Do You Know Where Your Money is Going?

welcome to the dave ramsey show you can be intentional about your character you can have money and a career you are the hero in your story live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the dave ramsey show where debt is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice i'm dave ramsey your host rachel cruz ramsey personality and best-selling author is my co-host today we'll be answering your questions open phones at triple eight eight two five five two two five that's triple eight eight two five five two two five chris is in baltimore hey chris welcome to the dave ramsey show hi dave um this is amazing for me i actually grew up listening to your show my parents turned their life around with your advice so i'm really appreciative well i'm honored how can we help today sir um so i'm 22 i graduate college on sunday yay what's your degree in that's in economics congratulations thank you um i am lucky enough to have no debt from school and i have a job locked down i also have three months expenses saved um and my fiance is in school to be a physician's assistant currently and because of her program she'll incur some significant debt so i'm trying to weigh um saving for retirement while i start my job versus saving to be ready to hit that debt hard once we get married chris when do you guys get married um it's not going to be until she graduates so it's over a year away okay well for you i mean i would i would definitely be focusing on your retirement right now because praying everything i'm sure you sound very responsible very in love so i'm sure this wedding is going to happen but what i would do is still um take advantage of the 401k at the company if you have that or a roth ira and then on the side if you want to save some money just in general and what you can earmark that for for a year from now when you guys get married that you can throw at her debt for sure because it'll be your debt together at that point or you could even use it as a down payment on a home um later in life too whatever you want to do but just earmarking it on the side but not i would still fund retirement how much student loan does she have that is she going to have um it's likely going to be at or around 100 000 ooh that might change the answer okay and you you make what i'll be making 65 000 a year okay and then she'll be making probably about that when she comes out roughly two so you have 130 000 income with 100 000 in student loan debt yeah with it being that much i might uh delay retirement for one year you would pause it really yeah and just let's pile up cash and get ready for the marriage because as soon as you walk down the aisle you're a hundred thousand dollars in debt and you got to get that cleaned up then before you start retirement and you're 22 you've got plenty of time to get to retirement either answer is going to be okay there's not neither one of us are you know neither one of our answers are wrong it's just a matter of i i think you're it sure it sure would be cool if uh out of 65 000 in 18 months you had put aside 60 and you only had to knock out 40 when you got married well you'd write a check after you walked down the aisle for 60 because you had a pile of money laying there and and then you'd have to knock out 40 when you got married and she passes her her uh her bars and uh you know her her licensing and all that and is able to go forward but yeah i i because you're going to have to stop retirement after if you're only going to do it you're only going to do it for one year that's fair and then you're going to stop it and get because you're going to be back in debt but either ways okay i mean you could do your roth ira for one year like rachel's saying it's not a not not a wrong answer here uh the fact that you're 22 you're graduating in economics she's graduating as a pa and you're even asking these questions makes you a genius i mean you're just so far ahead of the rest of your classmates because they're going to wander around some of them for a decade before they can find a checkbook and so you're just way ahead dude you know so neither one of these things is going to mess you up good good call thank you man and congratulations rondell is in new york city hi rondell how are you hi dave thanks for taking my call i'm well how are you better than i deserve how can we help um so i am looking to so i just sold my house and i'm looking to purchase a new home so i'm wondering if i should get a two-family home that's going to be a bit more expensive obviously real estate in new york is super expensive but i plan on renting out half of it and that income that i project should bring me down to that 25 uh debt income ratio so i was wondering uh what are your thoughts on that or should i just go for like a regular house uh i probably would go for a regular house and the reason i would do that personally is a two-family home the good news is your renter is next door and you can watch out for what's going on the bad news is your renter is next door and if they want something just gonna be knocking on your door i mean it's um so it's a it's a little bit awkward at times to be in the same property the other thing is a two-family home ninety percent of the time that is sold is not owner occupied meaning it's going to be an investor buying a duplex buying a two two unit product and uh so your buyer on that kind of a thing is always an investor most always and it's therefore they're looking for a deal your buyer on a single family when you get ready to resell is retail it's joe and susie just got married once that house or whatever and so and they pay retail so single families of the exact same price will typically appreciate better than a duplex will just because of who the end user is when you get ready to flip out of it but uh it's it's not a bad idea it's not the end of the world but you know sometimes all we look at is the math and we're going oh the renter's going to help me pay and that's going to just be grand and it's like no yeah it's so there's a lot of crap involved in all that that's not gonna necessarily be fun so um you know i i probably wouldn't i wouldn't personally because of quality of life i just wouldn't want to live right next door to my renter it's just i just personally wouldn't want to do that and that's just and i've got a bunch of rental property and i'm not a snob i've been a renter that's not the point but i just that's an awkward relationship well it's the convenience of what they have towards you yeah i mean you're pulling in the driveway and they're both falling in the right way and it's like you know it's just weird next-door neighbor weird relationship so but you can do whatever i mean it's not a bad thing but it's certainly not a slam dunk oh yes definitely take the income because there's more to it than than just that when you're when you're renting property open phones at triple eight eight two five five two two five and by the way there are once you learn how to work with people in the real estate business and you learn how to interview a potential renter for one of your properties like you were interviewing a team member to come on board with your company uh it's not dissimilar you you you can learn to weed out people they're going to be a problem and you can learn to put in really high quality folks a lot of the rental property that we have rachel's husband winston runs our rentals runs all of our real estate and he does a great job screening the tenants in and it's not unusual for one of our tenants to have been on a property five years and our friends they become friends because they're good people you know and so you know you can get you know you never hear me say we're putting down renters we're not because i've been one and we work with a lot of really high quality people that for whatever situation whatever reason at this point in our life they're renting so you can you can get if you do the proper screening you can get a good situation this is the dave ramsey show [Music] so one of the things that makes the dave ramsey show unique from other shows is that we genuinely care about our listeners that's why we are very intentional about choosing our advertisers blinds.com offers high quality window treatments at unbelievable prices and then their customer service is truly unbeatable they make it simple to shop for blinds shades and interior shutters from home with easy online ordering and free shipping right to your door and blinds.com will help you every step of the way just like they've helped thousands of my listeners with free design help by phone and online plus they guarantee the perfect fit go today and take advantage of this week's special offer [Music] [Applause] rachel cruz ramsey personality two-time best-selling author number one best-selling author is my co-host today we're answering your questions about your life and your money open phones a triple eight eight two five five two two five her new book rachel cruises know yourself know your money will come out in just a couple of weeks january the fifth we will be shipping it it is on pre-sale right now and a whole bunch of you have bought it ahead of time thank you tens of thousands of you and we appreciate it uh if you pre-purchase it before january the 5th i highly recommend that by the way not only does it help us it helps you that's the important thing you are going to get a call with a ramsey preferred financial coach this is for a limited time you're going to get the know yourself know your money audiobook the know yourself know your money ebook and an exclusive video lesson from rachel cruz as well a hundred and fifty dollars in bonus items when you buy a 20 book uh so why do we go to all that trouble why do we bribe you like that to get you to buy a book ahead of time because it's a great book number one you're going to get it anyway you might as well get all the free stuff up front because it helps us with the best seller list to get them get a bunch of them pre-sold and so it really does and and so that's why we push it like this and that's why we give you so much free stuff okay can i can i interject sure you're allowed to it's your book okay and the reason for the bestsellers is not just for the title of it it's because if a book it's on a bestseller list other outlets pick it up they see it they read it so then other people hear about the book to help them yeah it makes it i i don't want people to think oh i just i want to be the best i don't know i i just already been number one twice you don't need another one but to do it yeah so that the book it is it causes the book to be able to help them go more that's right that's right yeah yeah so that it's out in the world more because again when people can understand why they handle money the way they do everything from how they grew up to their tendencies their dreams their fears all of it it gives really this validity of what we've been talking about that personal finance is 80 behavior it's only 20 head knowledge but knowing why you have the behaviors your ha you have help you change those behaviors that are unhealthy and win with money faster so it's a it's a fun new deep dive into how to look at money and yeah when you pre-order you get 150 50 worth of free stuff so check it out know yourself know your money at daveramsey.com washington dc todd is on the line hey todd welcome to the dave ramsey show hey dave how you doing great man how can we help all right well we actually live in alexandria virginia um thinking about refinancing our house i'm trying to really try to decide if it's worth it um i wanted to give you some current scenarios to see what you think what's your current interest rate uh current interest rate i financed last year at the end of 2019 i got 3.25 on a 15 15 arm okay i've been paying extra because me and my wife are in our late 50s and we want to get this damn thing paid off as quick as we can and i like that okay so it's a 32 a 325 arm yes 15 15 through my credit union yeah and what's the offer on the refinance so the credit union is offering 2.5 i was going to switch to a 15-year fix no points that they're telling me approximate closing costs because they currently hold my escrow and all that would probably be 6500 to 8000 that's the ballpark what's your balance closing costs uh we owe 384. we only oh the 6500 included escrow setup but you get your other escrow account back what's your closing cost not the 6 500. be about 3 200. i'd say yeah about that right yeah 35 i think okay so yes you're going to do this here's why here's why let's walk through the math all right rough and dirty you're saying you're saving three quarters of a point so i'm gonna just say one percent of 385 is 3800 bucks you're gonna save 3800 bucks the first year got you you broke even after year one everything after year one's gravy on the biscuit you're gonna save 3 800 bucks or so every year until you get the stinking thing paid off not quite because your balance is going to go down but overall i mean you're going to save tens of thousands of dollars over a 10-year period of time by doing this refi absolutely i would do that and right now i've been paying 1100 extra every month and right now that's just just paying that extra saving me about almost 119 000 in interest and if i switch to 15 and pay just another about 300 extra a month to keep the same payment i'm doing right now exactly i'm i'm i'm shaving off another 40 000 in interest that's the shortening of the mortgage which is one analysis but the way you analyze whether to refinance is simply your interest saved