It's Time to Take Control of Your Future!

[Music] welcome to the dave ramsey show [Music] 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 chris hogan ramsey personality number one best-selling author is my co-host today as we talk to you about your life and your money the phone number to do that is triple eight eight two five five two two five that's triple eight eight two five five two two five julie and dallas is gonna start this hour off hi julie how are you hi how are you great how can we help uh well thank you for taking my call um i just wanted to ask you about paying off debt before investing into retirement while being exempt from social security tax um can i give you a few facts and figures first sure okay so i'm a stay-at-home mom my husband's a youth minister with a salary of forty thousand eight hundred uh that increases by two percent each year and because he's a minister um we accepted the option of being exempt from paying into social security and instead invest on our own for retirement because we live rent free it's part of the package we have a personal tone um that value of the home 14 400 it has to be added into our income correct uh when we calculate the 15 self-employment tax um so our combined debt is a little over 123 000. why would you be paying self-employment well the 15.3 that would be going to social security we don't have to pay self-employment tax i know you don't um that's just the church um gives us half of that and we can invest that on our own insurance give you half of it you can do whatever you want to do with it yeah right right so okay so there's not a self-employment today we're not sure what to do yet yeah okay you just haven't you have the seven and a half or seven six five as income from the church additionally uh right because you opted out of social security okay i'm in yeah okay that doesn't mean you have to send it there no no we don't we've been saving what they give us and our house um until we figure out what to do with it so our combined debt is a little over 123 000 about 13 000 of that is a car loan and the rest is student loans goodness um yes expensive seminary degree yes yeah um so our loans are on income-based payment right now so all we're required to pay even though we do um try and pay more sometimes is 127 dollars a month so obviously not very much um and you don't work no i don't why hello i think we lost her well she didn't like that question might have been yeah might have been a glitch might have been a glitch in the system i don't know but but i mean in looking at this dave i mean forty thousand dollar income let's go ahead and answer her question yeah okay forty thousand dollar income um with the housing allowance but they're staring at thirteen thousand in a car loan and a hundred and ten thousand in student loan debt right you know that it's not time to be investing no it's time to start chopping yeah and i'm i'm thinking i'd think the path you were going and i was going to say it she needs to get plugged into some type of job or side gig to help chop this dead down he does too yeah yeah they're going to pick up extra income because the problem is a shovel hole ratio that's what you're saying that's right how much hole they're in there's a hundred and something thousand dollars versus a forty thousand dollar income so i gotta i gotta get the income up so that the debt is not a death sentence that's right it doesn't ride you all the way into the grave right and you've got to be able to attack it and so if you got your income up 20 grand you'd be done in five years yeah if you put all that on the on there and if you got your income up more you might be out faster so i i think you should be out of debt in three to five years a hundred percent debt free and uh then and only then would you build your emergency fund baby step three and then you do your then you start saving fifteen percent right is it wise for pastors to do this yes yes uh it's a conscientious objection the irs form says i have to object to the if you're a pastor your pastoral income only not your side gig income but only your pastoral income ministerial income if you conscientiously object to on a religious basis the social security system then you cannot pay into it and not receive from it now what does social security do for us well it's a horrible savings plan absolutely horrendous has a negative rate of return right you don't even get back what you put into it that's right so from an investment standpoint you could invest in a fruit jar and come off better okay but you need to do some investing so which is her fear right but we're still going to work the baby steps so they got plenty of time to get to investing and it also covers disability in the event you become disabled you get ssi and in the event of the death of one of the parents the child children you receive it would get benefits and none of that occurs if you opt out now uh then the question has always come up for our friends in the christian community uh because since we're believers and we're always in that community they're always asking well should we opt out um i said yes mathematically financially as long as you're going to buy disability insurance life insurance and do your retirement you're going to come out much better out of millions of dollars better off right i wish i could opt out right uh matter of fact they could keep everything i paid in so far if they just wouldn't take anymore that's how bad it is you know it's just bad it is bad math and so oh it's awful so if you had worked let's see dmv managing your retirement plan that's what social security is if he had worked a job for four or five years paid into social security then became a pastor and he opts out he would get social security based on what he paid in okay all right yeah but but not and if you work a side hustle you're still not ministerial you opt out except on the religious income okay ministerial income okay and i and i advise pastors to opt out as long as they're