplement the loss of income they’re experiencing. An extra few thousand minus child care would really help them
Incorrect. The plan is the plan is the plan is the plan. Dave would have told her to do the same thing and screamed at the caller for daring to question the plan.
If she doesn't feel comfortable with only 1k, then so what.
It's call personal finance for a reason.
SO what if most people don't have 1k. That have nothing to do with her
THANK YOU for saying that! Stop looking at the crowd, focus on your own situation.
Here is my beef 🥩! Stay at home moms should be on the phone with the husband because he makes the money 💰
1,000 in 2023 is more like 100 bucks.
More like 400 in the 1990s
Why would you grow your family and then try to become financially stable. Shouldn’t it be the other way around?
She is correct! $1000 is nothing. We are doing it backwards. Saved 3 months of expenses, then paying off debt.
Im totally going to agree with the caller here. i get Ramsey is trying to put pressure on you so you pay off your debt. But the issue i have is there one size fits all plan. Its trash. Its a good starting point, but you need to be considerate to the needs of your caller. If they actually give good reasons other than "i don't think its enough," You should reply with "you're right. what do you think is enough?" And go from there. Talk them down a little, sure. But the caller has already discussed health issues & job situations. They are on shaky ground. You don't blow away your savings when you don't have a solid foundation. That's how you go back into debt. If i were them i would ignore the 1k thing until employment & health are stabilized. Then, dump the money on debt. Its only going to affect things for a couple of months and you'll have the peace of mind.
For the record i completely understand why Ramsey picks 1k. Its not just that most Americans don't have it handy. Its making you feel uncomfortable so you act. Hes attempting to teach good behavior. Also of your bills are 5k a month you need 30k for an emergency fund. Which would take a long time and you should be paying your bills instead. So its a compromise. Get your bills paid amd maybe that 5k turns to 2.5k. Thats a whole lot less needed for an emergency fund.
But i completely reject you cannot be disciplined with out his plan. If you can not be disciplined your never going to act no matter the plan.
70k single income for a family of five already and she wants to add another child. This isn't a baby step problem this is a bad planning problem.
Let’s just be honest here.
The 25% of your take home pay on a 15 year mortgage is just ridiculous.
She should wait on the baby till she has completed the baby steps
Family is the excuse. She just feels entitled to a bigger house to show off to her more attractive friends.
Holy cow. 300k for a 2 bed/1 bath house. Crazy expensive area, especially for only 70k household income
The $1000 is a starter emergency fund. It’s fine to get a larger fund in place but recognize that it will slow you down. A slow down means you may lose momentum. The baby steps work, period.
They do work as they are. The people who have debt to pay off NEED that momentum or they will give up.
How are they going to crush a car loan and a new mortgage if her husband can't work and there's no additional income ? 🙃
The caller said that had happened to her husband, but that he was getting back to normal now. The idea being that his income would return to pre-injury levels going forward.
Isn't the 1k just supposed to get you over road blocks? I always figured it was supposed to be small because it lit a fire under you to get out of debt and get your 6- 12 month saved. 1k won't replace an income, and it isn't supposed to.
A 15 year mortgage on the price of houses these days would likely be a pretty pricey monthly payment. I'd think taking out a 30 year would be better...you can always pay extra on your mortgage, but if you lose your job or have an emergency, you can just pay the minimum again.
Worry about more space after you get your debt paid off. We had two kids in a small house, and we survived. We also both worked. Quit whining and get it done!!
I agree with the caller. 1000 is way too low as emergency money they didn’t really seem to get that. She should keep that 4000 as emergency and throw the rest of the income at the car and pay that off if they were to have an emergency that cost more than 1000, that could potentially put them in debt. I never understood the thousand dollar emergency fund they propose.
Yes she should
You don’t understand the avg person has zero emergency fund? The $1k is simply a starting point. The steps lead to 3-6 mo of expenses in an emergency fund.
If you start with $100k in debt with a goal of no debt and 3-6 mo of expenses is it more intelligent to pay interest and save for 2-3 years or save a little and pay down the debt? Ramsey teaches $1000 because it’s a starter emergency fund. Not intended to be all encompassing.
Just because other ppl don’t have $400 for an emergency, doesn’t mean you that you have to keep only $1k. She keeps saying trust the plan. Please don’t! Do not trust the plan - no one else is coming to pay for the emergency if it’s more than &1k
As soon as Dave retires and is outside of the business with minimal influence, I'm sure that's when the next leadership team will raise the $1k to at least $2k. You get the sense that everyone except Dave knows that step is no longer valid.
Didn't go down to "1k", I am listening from South Africa , so I had to use my interpretation .
My formula is 1 month a head on living expenses , and enough to cover an emergency.
It has become evident that Americans have a real fascination with cars and obviously are okay with going into tens of thousands of dollars in debt for a car. Is it me, or are cars really expensive in USA? As a kiwi, I find the amount spent on a car so exorbitant, it’s borderline gross
$1000 is not enough emergency fund
In this case I side with the caller on wanting to keep the 4k. Long ago I was a SAHM and there is a fear about losing/reducing that one income. The small house is hard but not the end of the world.
Some of y'all complaining about the 1,000 probably don't even have $1,000+ in your savings account.
Why do people want kids they can’t afford!
Shoot, I have no mortgage or car pymt. But I have way more than $1000 inan emergency fund
She got baby rabbies and of course she needs a bigger house. Of course she doesn't work. Ramsey should immediately say "Do you wanna work on the weekends" to the stay at home moms silence.. Husband gets hurt and of course she doesn't roll up her sleeves and pitch in.
Jade is so freaking beautiful and I love the way she has her hair in this video.
Nice that you were willing to backtrack at the end.
Perfect advice. Nice to have, not need to have.
This was a call that Dave needed to take. The ladies were way to nice to her. The lady is gonna force getting a bigger house when it's not the right time financially to do it.
I like the new host
Me too
Rly...
Based on other calls I think Dave would actually agree with her. Maybe drop it down to 2K, but it's irresponsible to risk your kids going homeless and hungry.
Dont listen to Ramsey. Keep more then 1k in the bank
Sounds like rather than a bigger house these people need to have a garage sale or make a drop off at the local thrift store. In my experience "need more room" really means "we have too much stuff and no where left to put it".
I don’t get why people want more and more kids. Literally why. Your house isn’t big enough. You’re in debt. Your savings is small. Your husband isn’t working. Yet you want to expand your family. Look at the bigger picture, people.
Thank you for sharing your experience.
How about the $1000 emergency in 2050, What kind of emergency will that cover?
Nothing wrong with doing a slightly bigger emergency fund before working Baby Step 2.
How about "letting" wife work, am I very far-off with this option in their situation?
Probably don't want to increase family if husband is on STD.
lady is keeping the $4k, selling the house, using the equity to pay the car and buying a $500k house
Would be interesting to know what their current interest rate is on their mortgage; probably bought their home while mortgage rates were at historical lows. Could they even afford to buy their CURRENT HOUSE with the appreciation & interest rate increase? Probably not. Wife needs a reality check; she should appreciate all her husband has been doing for their family instead of planning to increase his financial burdens.
$1000 doesn't get you far especially the way things are going now especially more with a family. 4-5K is the ideal emergency fund for families
A million should get you far enough
You meant 1k, 1000k is a million.
I totally disagree with her advice. 1000 is Not enough
At that stage you're not supposed to have enough of an emergency fund.