the difference in the two rates times your balance versus your closing costs gotcha and that tells you whether to do it or not and you have a one-year break-even point on a break-even analysis on that and if you're going to stay in this house that's a no-brainer you do that and considering it's an arm versus getting rid of that arm is a benefit too yeah yeah that's um never do an arm folks uh especially in the lowest interest rates in 50 years where do you think it's going to adjust from here up we just don't do arms no no no no no no open phones at triple eight eight two five five two two five ryan is in roanoke hi ryan welcome to the show hi dave how are you now better than i deserve what's up hey so i graduated this spring uh from virginia tech and i'm starting to take a look at paying off my student loans and i was introduced to some of your videos through youtube and i'm trying to figure out the best way to go about that cool how much student loan debt do you have ryan uh just over 50 000 i think like 51. okay so do you have any other debt besides that um a car loan or um a couple thousand let's go left okay but it's paying off quickly yeah yeah and is the 50 000 student loans is it broken up into multiple loans or is it one large student loan um it's multiple loans and i guess that's kind of where the main question lies i've been saving up to try to take care of the highest interest rate uh one of those loans to save myself some money and after watching your videos about the debt snowball i'm not sure if i should do that or take care of a couple of the smaller ones with lower interest rates first yeah sorry one last question how much do you have saved you said you've been saving to throw at the at the highest interest rate or you're just saying as you're getting money that's what you're paying off first um saving to do that i i still have a couple months or i guess now only about a month until they actually turn on six months after oh yeah that's fair i think my payments start in uh in january much do you have in your savings account um right now 11 000 after an end of year bonus i think probably more like 13. okay and what is your smallest student loan uh 6700 i think perfect okay so you probably heard this on youtube we're going to list your debts smallest to largest right so today i would pay off your car and your smallest student loan and you think that that would be the best you know the best way i mean i'm i'm definitely a saver i know rachel talks about are you a saver or a spender um i'm definitely a saver so i don't think there's a problem to keep going with it that you think that i should take care of the smallest loan and the car first yeah because when you look at the debt snowball versus the debt avalanche is another way of looking at the highest interest rate uh what you're doing with the debt snowball not only have studies come out to show that it is the fastest way to get out of debt but what ends up happening is as you start knocking out those smallest debts and you eliminate it completely and what you're not factoring in is just the emotional toll and what happens to human behavior when you start to get quick wins and so by knocking off the small step first you're actually doing so much to keep you motivated and ryan as a saver you know putting we're going to tell you if you have 13 000 saved off your bonus putting it all towards debt except for a thousand dollars is going to make you feel very uncomfortable so just heads up on that too but that gives you an urgency as well so by paying off smallest to largest i'm telling you the behavior change that occurs in you the motivation continues to get those quick wins absolutely now let's do a little math okay fifty two thousand fifty three thousand dollars minus thirteen is forty and you make what do you say if it made fifty can't remember i don't know if he could told us what his income was he uh but so how quick you're gonna play off 40 uh maximum of 18 months you're gonna do it real fast now dude get after it get it this is the dave ramsey show [Music] if you're financially conscious you know that healthcare expenses can take a big bite out of your budget christian healthcare ministries or chm is here to help trim those expenses and make sure your family is cared for chm is not health insurance but it is christians helping other christians by sharing each other's medical bills most people have the means to pay for basic doctor services but when it comes to something at a much larger scale say several thousand dollars for surgery or hospitalization folks are worried they'll be left to try and find a way to pay for that themselves not too long ago i was diagnosed with ovarian cancer and they really came through so far we've had over 180 000 worth of bills and got close to 75 discounts chm shared the rest of the expenses to see if chm is right for you and your budget check out chministries.org backslash budget [Music] rachel cruz ramsey personality is my co-host today open phones at triple eight eight two five five two two five our question today comes from blinds.com they have a 100 satisfaction guarantee even if you mismeasure you pick the wrong color they'll remake your window blinds for free you get free samples free shipping and with the new promos they run all the time you'll save even more use the promo code the magic word ramsey and you'll get a better deal today's question comes from monica in nebraska we are on baby step two and we are in a large amount of debt because of various stupid decisions my husband is really not interested in working this program i am the one that does all the financial stuff and i am the main br breadwinner he has basically said tell him what can be spent on various categories and he will make it happen so i've decided to work the debt snowball is it wrong to move forward when he isn't really supportive well so monica the deal is the when you're married when you both can work together and be on the same team and go towards the same goals you have the same vision you're gonna get there faster because you're both gonna be willing to sacrifice you're both thinking about it day in and day out like that is what you're working towards as a team so you're going to get progress a lot faster it doesn't sound like he's not necessarily not supportive he's kind of like just tell me where i can spend it and i'll spend it and that's kind of it he's kind of checked out i wish he was more emotionally not interested in working this program but he said just tell him what he can what can be spent in certain in various categories and he can i would i would tell him i'm not your mother be a man go down to walmart on aisle three and pick you up a backbone okay no really monica you're a little wuss i think seriously you need to step up you need to man up and walk with your wife beside her yes he does but he's not asking the question it's monica so what does monica do i know monica needs to call him out can you imagine if i walked in and told your mother that i didn't really care and you just do whatever you want and you take care of everything and i'm just going to sit over here in the corner and wish can you imagine what your mother would do she would un-joint my butt that wouldn't even come close no really i mean call him i know but welcome to this is this is this is a lot of this is a lot of people situations though in america it really is and it's so the woman is has become the one she is the cfo of the household i mean she really is the one doing the money doing everything uh in regards to money and so you have to realize women out there number one that when your husband is on board you win faster so what do you do about it number two go and i would say sit down and have a frank conversation as respectful as you would like or as davism as you would like to take it that's up to you but to say hey here here's what i'm feeling here's what i'm thinking here are my fears here are my whys why do i want to win why do i want to get out of debt and talk to him have a relationship have communication so you guys can get on the same team and so when that doesn't happen i'd also say bring in a third party i mean at that point at that point you have more marriage issues than money issues because you're not willing to work together and in marriage that's what marriage is you are living life together and you're unified in every subject including money um so monica rachel's right about one thing you are you are 100 more capable than he is you have the natural gifting you're the cfo of the household i am not discounting that at all and so you're the one that's probably going to implement the plan you're probably even going to design the plan but this idea that he gets to sit over in the corner and be spoon-fed whatever he why just tell me when i can spend oh brother that's just ridiculous that's absolutely absurd and so you're going you're probably the one that has the the greater talent in this area and obviously the greater concern for that's not going to change but he does need to step up and say all right i'll walk with you in this dream i'm going to come with you let's look together at the budget you do the budget i'll look at it with you you're probably going to be the one that produces it because she's the cfo of the household i don't care if it's a man of the woman that's a cfo that's not my point but i got to tell you she's going to end up really frustrated with him being a wuss like this and it's going to damage their relationship because i have coached people in these situations after oh ladies try to do this for 10 years and she finally is tired of being married to a little boy yeah no that's what i was saying earlier though is a lot of women possibly listening right the second are is exactly in her situation yeah they are finding themselves that their husbands do not want to participate don't want to go along with it not that there was not that they're saying oh i want to know he's just passive it's the pat yes it's just passion yeah and that's just that's just gross seriously and this is yes and the wussification of america and the the deal too is that we say life problems usually masquerade themselves as money problems so there's probably other areas in her marriage i'm assuming that she's frustrated that he's not whether it's kids or whatever the situation is there's a that's the person that's what's that's the roles that have been in place not just with money and so being able to help him get on board is going to help also the marriage exactly because we it's a prerequisite to you winning here yeah yeah absolutely you are not going to be able to pull this off with this with the formula that you were using it's not going to work i mean it may work for a little while but eventually it's going to blow up for relational reasons and financial reasons um he may get tired of being dictated to at some point um you know being told and well my wife don't let me do this i mean what kind of hook gross and so um you know that that so that it's going to blow up it's not going to work we've done it too long i mean 30 years of doing this i've watched this situation unfold over and over again so what he has to do and you have to call him out on this or go see a third party a marriage counselor together what rachel's saying is exactly right on that um the you have got to go and get not he doesn't need to become a nerd and he doesn't need to become the one that drives the budget but he's got to be in agreement and he has to actively emotionally vote and say all right i i look at that i agree that that taking those steps is going to take us to a dream i agree on that's a lot different than sid and then you go and do the stuff that's fine no problem with that but when he's just sitting back and you're trying to drag him along and he just gets his little allowance oh my gosh it's true it's true i agree with that joe is with us in rochester new york hey joe how are you good how are you better than i deserve what's up so i'm on baby baby step two i've been watching you on youtube for a few months and i noticed you had a consistent message of saying be a contributing adult so i recently accepted a promotion at my job and i believe i can afford to move out my family thinks this is silly and they say i should live at home until i pay off all my debt i wanted to know if you agree how old are you joe 25 25 how much debt do you have 45 000 000. what do you make about 55. what do you do i provide solutions for my company well i guess we all do okay um are you married married kids single okay no okay yep i mean so go ahead you go ahead you go ahead we've been arguing through this whole hour go ahead okay so so mathematically could you save money on rent for a year or two live with your parents use what you'd pay for rent to throw out the debt get out of debt faster yes absolutely uh but there is something to be said about being a self-sustaining adult and saying hey out of my budget i have rents and i have things i have to pay that i'm taking care of myself and there's a level of dignity there joe uh that i think is really important so i don't know i i'm kind of one way or the other i mean i probably would be for you to go and just pay rent and start living on your own but if you're like really aggressive with this debt and you want to get paid off you're making sacrifices you're doing whatever you have to do and there's that intensity because you're working towards a goal i wouldn't be mad about that all three of my kids joe are uh did extremely well i'm very proud of all three of them including rachel winston um