gonna do those three things that's a long-term disability life insurance and safety for retirement which by the way we're teaching them to do anyway that's right that's right this light year's better off now can i in good conscience be a conscientious objector uh on a religious basis if i'm in their shoes in an instant because the bible says to be a good manager to be a good steward to manage the assets that god has allowed you to manage well sending any of it to the government to mismanage does not qualify as being a good manager you're right so on a religious basis i instantaneously can object to it okay uh now i don't get to because i don't have a ministerial income right but uh but if you're a pastor out there that's the basis for it and and you have to do it right at the start of your uh pastoral career career okay and so it's one page it's a one-page thing and uh it's you know you're from a matter of integrity you are signing up not because you don't like the math but you're signing up to say well on a religious basis i object okay and i can do that i can show you how i mean i i as a christian i object right but i don't get to you don't get top down okay that's interesting and you don't either by the way right right mar is with us mars in cleveland ohio we're going to come back tomorrow after the break because uh we discussed that whole concept all the way into the break which is perfect because hey people wonder what this is oh yeah yeah and your parsonage is taxable income so that's why they're allocating a portion of it to that so still got to work the steps though still got to work the plan you're going to get out of it what you put into it only way it works this is the dave ramsey show [Music] [Music] cliff and i joined christian healthcare ministries because we really liked the concept of christians sharing each other's burdens and we really experienced that firsthand when cliff was diagnosed with heart disease it was just such a relief to know that financial burden was going to be taken care of chm is the original and longest serving health cost sharing ministry get started today and check us out at [Music] chministries.org [Music] [Applause] welcome back to the dave ramsey show common sense to your doc for your dollars and since chris hogan ramsey personality is my co-host open phones at triple eight eight two five five two two five chris hogan show is available on youtube apple google podcast siriusxm it's a podcast it's a youtube show it's everywhere and you can always listen to chris and um focus not finished baby that's just saying over there so uh be sure you jump in and check that out phone number again here triple eight eight two five five two two five as promised mar is in cleveland ohio hey mar how are you hi jane hi chris how you doing great man what's up hey so um my wife and i are on baby step 2 we have 15 000 left on our car so my question is after we get our emergency fund done our crush was paid off this year after we get our emergency fund done so we continue to pause on our baby steps and um not start my son's college fund and to scale up our house we owe a hundred and ten thousand um last year i made over uh ninety thousand gross income fifty eight thousand was brought home so i was thinking if i pay we were to pay two two grand a month uh extra to our principal which would be 24 000 a year uh our house can be paid off in three and a half years yeah uh what do you guys think about that well you when you finish baby step three and you've got your emergency fund in place and you're debt free then you move on to four five and six that's right and they're simultaneous that's exactly right and so mark you will have up to then done things one at a time but getting to that fully funded emergency fund doing four five and six you're going to be investing 15 percent saving time for college and paying extra to the house so if that means it's two instead of 2000 if that means it's 1700 that's okay then that's fine yeah but here's what you're not counting mar your income should be increasing so that in itself should give you the opportunity to pay off that house faster buddy uh how old are you i'm 31 and my wife is 29. and how old are your kids uh my son we only have one and he's three years old okay you sound focused man um and i'm gonna tell you this you will find the extra money to pay off that house i have no doubt in my mind but at the same time you're making progress in these other areas so don't don't don't not don't avoid doing one thing so you can focus all in another make progress in it all so i'm okay baby step five save for kids college we're okay if you're doing anything there i just want you to start building that muscle if you just set up an account to do 100 bucks a month 50 bucks a month whatever it doesn't have to be a lot but let's get started on it to kind of get the rhythm in your brain and in your household and your spirit that we're saving for college we're saving for college we're saving for college and then we're just everything else we're gonna start dumping on six we're gonna get the house paid off as quickly as we can now you said you brought home 58 out of 90. where's all that money going that's you're not taxes i brought her 68. oh 68. okay that's much better that's much closer all right good well you're doing i agree with chris i think you're doing great i do too i really do and i think you know being laser focused on that but dave people oftentimes don't account for either income increasing or finding other ways to bring in extra money you can still make progress well what ends up happening for real is you do get raises periodically you get bonuses and then other money is just found money comes across our our life it always does in our lives i mean you might get a little small inheritance a little five thousand dollar inheritance or something you might get a uh a twenty thousand dollar or something uh you may find something you may find a gold rock in your backyard and sell it i don't know i