but in and they were all hard workers and they were all responsible with money when they were under my care in college when they came out of college and they went on their own with their own income and they were continued to be responsible with money and and they took on some extra expenses to not live under our roof to do that in all three of these responsible young adults cases i saw them grow up two more notches when they were on their own happens okay and you got to pay your own life bill and you got to wash your own clothes and you got to pay the rent and deal with the landlord and something else happens and so i would do it i'd move out within the next few months i'm not mad at anybody i'm not being mean to anybody but it's not just a math thing it's a developmental adult thing this is the dave ramsey show [Music] [Applause] [Music] [Music] so [Music] so [Music] rachel cruz ramsey personality is my co-host today open phones at triple eight eight two five five two two 225 aaron is in tacoma washington hey aaron how are you hi i'm doing well how about you better than i deserve what's up um yeah i just found you on black friday and i have dove into yours and rachel's books and been listening like crazy wow thank you but i'm yeah i'm still finishing baby step one on my four walls um we're required to re-roof however as i'm approaching baby step two um i have a possible funeral and burial in the near future my estranged father has placed me as executor i don't know how much these things cost and i know there won't be any cash in his estate until life insurance is paid out so how much does that cost and i would assume that i need to start saving for that before i jump into baby step two where is he um he actually was in hospice in california but one of my brothers picked him up and brought him back to washington okay to call the funeral home in the town that he's in okay and just um and uh tell them you have two problems uh number one you have an estate that is gonna be formed soon he's in hospice and um there's not much money in the estate so um this sounds awful but i'm gonna say it out loud okay uh it's what i would do if i were in your shoes i'm gonna call the funeral home and go i need the budget funeral what's the what's the bottom line and you're probably gonna find five to seven thousand okay okay uh as long as you're not in some kind of major metro area and you get a hold of some kind of crazy funeral home but most of them have a budget process okay for families that don't have any money um okay that i mean and i you know you can explore all kinds of different options cremation or whatever it's up to you and look into those things and just but you know gather up the dollars associated with the three best options and then you can think about the three best options okay um and uh uh that that's your first thing and then you know what your target is then the second thing is ask them if they will accept and a tell them there's a life insurance policy involved but there's no cash in the estate will they accept an assignment of the life insurance proceeds up to the cost of the funeral most funeral homes to do that okay an assignment okay look here i'm the who's the beneficiary the estate or you i am okay so you can come take them policy and show them i am the beneficiary on this policy and it pays x number of dollars a lot more than you're gonna need for the funeral right okay yeah and um and you go i'm willing to assign let's just call it if the funeral was sixty three hundred dollars okay i'm just making this up but if you know i'm willing to assign the first sixty three hundred dollars out of this and have it paid directly from the insurance company or just give you a uh you know an agreement a written agreement that the money as soon as it comes to me will go to you but they will work with you because you can usually collect that money with most insurance companies within six weeks okay and so they're used to having to do that it's not that unusual at all because a lot of families don't have the cash but but do have life insurance so two things one is gather up the information and then two but the problem is it's um it's icky to talk about it's awkward even just you and me talking about it's awkward sure yes yeah absolutely i mean it's your dad he's estranged that's icky uh you being having to fix this and take care of all of it when there's not much relationships icky again and now we're talking about the cost of funerals you know but it's just life it's just life i mean right and so we're just going um what's the least expensive way we can take care of his final remains in a in a way that you 20 years from now are proud you did it that way you know yeah i mean up until i found you i was just gonna put on a credit card so i definitely want to plan that i don't do that because well they may ask you to do that but i would just say that's not an option push back on them okay again they're used to working with families that have access to the cash but they've got to get it out of the estate somehow that's not that's a fairly normal transaction because most people don't do good planning and most people don't have any money so when i would assume to that in that part of business as well there's different levels there's ways you can probably spend a lot oh yeah um so making those choices i think what is is important to be smart and to have the date in the dignity and respect of course of your dad like you said i like that advice though like from 20 years from now you don't know regrets and you know a lot of people have really strong opinions about their uh final resting place and so if you're listening right now and you haven't really planned that and you care a lot um you can go to a funeral home and pre-plan we do not suggest you pre-play pre-pay don't pre-pay for your funeral but you can sit down and go look i don't want the freaking bentley i want the chevrolet where i want the bentley i'm not going to care at this point whether what color the thing is it's not going to be that color for but about six months anyway so it doesn't matter you know and so you know you may have different you know we have wicked sense of humor around the ramses but um but the uh but yeah i mean you can decide all that for yourself and then your heirs don't have to uh because you know you're uh you know rachel probably would like spend a lot of money to make sure her dad rested beautifully and you know daniel would put me like in a box no denise denise one so i probably ought to go plan this so that i get what i want out of this oh man no i'm going to be in heaven so i'm not worried about what what the box looks like so i'm not sweating it but it's a it's such a weird discussion and and it's hard and and i think too erin is she's smart to be thinking all of this ahead of time yes because when a passing does happen estranged or not the grief comes i mean they're right there's just the human spirit and emotion that goes through when you lose someone and when as many decisions can be made ahead of time it's better that's what we talk about a will that's why we talk about having a legacy drawer so everything's in there like to to limit as much as you can on the tactical side for your family is is a way to say i love you as well yep yep so we have always said don't pre-pay but always pre-plan and how much detail you want to go to into on pre-planning actually causes your wishes if you're if you would be aghast that your children spent twenty thousand dollars on the casket and the vault then go over there and pick out the four thousand dollar one and tell them that's what you got you know that's all i want or vice versa yeah be a gas that they put you in the 4000 and little cheap skates instead i wanted to be in the 20. you know i mean okay so so another way of looking at this too i feel like we i've heard you say this before that in order to have for to have life insurance the reason you need life insurance is if someone is dependent upon your income but if you don't have money is there a reason to have life insurance a small amount just for burial or burial costs is that that would be a reason to get life insurance as well if there's no one if you can but that's a ten thousand dollar policy i mean it's not you can get it with your checking account you know it's not it's not a it's not a big expensive item but the idea of pre-planning through anything that's highly emotional uh certainly uh you know having a your your your will uh life insurance funeral plans all those kinds of things is just it's a gift to your family folks for you to do that at the end of the year go on mamabearlegalforms.com and you can get your will done in just a few minutes it's very easy to do if you don't have a will or you haven't updated it you need a will and you know if you go ahead and do it like this week then when everybody's around next week you can tell them if they're in the will or not sit down and have a discussion go ahead and do a reading of the will while you're alive if you want to piss them off do it while you're living yeah okay no but we say to do that though right yeah i would do so to do that conversation though don't surprise you're joking about it but for real talk about the stuff we uh we have a meeting once a year yes with the ramses we call it the win dave dies meeting and it's like when something happens to dad or mom or both here's what it is but as a ch as a grown adult child i'm so thankful that you guys are talk about it and communicate about it so it is a gift it really is it's my monty python move meeting i'm feeling much better it's just a flesh wound this is the dave ramsey show [Music] so [Music] [Music] welcome to the dave ramsey show you can be intentional about your character you can have money and a career you are the hero in your story [Music] live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the dave ramsey show where debt is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol of choice i'm dave ramsey your host you jump in we'll talk about your life and your money rachel cruz is my co-host today ramsey personality number one best-selling author and my daughter open phones at triple eight eight two five five two two five that's triple eight eight two five five two two five jessica starts off this hour in tulsa oklahoma hi jessica welcome to the dave ramsey show thank you so much for taking my call dave and rachel i'm excited to be here on sure how can we help oh yeah okay a little background my husband and i are in our early 30s um we are just finding dave ramsey and by we i mean we have 30 000 in our savings we're about 165 in retirement and all of our debt is just in our mortgage which is about 103 000. so due to cobin i'm now a stay-at-home mom of three young kids um so down to one income and i'm just trying to decide um how do i get my husband get so intense um just because we're down to one income and have never been here before and because it's just our mortgage he kind of thinks it's well fine everything's good there's no reason to just be crazy about it but and then hard in the family and things you know we can knock this out in seven years so am i do i need to just break a little bit or do we just hammer it it's probably it's probably in between the two of you um gazelle intense is no eating out no restaurants no life because you're getting out of debt in baby steps one through three because you're broke and deeply in debt and you have to sacrifice and work like crazy to get out of debt once you have your emergency fund in place and you're debt free but your mortgage you move on to baby steps four five six so four is fifteen percent of your income going into retirement five kids college and sixes pay off the mortgage early that is not gazelle intense that is intent that is intentional but not intense and so um you know i so i probably want him paying more attention than he is and i want you to lighten up a little bit somewhere in between you see what i'm saying what do you think rachel yeah i mean that's a good analysis because now that you're down one income jessica it's naturally going to slow back you guys have less money coming in and so in order to do retirement still in order to save for kids college and putting money towards that there may not be a ton right at this moment to throw extra at the house depending on what you guys have we'll see what you're making uh we bring home monthly around 4 okay all right yeah you can put your 15 towards retirement start something for the kids college and then any other money you can find in the budget um we're going to do some living with it i mean you need to buy that couch or upgrade that car or whatever you pay cash for all that so no more debt and then we're going to go ahead and start anything extra we get we're going to throw out the house you get a bonus you get a little inheritance whatever it is we throw it at the house throw the towers right at the house and most families will pay off that house in about seven or eight years maybe nine but we don't need to just say uh on his side oh it doesn't matter everybody has a mortgage no everybody's broke you don't want to be everybody exactly on the other hand you don't need to live on beans and rice and have no life at all and everybody's miserable so you can put five dollars more on the mortgage sure okay we definitely have a little room there i think it's just getting him to the point of understanding that we don't have to be like everybody else well you don't want to normal almost broke 78 of americans live paycheck to paycheck and i would give you guys credit though jessica because you guys aren't normal right now i mean you have you have 30 000 in savings no debt but a mortgage i mean you you guys are not normal right now in a great way so you guys have made great headway um but yeah it's just that that little extra at the at the mortgage so you're already weird yeah you're just trying to him from just trying to keep him from nodding off at the wheel he needs to just keep driving that's all so you're you're in pretty good you're in really good shape but in terms of just the way you communicate through this really all you need to ask for and expect is intentionality and not accepting oh well everybody has a mortgage that's not okay uh on his side he needs to be able to expect well we're going to save up and buy this item or do this thing and we're going to do some of these other goals and you know what i find too jessica for men specifically when they see something visually it changes the game a lot of times so even just like taking your mortgage putting it in an excel sheet or do a mortgage calculator but show him how much of the money is going to interest show him exactly like what is happening and if you paid off your house in seven years versus 15 how much you're going to save an interest how much extra you're gonna have to go and invest and just do a little mapping out since you're the nerd and you probably like this stuff just do okay for 15 years from today if you're 30 at 45 years old if we still have the mortgage here's what we'd be financially if we paid it off in seven years and we invested for seven years a mortgage payment here's how much more we would have so the visual standpoint for a lot of men helps when they see the math agreed open phones at triple eight eight two five five two two five lloyd is in boise idaho hey lloyd how are you i'm doing good how about you dave and rachel better than we deserve what's up i want to see what you think about i want to upgrade my motor home and i'm going to need probably around 50 000 to do that um i'm 58 my wife is 57 we're both retired um my net worth is about 1.5 and uh total in cash is about 1.2 um but i wanted to know what you thought about where i should take that money out of to fund that motorhome and i was thinking of i have 33 000 checking i was going to take 10 000 out of there i have 29 000 and savings i was going to take 5 000 out of there and my wife's roth ira she has 72 000 i can take 15 out of there and take 15 out of my ira or roth which is 78 000. i'd leave your iras alone leave those alone let them grow tax-free this other money's just sitting there so where would you take that money from then well you said that you said there's a i mean you pull 10 out of that first 33 and after that you said there was another account that was sitting with cash right right savings account was 79 000 and who's like you said that was 29. okay you can clean that one out what's the what was the one that was 79 oh that's uh the roth rra don't want to touch that one all right so you got uh uh 39 10 and 29 so where are we going to get the other 20 without tapping into retirement well that's what i was trying to wonder where we should how we should do that you know i thought you said you had a lot of cash how much is it all tied up in retirement the whole million seven no no um about a million two is in retirement tired of retirement okay now we do have a joint account that has 284 000 in it what's that um that is just our regular uh account your investment account just an investment account yeah just simply but it's not in a retirement fund of any kind no it's not we'll use some of that yeah that's fine hey man you did great go buy an rv you did it touchdown you're a millionaire seven you did it you worked your whole freaking life man live like no one else and later buy an rv there you go that's what i mean fifty thousand out of a million seven for a toy you dadgum right that's a good ratio do that this is the dave ramsey show [Music] [Applause] [Music] folks it's an honor to tell you about the army national guard not only are they big supporters of our high school curriculum but they also give you the opportunity to impact your local communities whether your goals are to get an education serve your country or have a better life the army national guard can help get you there plus they offer unbelievable financial benefits secure your future today visit nationalguard.com to find out more [Music] [Applause] [Music] [Applause] rachel cruz ramsey personality is my co-host today this is the dave ramsey show we're glad you're with us america open phones at 825-5225 merry christmas to you deanna is with us in denver colorado hi deanna how are you hi dave hi rachel nice to talk to you thanks for taking my call our pleasure how can we help well i have about 300 000 in life insurance on myself i'm a recent cancer survivor this year right now there's no sign of the cancer so that's great news yes i have thank you i have a cash or a whole life policy for 61 000 that has a cash value of 6300 right now i'm trying to decide whether to cash it out and put it towards our debt snowball it would move our debt free data for about six months but because of the cancer me getting term life to replace it is not super great and i'm just wondering what's right not gonna happen it's not gonna happen this year at any reasonable rate anyway um so you have how much life insurance on you this 63 and you said 300 with the 63 there's 294 without it there's 233 okay and what do you earn um i make about 53 000. okay so you're a little bit underinsured either way um and you're married yes i am and what does your husband make and how much insurance does he have he makes 50 000 and he has about 475 000 on him so he's in better shape on his insurance yeah um i wouldn't drop it right now okay i hate whole life and i know 99 of the time i would tell you to cash it out but um you know we need to get you get cancer further in the rear view mirror so we can get you more insurable and get you back up to about half a million a total at some point and when you can do that reasonably within your budget part of doing that will be to drop this okay but it's out of an abundance of safety because you're just not going to get insurance for a little while i mean right you're not in i mean you can get it but it's the cost is going to be astronomical indiana your husband is his a whole life policy or is his term no his his term okay okay i was going to say for him to get out if it was whole life that's a good point yeah so you can call xander insurance and uh even talk talk with one of the reps and start to get a feel for uh you can even run an application in if you wanted to uh just to get a feel for what because they'll bounce back and go well we can't cover you now but we'll be able to cover you in 18 more months or in 24 months the rate is going to drop in half of what it would be today or something like that so you can kind of start planning the further cancer gets in your review mirror the you know the more likely you're going to get insurance and the less it's going to cost okay well thanks for your advice we've paid off a lot in the last two years thanks to you guys and i just love the program so thank you thank you we're proud of you well done congratulations we didn't pay it good job can you beat cancer that's even yeah there's that little assad yeah bigger than the debts much bigger much bigger teresa's in tampa florida hi theresa how are you hi i'm great thank you and rachel for taking my call i appreciate it sure how can we help um i have a question i work for a very small company there are seven employees i'm a geriatric care manager and i make about 40 000 a year and i had a client that passed away a couple of months ago and out of the blue her family sent me a check written out to me as a gift they said it was a small token of their appreciation for taking care of their loved ones and it's for five thousand dollars wonderful that's a lot that's a lot of money for me but um our company doesn't have a policy against gifts or about monetary gifts so my boss is trying to figure out what she wants me to do i have sent an email to the person that gave it to me and said thank you so very much i really appreciate it but you know i don't feel like i can accept this money but they are insisting that i keep it good they should and it's not in your boss's business if he doesn't have a policy well that's kind of my question i i have um in in my heart if if they insist that i keep it if i can't get out of it um i have definitely some charities that i wanted to go to and some things that i know were near and dear to my client's heart teresa no no you're supposed to have this money you served these people and they were grateful you're supposed to enjoy this money you don't need to feel guilty you didn't do anything wrong have you ever gone to a restaurant and left a tip that was a really nice tip for somebody that gave you a great did a great job waiting on the table as much as i can do i know but if you left have you left a nice tip where you were kind of like that was a good tip yeah did you want that person to feel guilty and go give it to a charity because they didn't deserve it no they deserved it they waited on your table and did a good job and you were honoring them and it honored you to be able to do that to give them that tip don't mess this up this was for you you did great this is an atta girl well thank you for that i just i i not only feel guilty i also my boss has been kind of mentioning different ways she thinks it ought to be spent i don't care what he thinks it's not his money it's not her money it was made out to you right from this family yes okay now if i am your boss if i am your boss i am going to be not with you but this raises a question in the business that you all are in if i'm leading this organization i think he should or she should put a policy in place that limits gifts because we don't want the caregivers that people are paying for with our company to get wrong motivations where they try to snuggle up with the person they're taking care of in order to get money and we don't want this to turns toxic you didn't do that but if i'm in your business i want to make sure the caregivers are not being toxic in order to uh you know try to get some sugar daddy and that's the boss's problem though yeah but that and that's their problem and this just makes them recognize that but they don't get a vote this is your money absolutely i mean and i want you to enjoy it if you want to give a little bit of it mac i'll give you a maximum no more than 500 the other 4 500 has to be spent to further your life and your income this was for you teresa part of part of the art of giving is also learning to receive and it's very hard for some folks to receive but this is for you please don't give it away it is dishonoring to the people that sent it to you if they wanted it to go to the ministry uh that would support a ministry that the person that died uh they would have given it to that ministry they didn't give it to them they gave it to you and considering they wrote you a check thanking you they probably have been giving elsewhere they're probably a family of givers and they probably said wow you took care of my mom that my mom loved teresa she probably you're hurt that that that woman you took care of probably talked about you teresa all the time to her family when she passed they said we want to bless teresa cause she blessed us so you're good you're good you're good that's it and and we've had the pleasure as ramses to do that kind of thing many times and we fully expect it to go to you and i you know if i if i were on this family side i would be telling you the exact same thing and by the way they are telling you the exact same thing i'm telling you you keep it and no it's not your bosses and know your boss doesn't get a vote if your boss wants to put a policy in place for future things then that's okay they can do that and that might not be a bad idea and to kind of help ease the the pain for you teresa of taking this five thousand dollars you know we will say like if someone gets a big inheritance or a grandparent leaves a chunk of money to a grand son or granddaughter whatever the case says we do say yeah there's a level of you can honor their legacy really well and use this money maybe to pay off debt or to save or or to do something great to further your life you can just go spend it i don't care but for you to ease that a little bit maybe you say you know what i'm going to help pay down my car and start working my way to get out of debt whatever the case is whatever you do with it think of the lady that you cared for is she smiling when you're doing that with that money and then you know you're honoring her legacy she's in heaven watching you and she's she's smiling she probably is already smiling about this conversation you're awesome teresa you have a sweet sweetheart oh this is the dave ramsey show [Music] [Music] one of the things that makes the dave ramsey show unique from other shows is that we genuinely care about our listeners that's why we are very intentional about choosing our advertisers blinds.com offers high quality window treatments at unbelievable prices and then their customer service is truly unbeatable they make it simple to shop for blinds shades and interior shutters from home with easy online ordering and free shipping right to your door and blinds.com will help you every step of the way just like they've helped thousands of my listeners with free design help by phone and online plus they