mean there's little stuff happens and as long as all the little stuff above 15 going to retirement above whatever you're doing for colleges all going on six then you accelerate the process and i would rather you do four and five and paying off your home take four years or four and a half years instead of three and a half years and not be doing any four and five gotcha yeah yeah yeah and that that's that's the clarification he's looking for good job man well done stella is in dallas hey stella how are you just fine thank you thanks for uh um taking my call today sure what's up i'm on baby step baby step number seven i'm single 45 years old i maximize my 401k and roth ira contributions annually great um when should i make a conversion from my 401k or to raw 41k how old are you focus on my savings 47 i'm 45 now yes sir now when you when you uh when you fl how much is in your 401k today uh about 840 000. oh way to go millionaire stella stella's on the ball all right now wait a minute i got to back up then because you're going to create taxes on whatever you roll right do you have other cases do you have other i know but do you have other cash i do how much i have about a hundred thousand on my um savings account okay so i don't want to flip it all and you have to use some of that money cashing it out early to pay taxes and that's what would happen because you're gonna have a couple hundred thousand in taxes so i'm gonna move i'm gonna move as much as i can pay the taxes without touching it so let's call that 400 grand and you use the hundred grand to pay your taxes or whatever it works out right something like that tax bracket is about 32 this last year okay then then you can back into it and say based on that i've got and you got 100 but you have an emergency fund in addition to that hundred no okay so i have some non-retirement investment accounts that i could liquidate oh how much is that uh about eight hundred thousand okay then let's do it all now and let's use some of your cash and some of your non-retirement investments to pay the taxes because effectively what that does mathematically is that is as if you have just invested another 250 000 into your roth ira yep because the roth's going to grow 100 tax-free from here on out see so you freed all of that up now i'm assuming since you're such a freaking rock star here that that this money is invested in good mutual funds and you're getting good rates of return right yes sir you are you're killing us what do you make thank you how much do you make oh i'm sorry uh about 200 000 how did you learn how to do all this you are really good i am i'm focused but not finished stella you just making me feel good today i'm telling you he just turned into one big gooseberry seriously i really did i i i no but seriously where did you learn did you did your parents teach you are you self-taught um pretty much self-taught yesterday are you really well you have done a wonderful wonderful job you really have 45 years old 2 million yeah and this 100 000 you have in your savings stella leave 30 in there is your emergency fund yeah uh just so you keep that cushion but girl i'm proud of you i'm going to tell you and you know what that high definition dream you've been chasing i hope you're living i hope you're having fun uh knowing that you're on the path to be a blessing to people and giving but also living and enjoying some stuff way to go yes well done well done rockstar trevor's in cleveland ohio hey trevor how are you good dave chris thank you guys for taking my call sure how can we help yeah dave i've got a business started here and uh my lease payment is coming up on my truck for my landscaping business and i was really honestly not sure where i want to go this summer when the leaking payment comes up whether i want to just buy the truck outright and keep it with my business or maybe try and find something else and i'm kind of in a predicament there um so i can see if you can kind of help me out with that just pretend like you didn't own it would you buy it yes okay and would you buy it for that price um not knowing what the price is is kind of well there's a stated price on a closed end lease at the end of the lease that you can buy it for right yeah i would i would probably end up buying it but i also have the alternative of maybe going and getting something cheaper i know and i'm really not sure i'm on about baby step number three um so what is the truck the trick is what's the buyout number and then look the truck up and see what the truck is worth don't pay more for it than it's worth just because you're leasing it but if you can buy two thousand dollars under what it's worth and you can pay cash for it then let's go ahead and buy it if it fits in your plan and if you want to move cheaper then just turn it back in give them the keys go just don't go higher yeah there's no reason to go up and don't do another lease for god's sake yeah you've earned your way out of this thing so quit it stop that fleeces are fleeces are a bad idea this is the dave ramsey chef [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] [Music] chris hogan ramsey personality is my co-host today open phones at triple eight eight two five five two two five julia is in gaithersburg maryland hi julia how are you hi how are you thank you so much for taking my call sure what's up so i'm an 18 year old i'm especially i'm a first year college student i have a 14 000 car loan i only got it because i needed i needed it for schools i got it right before the pandemic hit and for work as well um i'm able to pay for it so um the loan is um me and my mom co-signed it so it's just but i pay for it um but my question is i just finished baby step number one which is you know save up that one thousand dollars um i'm trying to get out of baby step number two which is pay off all my debt which as of right now is just my car loan but my main question is um my mom is in a lot of debt as well how can i help her get out of her debt but not only help