guarantee the perfect fit go today and take advantage of this week's special offer [Music] rachel cruz ramsey personality is my co-host this hour open phones at triple eight eight two five five two two five you jump in we'll talk about your life and your money 2021 is right around the corner thank god uh this new year take time to understand yourself and learn how to make healthy money decisions rachel cruz my co-host is going to help you unlock the psychology the strengths the challenges that come with each and the brand new seven money tendencies found in her new book know yourself know your money i was trying to figure out what that said okay and uh you'll want to pre-order it because if you pre-order it before january the 4th you can get 150 in free gifts so you got about a week and you need to get this done uh so also while you're there at daveramsey.com check out the 90 off a lot of things there our green monday sale lots of ten dollar items including rachel's contentment journal which is now ten dollars uh her former new york times best-selling books our number one best sellers are 10 my books are 10 so check it out online at daveramsey.com get the new book and get the uh get the ones that have been out a while for 10 bucks each lots of bargains there lots of things that you can do open phones at triple eight eight two five five two two five colorado springs michelle is with us hi michelle how are you i'm doing well thank you for taking my call sure how can i help so um my husband and i are in small business for a few years and a business mentor has been mentioning having key man insurance for our business on the case of our death wanted to get your opinion on that or if there's anything else that you would suggest that's in our will regarding our business uh are you the sole owners yes we own the business okay well key man insurance is typically used to buy a partner out that's the that's the most common use for it um the other time you would use it is just to replace the the talent that is gone when the person passes away the things that they're able to do that are unique to them and so it's going to leave a gaping hole and so as an example if you are driving the business and you're making the business run and you not being there it's going to walk with a limp for a while uh then yeah you might want to put some key man on you okay all right i i i but i i had i've done that a time or two here where i had some a particular person that was um at the stage of business we were in that if they had passed away during that you know three year period of time or something that it would have really left us um we would have been in a mess because we were building the whole thing around that and and i have covered them for that um and i have kept some key man on me uh just to make sure something happened to me that it would backfill some of the uh until the business got to where it can run without me which it is now it's easily running without me these days but um but back in the day when it was all dave dependent you know uh then i carried some key man then you do not use whole life life insurance for this you use term life insurance michelle what kind of business is it we need to use commercial cleaning so we're feeling the building's kind of like girls okay okay so what would happen to the business if your husband passed away oh that that's the problem he is the key man yeah okay so what does he do that makes him so key um he is basically the operations manager i mean he and everything i mean he is a do everything guy okay and what's your what's your top line what's your gross revs in a year oh my goodness um probably about 300 okay all right you know i might put 100 on him or something like that to patch you through a third of a year maybe 200 even pass you through a portion half of a year but you know if he passes away you're either going to turn around and sell this thing or you're going to put an ops manager in place to replace his day-to-day activities right and so you're just you would you just do you just put you know you just need to stop gap because you if you if you replace the ops manager within 30 days of him passing and they're competent you're not going to lose much revenue but just to make double sure carry a couple hundred on him with extra that wouldn't be a bad idea it wouldn't be in the world and that way you can cover for some lost revenue maybe even a signing bonus to get a good ops manager in there um and i'll tell you what a lot of people do in your situation uh too and if that were to come up um they put an ops manager in there with the plan that that person is going to buy the business from you because that and that's your exit strategy then uh so we see that a lot as well when we're working with entree leadership clients good question thank you for joining us melanie is in portland oregon hi melanie how are you hi i'm i'm doing great it's awesome to be able to talk to you you too what's up um well um my husband and i would like to know your opinion on whether we should pay off our house now or put our money into retirement in the kids college so this is what we've got he just got a bonus yesterday that will allow us could allow us to pay off the house and still have like six months of emergency fund left the issue being he has not been paying um the 50 total 15 percent into retirement we have no college funds for our kids who are ages 2 to 12. what's your household in um he works about 94 000. and what's the bonus um it was it's about 17 000 and we've got total with the savings would be about 119 000 in several different bank accounts that we have that we could use in the house we owe about 64 000 on it [Music] we you owe 64 000 and you already have enough to pay off the house before we have enough to pay off before the bonus yes we have yes so why haven't you definitely i think because i'm risk adverse and my husband does have some health problems that risk aversion because you can pay off your house okay because you don't want a mortgage yeah well that's that's my thought but his thought is he want he doesn't have as much retirement as he wants we have nothing for them so instead of sitting in a bank account yeah we've kind of dropped the bomb the last couple years he just got this new job about a year ago so we've not been making 94 000 for a long time this this new job just happened about a year ago so we haven't quite adjusted to the additional the extra the extra income yeah yeah yeah um yeah okay so yeah if i woke up in your shoes i'd pay off the house go and pay it off okay that was my that was my opinion okay yeah i would do it making sure that you still have and i would have for you six months worth of expenses in the bank you guys have that in addition right yes yep or that that would be out of the 119. so i so we say three to six months of expenses i would go to six because of his health problems all of that and i just like have an extra money there just feels good the cash is there so beyond that you guys do need to do need to take your 15 of your income of his income if you're not working into retirement that needs to be a discipline you need to be doing that and then anything extra that you guys have after you paid off the house after the six months of expenses is there throw some of the kids college i'd go talk to a smart investor pro look at an esa look at a 529 option and start that as well but you guys need to be disciplined and that 94k that you're making a year that 15 of that goes into retirement okay melanie great okay well thank you so much we got an edition yes you cannot take part of rachel's advice it'll be bad advice you have to take the whole thing it is time to take this blessing of this job and this money and be very intentional with it it's been lazy it's been sitting in a lazy bank account it's time to put the whip on it and make it work pay off the house start the 15 with a smartvestor pro and start the kids college by the end of january you have an assignment by the end of january no excuses put that money to work it is sitting over there being lazy and you allowed it don't allow it to be lazy put the whip on it this is the dave ramsey show [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] how would you like to make your money finally behave like we were talking about with her you know you make it go and do what it's supposed to do because you have an exact plan a clear path and you know exactly what to do when to do it and then you go do it because you've got cheerleaders in your corner coaches cheering you on you got people telling you do it right don't do don't go left go right showing you exactly what to do this is what happens when you get into ramsay plus it's our step-by-step money plan that'll help you pay off your debt really fast faster than maybe you ever dreamed and you can start spending and saving then how you want to because you don't have your freaking payments you'll learn practical ways to pay off more debt and save for emergencies you'll plan your spending in the world's best budgeting app every dollar and you'll track your progress you can get a free trial to ramsey plus all you got to do to get 2021 rocking and get your reset get things started i mean after this year you need to get started right ramsey plus for the free trial just text the word trial two three three seven eight nine text trial two three three seven eight nine mike is in rock hill south carolina hey mike welcome to the dave ramsey show hey dave how are you better than i deserve what's up i feel like we have hit a sort of a brick wall we are trying to build a house and are having no luck without a credit score so far okay i've talked to some folks at churchill and according to them they go through local lenders for a construction loan yeah and every local lender has requires a credit score to get started even though we have at least twenty percent down it's not way more than that okay and i just don't know what you try to have you tried a credit union i have i've worked with my credit union i've been with since i was born and they do manual underwriting but they tell me they have to have a credit score to get started and then they go from there i'm challenging that they don't have to because they're portfolioing that loan they're not selling that loan to anyone that's just an underling you need to get to a manager a senior the president of the credit union depending on how what size the credit union is they do not need a credit score to make a construction loan that's absolutely asinine i don't believe it okay i would bust up on some people now you know bank of america is not going to make you a construction loan without a credit score i don't have any doubt but i'm not doing business with those doofuses anyway so but your local bank i mean we're listen here's the thing if you're dealing with a mortgage like a fannie mae mortgage you can get that manually underwritten but most of the mortgage companies don't know how to do it because fannie mae requires a credit score to package them together or properly done manual underwriting which not many people other than church you'll know how to do okay so that you will run into problems there and there's a valid reason for that because they're packaging those loans together they don't keep those loans they sell them and in order to sell them they've got to be packaged a certain way does that make sense yes and if the opposite of selling them in this business is called portfolioing the loan meaning the bank keeps the loan in house the credit union is portfolioing this construction loan or the local bank is either one and so they can they can make up whatever rules they want to make up there is absolutely no pressure on them from an outside force of any kind that's requiring a credit score and so it's just a dumb butt policy that you got to bust up into meaning you got to get somebody use a brain i've been with you my whole freaking life since i was born and i got 20 down and i've got the permanent mortgage set up to take you take out the construction loan you're only going to have the loan on the books while the house is being built when it's completed the mortgage is sitting over here already pre-approved the take-out letter is in my hand to take out the construction loan and so this is almost a no risk for you you know me you know my income you know my net worth and my other stuff or i can show it all to you and so the credit scores are completely bogus non-related issue you follow me yes so that's how i'm talking to the president of the credit union or the manager of whatever or i don't know how big a credit union this is but a lot of credit unions the small enough that the president so you're gonna end up talking to which is fine and it's you know it's just asinine and so this is one of those things you just challenge the policy and you just say no it's not okay it's not okay that you're treating me a customer that way as if i somehow didn't pay my bills and and they do not if they're portfolioing the loan if a bank is keeping the loan in-house the bank can completely make up whatever rules it wants to make up or waive any rules it wants to waive because they're keeping the loan it's just like if i'm loaning you money i can make up whatever rules i want to make up and if i go well you don't have a credit score but you've got all this other stuff well i don't need a credit score it's okay you know and that's all we're talking about here so uh but yeah you run into people who've forgotten how to think and sometimes we have to remind them well that's the hard thing it's just challenging the industry right and so when you don't have a credit score because you've gotten yourself out of debts and it's been a long enough time that it's not there there are going to be things insurance renting an apartment underwriting a mortgage construction loan all those things uh you can run up against things because the industry has been so set but there are ways around it all yep i mean anthony sat the other day he's got it on youtube and called 15 apartment complexes and just asked the question he said i'm moving from out of town uh i'm just getting started moving on my parents house i don't have a credit score can i will you rent to me and out of 15 12 said they would yeah there you go with a deposit with them you know and he said is it a couple of them had an extra deposit if you didn't have a credit score yeah and a couple of them were just now it's no problem there's no problem at all if you got your deposit and you got you know they have to have proof of income you have to have a job yes yes but uh you know normal stuff that the apartment's going to look at but this idea that no apartments were in two without a credit score he got a 12 out of 15 that would and he didn't say i'm anthony o'neil he just called and said hey i'm just checking i'm coming out i'm moving from out of town and you just and he put it all on youtube so you can pull it up on the ao's channel and see that somebody says oh you have to have a credit score for getting a run apartment no you don't oh you know 12 out of 15. dentists agree complexes agree yeah 12 out of 13 apartment complexes agree all right up next is going to be steve steve is in phoenix hi steve how are you hi dave i appreciate you taking my call sure how can i help yes um i have a mortgage with a principal of interest left of 277 000 and i have 1.6 million dollars in my 401k and i was wondering if i should pull that money out in one lump sum or spread it across a couple years for tax purposes to pay off my mortgage how old are you 66. okay uh you could sit down with your tax preparer and decide if you wanted to do it over two or three years just to not bump up a tax bracket but i think you're going to bump up a tax bracket anyway is my guess um i mean you could look at tax planning this and make it doing it the most tax efficient way i got to tell you you've worked your whole life and i'm guessing you didn't it did not inherit this money because it's in a 401k right that is correct and you're 66 years old and you got a million seven way to go congratulations i i think you worked your whole life to have more peace than you've got with a mortgage so regardless of the tax situation if i were in your shoes i'd probably just pay it off i want to be out of debt and i'm going to pay some taxes to do that because this is a taxable account when you cash out a 401k traditional and so to get 277 out you're probably going to take out 377 something like that and so your net worth is not going to change one penny it's going to be exactly the same the only difference is you'll have more equity in a house and less equity in your 401k still have 1.3 and still have 1.3 in the 401k yeah yeah exactly so you're still gonna be a millionaire in 401k alone not to mention you're paid for house i want the piece of a paid for house and i it's just as i there's few things i've done in my life that compare with the day i paid off my mortgage in the financial parts of my life uh you take your shoes off walk through the backyard the grass just feels different the borrower is slave to the lender and i know you've got the money i know you can pay it off anytime you want so so my answer to that is do it yeah i would do it good question sir thank you and congratulations on being an everyday millionaire you're what makes america great you guys people like that guy right there they're everywhere they're all over america and they're real quiet hardly anybody knows they're there there's about 12 million guys just like him and her and gals like him and her they're all over the place that puts us out of the dave ramsey showing the books thanks to james childs our producer kelly daniel our associate producer and phone screener i am dave ramsey your host we'll be back [Music] [Music] welcome to the dave ramsey show you can be intentional about your character you can have live from the headquarters of ramsey solutions broadcasting from the dollar car rental studios it's the dave ramsey show where debt is dumb cash is king and the paid off home mortgage has taken the place of the bmw as the status symbol choice i'm dave ramsey your host thank you for joining us rachel cruz ramsey personality number one best-selling author and my daughter is my co-host today open phones at triple eight eight two five five two two five that's triple eight eight two five five two two five jerry's going to start us off this hour jerry's in columbus ohio hi jerry how are you okay how are you better than i deserve what's up i was just calling um my wife and i are retired teachers in ohio and the way the pensions claim is set up when one of us passes the other one still gets the same income do we need to have life insurance sure okay so the next question is what if one of us can't get a policy well then i guess you're not gonna have life insurance what do you mean why wouldn't you be able to get a policy my wife's been diagnosed with alzheimer's and we went through xander and they couldn't find a policy for no you're not gonna make you're not gonna make a market on that that's right i'm sorry okay so uh so she's got early onset then um yes and the thing is we didn't go through your book but we are on step seven we have no debt we're investing worse and cost giving so everything's paid off and um and her income comes to you as long as you're alive once she passes through the school system right or vice versa yeah either way okay and how old are you guys um she's i just turned 70. i'm 64. okay all right um and what other monies do you have other than a paid for house and these two pensions we each have our own roth iras i've got a 403 b how much and we've got um in in those accounts about 350 000 okay i think you're all right to call yourself self-insured if you want to here's the rule of thumb okay number number one and the income the pension probably does you're probably right um but with the other things the paid for house and the 350 000 it definitely is there because you've got some flexibility so the question we ask ourselves is at 64 years old she's 70 and got early onset alzheimer's or or alzheimer's diagnosis if something happened to you we've got to be concerned that she's cared for right and we've already made that arrangement yeah well the the actual tactical care is one thing but paying for it with your both of your pensions and the 350 um i think gonna she'd be okay right yeah so you're probably self-insured you reverse the question something happens to her are you okay well even more so you're okay right yes right so yeah you're self-insured i'm good with that okay the purpose of life insurance is make sure the one left behind has got food right yeah yeah well we're both retired like i said we're actually still saving yeah and giving yeah well way to go investing and you did all this on a teacher's salary uh yes congratulations your salaries well done that was beautiful right it's awesome love that very cool that's the position you want to be in well done amy's in philadelphia hi amy welcome to the dave ramsey show great thanks so much for having me it's good to talk to you guys you too what's up um so i have a question for you all um calling for my mom actually she was my grandmother's caretaker for years um she had to quit her job to take care of her she did a great job but unfortunately she didn't save anything and she now lives on her social security my grandmother passed away a few months ago and she did though just now inherit eighty thousand dollars so it's a great blessing and she asked my husband and i to um you know to help her with this so i already had her an everyday budget she lives in a small apartment and um you know we're just having her live on that but we want we told her you know this is her nest egg and she really just doesn't want to mess it up this time she said so she wants to do it wisely do it god's way and um we want to help her through that so basically where i'm calling you to see what would be the steps um you know how do we walk her through this how do we help her with investing what would be the right way just not sure at this point okay yeah i mean my my first piece of advice would be to sit down with one of our smartvestor pros because they're going to be able to lay out things like what a mutual fund is putting it in some kind of account like that that grows and that she's able to say okay how much is my lifestyle how much do i need per year how much return do i need they're going to be able to really sit down and mathematically walk you through because that's that's the answer she's going to need how much does she need to live on per year what can this money do what can it grow to how much can she live off of yeah so you've got her set up now living on her social security right right right and in our heads we just thought you don't touch it and you just just invest interest just let it just let it grow a little i mean it'll grow eight to ten thousand dollars a year okay something like that if it's invested in good mutual funds i'm probably not going to invest the whole 80 i'm probably going to set maybe 10 aside as her emergency fund okay in a separate in a separate bank account that's not connected to the atm and it's not connected to a checking account or a debit card okay so it requires effort to get to it okay great and then i'm probably gonna do it exactly what rachel said and let's sit down with the smartvestor pro because you don't want to invest the money and she starts watching the news and the stock market goes down and she starts calling you in a panic instead if you know she needs to understood what she's doing enough she doesn't have to become a professional investor but she needs to understand and what rachel's explaining is exactly that that they'll sit down with her and not only help with the budget and you know we're not going to touch this money we're going to leave it alone mom you're going to leave on you're going to live on your social security and okay we're going to let this money roll in each month and each year as it grows and but you don't want to you don't want her to losing sleep over this because the market feeling like feeling like she did something wrong and the way to solve that is to teach her and teach you both of you and to have a person in your corner that you trust that has the heart of a teacher so click smart investor at daveramsey.com and sit down with them and they can help you do every bit of that very good question very good job well if you're looking for some great christmas deals there's still some out there our team is using every reason we can to give stuff away we're now running a sale the green monday sale all week this week at almost 90 percent off and for the first time ever we've even marked rachel's contentment journal down to just ten dollars plus the window to pre-order the know yourself know your money book the brand new book by rachel cruz is closing if you do pre-order you get a hundred and fifty dollars worth of free add-ons but you gotta do that before january four and believe it or not that's just around the corner it's here the book ships january the 5th so no more excuses this new year is the time to understand yourself and learn how to make healthy money choices and uh rachel cruz will help you unlock the psychology the strengths the challenges that come with each of the brand new seven money tendencies found in her book check it all out online at daveramsey.com the sale on all this stuff ends this coming sunday and you don't want to miss out on this pretty good stuff it's fun lots of fun stuff happening yeah closing out 2020. a lot of people are going to be helped with this book that's my prayer for sure a lot of people and tens of thousands have already bought it and it's um when they get it and start reading it they're going to spread the word it's it's a very helpful set of materials this is the dave ramsey show [Music] so [Music] [Laughter] we were drawn to christian healthcare ministries because we both had young families and we wanted to have more children and we had also just started a real estate company and needed to find health care coverage that would meet our needs chm is not health insurance but it is christians helping other christians by sharing each other's medical bills the medical bill sharing from chm was exactly the way the website described it there were no surprises no bait and switch no hidden agenda chm did everything they said they would by sharing all of our eligible needs we like that it's a non-profit ministry and that we were being better stewards of our money all while helping other families established in 1981 and accredited by the better business bureau chm is here to meet the needs of your growing family or small business get started today and check us out at chministries.org backslash budget that's chministries.org backslash budget we absolutely believe in it [Music] ramsey personality rachel cruz is my co-host today open phones at 825-5225 jay is in atlanta hi jay welcome to the show how can we help hey dave rachel thanks for taking my call sure how can we help yes so i'm 24 years old and i got about 18 000 saved up in a raw tsp account um