her get out of debt but how can i help her listen to your steps and um so that we can become financially free together you know work together well i love your heart i tell you i love your heart i really do and you know unfortunately what she's done is she shared her taste of debt with you and you know i'm gonna tell you you know one of the strongest things you could do julia would be to get intentional and look at getting this car sold and get it out of your life and then you saving up and paying cash for a car and talking to your mom about how you know that that's not helping and i think you living it is one of going to be one of the best ways um but you know i mean you can talk with her and you can plant try to plant the seed but you can't you can't make her and dave and i have found this out after many many years of until someone decides they're ready they're not ready yeah and so yeah you living it in front of her and you've got the powdered butt syndrome once someone's powdered your butt they don't care about what your opinion is about about money sex stuff like that so mom doesn't you know she's not gonna listen to you that much i mean you can just the only thing you can always do with anybody is not to wag your finger at them and say you know you need to listen this podcast because you're stupid with money because you're you you could do better mom you could do and don't wag your finger that way instead just talk about yourself because your story is not debatable you know i feel so much better now that i'm on a plan i got a budget i feel so much better now that i'm getting this car paid off or getting rid of this car i feel so much better uh now that and man if i could ever help you i mean you just if you let me share with you what i'm doing that's fine and so um you ever had a friend uh julia lost a bunch of weight yeah yes they have yeah they inspire you don't they right without without coming over to you and saying you know you need to do you need to take better care of yourself they they just they just take better care of themselves right in front of you yeah and then you go well how'd you do that that's right what'd you do you know i've had a lot of those discussions i've lost 37 pounds since the pandemic and so i needed to because i was just straight up fat and so uh but everybody's all my buddies are like what you do you know it's the same thing and i i didn't go around and say you know you need to be doing this and didn't look at my buddy and go hey you got one of those things hanging on the front of you like i do so i didn't do that i didn't didn't shame anybody else right i just said you know that belly there is you know i didn't i didn't talk about his belly i didn't i didn't pick on him you know but i just you know my stuff my clothes just fit again you know kind of stuff well and you're right dave her doing it herself and i'm going to tell you at 18 years old imagine pressure for her to have the presence of mind to reach out to call in is a big deal i wasn't thinking like that at 18 years old and so you know julia live the principles young lady live them and be intentional for yourself and please please please don't take on student loan debt you said you got that car loan i want you to sell that get that out of your life go to school part-time if you have to while you work but avoid student loan debt don't add it to your plate yeah well done michael is with us michael's in alexandria virginia hey michael how are you good how are you doing guys uh so my wife and i are planning on paying off our house in about a year great looking you know i'm looking ahead and i'm wondering after we do that and uh we put the 15 into retirement what i'm looking to do is what should we do with the additional money we'll have to invest would you suggest maxing out all retirement avenues possible prior to like a regular brokerage what would you use a brokerage account for i'm thinking more of just like um low-cost index funds that um you know have a little more accessibility okay i mean you can do that but if you get with a smart investor pro they can help you lay that out but yeah you max out all the retirement all of it all of it and then if you want to just open some uh i do that i've got some s p 500 funds that are no loads and i store up money in that until i get ready to buy something else with it usually a piece of real estate is what i'll use it for because it's the two things i invest in and uh but that's the beauty of it the other thing you'll find is if you've got that sitting there and you said it's accessible that's a good word liquid then if something comes along and you you you feel prompted by god to be really generous to something and and you know you may write some sizable checks out of that investment account just to be a blessing at some point too that's the other thing we have used ours for absolutely and michael i tell you i'm going to uh uh to get your info i'm gonna send you my book everyday millionaires uh kelly will get your information and send that to you because also in that book i talk about uh the bridge account and so this is where you would start to using gross stock mutual funds outside of retirement to allow you to kind of continue to save as well yeah and you got what you're doing is building up money that you can utilize before 59 and a half that's exactly right you're bridging from where you are now until 59 and a half because you can't touch the retirement stuff without penalties prior to that so that's a that's a good suggestion kent is with us in kansas city hey kent welcome to the dave ramsey show hi dave if i could provide you with some dollar figures could you help me estimate the value of my small business i'm about ready to sell i'll give it a shot it's a small service business i'm the boss i'm the only employee i drive around and distribute printed materials like magazines brochures and i put on about 23 000 to 24 000 a year so gas expenses are my main expense the average i started it in 2013 and