from when i was on active duty in the military so my question is should i roll that over to a roth ira right now considering the fact that i'm currently in school and i'm not working at the moment uh you've left the military yes yes i would it's roth to roth so there's no taxes involved and uh you don't you're not going to activate anything and you've got 8 000 mutual funds to choose from where the tsp has about six options and a c option being the most valid of all of them but you can do a lot better than the tsp options in the open market with mutual funds to pick for your new roth and so yeah it's pretty simple get with the smartvestor pro at daveramsey.com and roll it to a roth ira we put it across four types growth growth and income aggressive growth and international we always tell you to take your 401k or your retirement plan whatever it is with you when you leave with a direct transfer rollover to an ira at the other on your own in because you've got more selection and more control it's pretty simple and uh same goes here thank you for your service by the way open phones at triple eight eight two five five two two five jessica is in canada hi jessica how are you hi dave and rachel thank you for taking my call i'm currently on baby step number two i'm sixty thousand dollars in debt um i recently started listening to you so i'm being intentional i'm going at it because all the times and i've paid off twelve thousand dollars so far thanks so i grew up with a very unstable home when it comes to money my mother is a very big spender and she never ever had enough money for the month um while i don't blame anyone else but myself for my bad financial decisions she's the ones who sort of pushed me or guided me in the direction to make poor financial decisions and all my debt i have is credit cards and loans so now that i'm being very frugal she thinks i'm completely crazy and she was pushing me to file for bankruptcy and every time i see her it's a constant battle because was on different pages and i can't seem to make her understand that what she's teaching is wrong and what she's doing is wrong so i wanted to know your input on how to approach that situation how old are you jessica i'm 28 28 okay well the hard part about the relational aspect of money is that some people just don't understand and the hard thing is you can't control them to force them to see that they are wrong so i would say on her end and unless she's asking and wanting to learn i wouldn't push you know your your stuff on her because she's she's not asking and you talking about it unless it's celebratory and you're like hey mom i just paid this off and i'm excited and you have that kind of conversation knowing that it's probably not gonna she's not have the best response i would probably just leave finances out of the discussion if she keeps bringing it up then there needs to be a boundary put in place because it's not worth the strain on your relationship you're doing something that is wise with your money and you're going down this journey she doesn't agree and so being able to put up a boundary and say hey mom since you keep bringing it up this is what i'm doing i'm 28 years old this is why i'm doing this because i want stability i want peace i want money in the bank and you can give your reasons why and say if you don't understand that's okay but i need your respect enough for me not to negatively keep talking to me you don't mean just having that sometimes you have to just have a boundary that says we can't talk about this subject because if we are going to talk about this subject we are not going to do well and i'd rather have i'd rather do well i'd rather have the relationship for instance i have a relative that votes wrong they just vote for the wrong people every time they they have a knack for it and um and they blindly vote for one party regardless and um so uh which i have no use for voting wrong or voting for the wrong party regardless are voting for a party regardless no matter what i vote for that party no i that's just ridiculous and so um but i love them and what i have figured out is is they're not going to change and so just constantly berating them about it is not going to help and talking to them about it is not going to help because it makes me mad so the best thing to do is just not talk about politics with that relative because they're just wrong you know and that's kind of what you may have to do with your mom it's just like mama i can't talk about money with you because you and i don't agree on this and we're just going to find something else to talk about because we love each other and it's just that's you know how's the weather uh how about them titans i mean you know i mean it's just you know it's just how about the football team you know i mean you can't find something else and you put that boundary in place like rachel's saying but it's very difficult to do um and you know probably the most difficult boundary is mother to grown daughter that is one of the more difficult relationship boundaries because both are relationship animals and they feel entitled they feel like they have rights to speak into each other's lives uh and so they don't you know sometimes they just don't do well with it and it's okay to set some boundaries in place and jessica i would say for you i mean i heard a little bit of your tone and and the way you even framed up the question that there's a little bit of hurt and resentment towards your mom i mean you said shh the way i handle money today is because of what i learned from her and i'm just in a terrible spot because of it and so there is this this interesting dynamic now that you are a grown adult and you're working through oh wow my mom you know did things in my childhood that i don't agree with and now because that's how i was raised i almost just didn't even know to do any better so that's how you got to this place i'm glad you're changing everything because there's a rule jessica and the rule is once you're 30 you can't blame your parents anymore okay you always say that i don't agree it's not that i put blame but there is real hurts and things that go on no i know i know but you can't blame them you can you can be hurt yeah you can't here's my quote i love this quote when it comes to talking about your parents you're not here to bash them and i heard a little bit right like oh right here to bash them we're not here to defend them we're here to tell the truth so you tell the truth jessica like tell the truth of of what you experience and then learn from that and grow and so i think both of the other ends extreme are unhealthy because you're not getting to the root emotion of your mom so there's a relational aspect there too jessica i would really dig into and if there's a level of hurt and resentment you may talk to someone about that i mean there's i think all of that is very healthy don't disagree you always say that once you're 30 you can't blame your parents well you can't you can't it's not polite you're you just don't like the statement but awareness that once you're past 30 you can still have hurt from your parents you can say i've heard but you can't blame him but i'm not speaking out of experience he has never ever done anything yeah oh yeah we should start a new radio show yeah we'll just start a new one here confessions confessions of the rams the uh uh so there's a difference there's a difference in hurt and blame though all right doctor tell me well you can still have you can you can be hurt yes and admit that there's a wound there yes and but you can no longer uh let that be the reason that you're not winning yes a hundred percent that's what i mean you can't blame them it's not blame is it's someone else's fault i'm not winning yes and that is not it is not no it's not your parents fault you're not winning once you're 30. it's your fault i don't know why i keep saying 30. that's just well i just made it up it's not it's not a scientific fact it's just a davis all right guys she's got 28. she's got two years to go she's still okay oh good yeah you got plenty of time jessica you're gonna make it oh crud open phones at triple eight eight two five five two two five you jump in we'll talk about your life and your money that's a lot of what i talk about though in the new book with the classrooms so she grew up in an unstable money classroom where the emotional the emotional communication was very stressed and the verbal communication was probably very open knowing how her mom was out so she felt a lot of that conflict and tension growing up and so that unstable money classroom if it does affect you all the classrooms affect you and that does leave a hurt it leaves a wound that you learn to overcome absolutely not not to blame for your dysfunction and that's why i know yourself know your money's gonna be great yeah that's right this is the dave ramsey show [Music] [Applause] [Music] folks it's an honor to tell you about the army national guard not only are they big supporters of our high school curriculum but they also give you the opportunity to impact your local communities whether your goals are to get an education serve your country or have a better life the army national guard can help get you there plus they offer unbelievable financial benefits secure your future today visit nationalguard.com to find out more [Music] rachel cruz ramsey personality is my co-host today as we answer your questions about life and money open phones at triple eight eight two five five two two five zack is in nashville hey zach how are you hey dave how you doing better than i deserve what's up ah thank you for taking my call um okay my question is me and my wife we are both in our early thirties i'm currently 34 she's 32. we're pretty well debt-free i guess my question is i owe 80 000 on my house right now i'm in the position to pay it off i haven't invested in anything and i'm still learning that process but i guess do i pay the house off now or do i maybe start the roth iras or go that route i i don't know what the best answer is that's the reason for my call you said zach that you can pay off the house so does that mean you have i'm guessing a lot of savings uh yeah i've got about a hundred thousand dollars and i and my wife both and like i said that leave us about 20. um i just i've been pretty focused on paying the house off if i keep track right now i'm paying extra to the principal it probably put me at about five years i guess i'll have it paid off yeah how much do you make a year about 62. that's great well what i would do zack is considering you have no other consumer debt you have a good amount of savings i would work to still fund some money into retirement i mean the earlier you can start this the better off you're going to be even three to four years the fact that you guys can start in your early 30s is going to be huge and so i would fund about 15 of your income into retirement so opening up a roth ira if your work has a 401k do that do you guys have kids yes i've got two little girls one's seven and one's a year and a half okay do you have any college savings for them at this point i do not i'm very new to the baby steps and like i said i was trying to figure out what the best yeah would be no you're doing great being in the position yes absolutely well you're yeah you're in a fantastic position on paper for sure so yeah i would fund 15 of your income to retirement then i would go and open up some college funds for your girls so either an esa or a 529 plan put some money there and then anything extra that you have that you want to throw at the house i would do that i would make sure you still have an emergency fund on the side of three to six months of expenses but anything beyond that i yeah i would look to to be putting the house down did i hear you right that you have a hundred thousand dollars in savings and eighty thousand pays the house off correct yes i know that money's just sitting there i know i'm just asking if i if i understood you right and i wasn't being sarcastic so if i understood you right then rachel's advice is perfect uh but i would write a check today and pay off your house okay and that's kind of been my question yeah then the other the other 20 000 the other 20 000 moves over into your emergency fund and then out of your income without a house payment boom right yes now in your monthly budget you set up a draw going into your 401k or your roth iras like rachel's talking about or your company's plan or whatever or or sit down with smartvestor pro and you may want to sit down with them anyway and then have you know if you just start a hundred bucks a month uh per kid it would go a long way towards their college as young as your kids are and so um yeah i'd sit down and get at least 100 bucks a month going per kid and and at least 15 of your income going towards retirement and without a house payment or any other payments in the world you're gonna have plenty of wiggle room in this budget to do that yeah and that's that's kind of been my question it was like because it frees me up a lot once you pay that once i pay the house off i just didn't know if that was the best move let me just tell you i've been doing this 30 years and i've been telling people for 30 years to pay off their house every chance i got i've never had anybody call me up and was pissed because they paid off their house exactly like dave that's the worst advice you ruined my life dave i've never heard that not one time people get pissed at me about a lot of stuff i get a lot of hate but it's never been about paying off your house so i get i do apparently i make most people mad about a lot of things but that one not people don't get mad about that one zach hold on i'm going to give you a copy of the total money makeover which has the baby steps outlined in it on steroids every detail every nuance every question answered about the baby steps shows you exactly what to do when to do it and how to do it and it will verify the conversation that you had with rachel and i and i put you in a great position here brother and what an amazing thing 34 yes way go man paid for house tomorrow if you wanted just like i mean the number of people do that almost none almost none and then to the point though zach of not having the house payment you have no other debt when your income comes in and you're completely debt free you have no other payments that 15 is easily put away and then you guys because because i could i i would think living with this hundred grand of cash over here feels good like there's a level of security there and when that strips down to 20 there's going to be like oh wow but building that back up without a mortgage payment is going to happen so quickly well 20 000 is plenty of an emergency fund with 60 000 income no it is but i'm just saying just the thought of oh yeah we could go buy a car we could do other things with that money yeah that short-term savings is to happen so quickly without that mortgage payment so that feeling of it but listen to this this is what i think cool 32 to 62 32 to 67 35 years if he just invests if he never gets a raise now if you go 40 years at your job and you never get a raise you're a loser okay but if he never gets a raise and he only invests 15 not more just 15 that's going to in good mutual funds in a roth iras he's going to have between five and seven million dollars making 60 grand because he did this so early that's that kid's on fire man that's cool see that's what that's why we tell you to pay off the house because it makes you rich that's right yeah and you be in a position to be outrageously generous you know what you can do with five to seven million dollars anything you want i mean and what if i'm half wrong he's still okay i mean still okay that's unbelievable so this is why nobody gets mad at me for telling you to pay off their house they get mad about everything else but they don't get mad about that open phones at triple eight eight two five five two two five james is in philadelphia hi james how are you hi dave how you doing today good how can we help good um i just had a quick question so um my wife is in 139 000 of student loan debt we recently just purchased a home about two months ago really the only debt that we have is the house and her student loans we have no car payments um no credit card debt nothing like that i just want to know the best way to tackle her student loan bet should you know whether we should just like pay half of it and then refinance it or just save up for the whole thing and just want to know the best way to tackle it how much do you guys make james a year um so my my wife makes about 42 uh 42 000 a year i am a loan officer i worked be basically commissioned but my year to date should be about like 260 000 uh this year why did she go 140 000 in debt making 40 000 a year what is she doing um so she went to a private institution um she was originally going for um like fashion merchandise and marketing um very niche market uh to really break into um so it was pretty hard to find a job um but yeah so here's what i would do um if you make 300 000 a year and you have 130 000 in debt i would pay off your debt in one year okay 140 140 from 300 leaves you plenty to live on okay like we have we have about like 66 000 66 000 in the bank now good right that's write that check against it and then you're paid off in six months okay you're not going to do any of this are you it's no no i am it's just it's it's hard to let go of the money like yeah i mean that would that would be draining the bank account like that would be complete dude you have to get rid of this sally mae is an ugly old woman and she's in your house and she won't leave until you throw her out and the faster you throw her out the faster you're going to get on with your life let me tell you the problem with paying off your student loan debt you're not going to do it that's the problem you're going to have to get on this like it matters and if you don't it's going to hang around for another 10 years and you'll have a bunch of theories and still have sallie mae in your bedroom this is the dave ramsey show [Music] [Music] so our scripture of the day hebrews 13 16 do not neglect to do good and to share what you have for such sacrifices are pleasing to god ralph waldo emerson said the purpose of life is not to be happy it is to be useful to be honorable to be compassionate to have it make some difference that you have lived and lived well [Music] and oddly enough by the way i'll add that that will make you happy go figure uh michael is with us michael's in dallas texas hey michael welcome to the dave ramsey show how you doing dave thanks for taking my call sure what's up i had a quick question um i had a two-part question if i'm able to have enough time um so my uncle pretty much just purchased a new vehicle and i was trying to teach your ways to him and you know just trying to find out why he didn't just buy out cash when he had the money available to him and his response was you always need a line you always need something open a line of credit open and in my head i didn't want to argue with them so i'm just thinking in my head well why would you want the line of credit open if you have the cash and you have no debt you're right yeah that's just uh that you know people have these sayings around debt that because debt is so normalized and they don't even think sometimes when they say stuff about how ridiculous what they're saying sounds i mean what he just said is i always want to be in debt yeah this company doesn't have a house or anything like that so that's all it's just like yeah um but you have a credit card you know you do fire points and stuff like that okay i can understand that but no i don't even understand that second my second quick question was i have my kids in a gerber uh savings plan and i was trying to find out because me myself i have a roth account and i was trying to see about how do i go about to see if i'm able to transfer the funds that are in their gerber account into a roth or an ira or what would be good for them it wouldn't be a roth or an ira just be opening a 529 and it's not transferring you just cancel that garbage and get a good mutual fund in your kids name for for a 529 plan um gerber is baby food company they're not an investment company and they sell gimmick life and whole life life insurance as a savings plan that's a piece of crap and it's horrible it's absolutely horrible so uh if i were in your shoes i would get with a smartvestor pro open a 529 or an esa for your child and just cash this stuff in and use that money to fund it yeah okay go a step further because you said it's horrible because i get as a mom when i had babies all the baby stores know you're pregnant so you get all these brochures so you get gir i mean i got so many of those flyers and it's horrible because the rate of return of what they're taking is so small explain when you say it's horrible to a new listener what does that mean well it's a whole life life insurance policy yeah for children and so which they don't need life insurance it's a savings vehicle yeah uh that pays almost nothing and it's housed in the life insurance world and you know anytime you get around insurance of any kind that is a gimmick meaning it's it's aimed at some kind of little weird corner of the world like this is life insurance for children for babies for god's sakes uh or it's a savings program for babies brought to you by the same people you buy your baby food from you should that right there is your clue you know so you know gimmicky insurance is like cancer insurance okay you have health insurance that covers you if you have cancer you don't have heart attack insurance why are you buying cancer insurance because you already have health insurance that's why you're not and these are gimmicky things another gimmicky one is um accidental death like you're more dead if you die by accident you're still just dead it doesn't matter you're not double dead you know and so your family needs money regardless of how you die well i'm likely to die by accident no you're not that's why it's so cheap that it's a it's a gimmick it's why it's you know it's it's like a a war an extended warranty that only covers one side of the television the other side it doesn't cover you know it's like right you know it's that kind of thing so you just don't get into that and then you have um you know other other issues so yeah it's just a bad gimmicky ineffective low return life insurance product for children and um yeah and it's it's uh yeah it's one of those things where the parents the the company knows you have this emotional need to when you have a baby to do something good for them and think about their future and your noble calling is apparent and they tap into all that and sell you crap all right seth is with us in dallas texas hey seth how are you i'm doing well how are you doing better than i deserve what's up so i have a uh well i've made a genius decision and bought a car i uh got it on a zero percent car loan and could potentially pay it off it's a five-year loan but i could pay it off in about a year's time does it make sense for me to put that money in some sort of investment vehicle or should i hang on to the loan at zero percent i've met with thousands of millionaires i've never met one that said dave you know i made all my money borrowing zero percent of my car and investing it sure so the answer is get out of consumer debt because that's what all millionaires do they stay away from payments of any kind all the studies all the data points we have from 30 years of doing this all say that the people who build wealth are the ones that stay out of debt of any kind or if they find themselves in debt like you have sir they work their way out as fast as they can and so i would either sell this car or i would get it paid off in about nine or ten months i could do that that's pretty much what i was looking for yeah and then you take those payments you never do this again you pay cash for your cars from now on and that's the shortest distance between where you are in millionaire that's the point because the payment your most powerful wealth building tool is not the manipulation of interest rates it is your income not given to some stinking bank in the form of payments and so stay out of the payment business and use the power of your income to build wealth with and that's that's what the borrower is slave to the lender means it changes everything okay i mean when your income is completely freed up and you invest it and you just watch it grow while you're sleeping i mean it's just it just goes it work it literally is working for you money works harder than any employee you'll ever have it works all the time it works 24 7. it never gets sick it doesn't whine it just works it's amazing i mean it works hard brian is in owensboro kentucky hey brian welcome to the dave ramsey show how's it going um so my question is uh i have a hard time saving money my wife gets on my butt about not not uh saving but my problem is as i grew up not having a whole lot so when i get paid i'm like i want it i'm buying it i'm getting it now uh instead of thinking about anything else okay uh so i need to know how can i break myself for that habit and save for my family you know i'm how old are you i'm 43 but let can i give you one example sure i'm getting ready to do a job in spring hill tennessee next week at the gm plant i will be there for about three weeks and in that three weeks i will make about 11 500. good for you um and now you're growing up and you decided that you probably shouldn't spend it all on friday and then say thank god it's friday oh god it's monday right so but my big thing is like i'm short on time rachel i'm gonna make rachel jump in here what do you think well brian i mean i would i'm glad you're recognizing it so i would sit down with your wife you guys need to do a budget together and you need to start saving you need to save a thousand dollars you guys need to be working to get out of debt and then save three to six three to six months of expenses and it's literally the habit the habit of changing and you're always going to be a natural spender it's okay i'm a natural spender actually you're a natural spender but you have if i'm not why do you safe i yeah for me my motivation to save is so that i can do stuff yep so for some people about something better later and i bet your wife would say she saves for security she wants the level of security no we're gonna be okay i save so that i can do things so it's not like you can never do anything again brian you're just gonna save for it and make sure you have that cushion though of of an emergency fund i figured out i can spend more if i save and i can give more if i save and so i i don't save for savings sake i save for those other things and that's that's the way you can do it there's a purpose to it yeah that puts this hour the dave ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus [Music] so [Music] you

Channel: The Ramsey Show - Full Episodes

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Id: ReepTTKlSq4

Length: 125min 5sec (7505 seconds)

Published: Thu Dec 17 2020