so the average total amount of income uh about the past seven years is about 41 000 so it's a low of about 38 500 to a high of about 49 500. now that's the gross revenue that's not before expenses that's that is before expenses not after yeah that's that's the gross product revenue not not with it now when i figure it with the tax stuff uh is is different from what all the deductions and they have depreciation and they take off for my home office use and produce my garage as a business purpose and stuff like that but so then what i figure for my you know gas expenses and and stuff like that is a little bit different but do you need to have what the at total average yeah what was your taxable income um that averaged um past six seven years about eighteen thousand yeah i was going to say 20. i was going to be my guest okay cool well here here's the thing some of those categories are what we call ghost categories for purposes of valuation and some of our real expenses that the tax uh thing is just allowing you to admit now your home office is a ghost expense because you're you know you you're not really uh you don't own that as an office it's just you're taking the appreciation on that which is going to cause a problem when you sell the house by the way but um anyway the uh so some of those things are real expenses and some of them aren't all of them are not ghost expenses so it sounds like you have an income of around thirty thousand dollars uh and so there's two ways to look at this number one most of the time on a service business we say all right the do you have a series of clients is it a client list yeah the the customer base uh that's what generates i mean that's the value that's where the value is yeah okay that's what i thought so i think you could probably sell that for about one time your uh roughly one time if you could sell it for fifty thousand dollars i'd take it because generally speaking a um you know someone else can just go generate their own customers and that sure that's your what you're competing with but generally speaking you take a the net profit of a business times four but that would be after you paid all the employees and we've not paid you out of this yet to do the work by the time we pay you there's not going to be money left so i'm probably just going to try to sell the list as a value rather than the business as a value [Music] [Applause] [Music] [Music] guys we're working on a new podcast a special and we're looking for some stories from you if you've had a bad experience with this buy now pay later promises flexible payment options you've probably seen these options when you're buying something online like a new pair of jeans you reach the checkout page and you can buy them for three dollars a month that kind of stuff if you got caught in an installment payment program ended up costing you way more than you expected for the item we want to hear from you buy now pay later email us if you've got some stories your story could help a lot of people email us at dave on air at ramseysolutions.com put in the subject line buy now pay later dave on air at ramseysolutions.com buy now pay later tell us a little bit about your story and our team we'll get back with you as we're producing that new podcast open phones at triple eight eight two five five two five scott is in washington d.c hey scott welcome to the dave ramsey show hey dave thanks uh thanks for having me my wife and i are avid listeners and thanks for your advice thanks how can we help um yeah so we're 29 we're debt-free and done with baby step four but no babies yet um and no house yet either we've got a healthy emergency fund um over 12 months of expenses right now we're maxing out both of our 401ks at 19.5 a year but we're over the limit for roth ira and over the tax advantage salary limit for traditional so i was planning on um now that we have a you know time horizon of about three to five years on both kids and a house uh planning on dumping about two thousand per month in the mutual fund for the next yeah three-ish years um do you think that's a good plan or should i park that money elsewhere that'd be fine i mean if you dump it into just a no-load again like we're talking saying a minute ago a no-load s p 500 now you can do a back-door roth yep i do one and my income is more you know way over the limit um in the back door roth my fact i just finished mine the other day is you open an after tax traditional not a before tax traditional and instantaneously roll it to a roth and that's a loophole in the law that allows you to do that and regardless of your income you can do a roth so you can pop uh you know six thousand bucks a piece you and your wife into that if you want to in addition to maxing out your 401k at the full which you're doing uh and then above that you're just saving towards the house it sounds like right right yeah and so you're a little thick on your emergency fund too i wouldn't be at 12 months okay yeah so scott one option you could do is you could take six months of that emergency fund and lump that over and let's call leave it in the emergency fund but let's call that home down payment okay that's the starter for the starter for that anyway and if you don't have the money to fund those two backdoor roth rights use some of that yeah for that as well right yeah just get in touch with the smartvestor pro tell them backdoor roth ira they can tell you how to do it but the limits on roth ira folks are 200 000 household income if you make over that you technically do not qualify but there's a workaround and that's what i just said and it's perfectly moral perfectly legal so um again i've done one every year for gosh as long as there's been roth iras so just to get more money in there it's not it's not gonna that one thing is not gonna make you wealthy but uh if you keep doing a whole lot of those one things you'll end up with more than one thing that's right every little bit counts and seriously go to daveramsey.com you can reach out to a smart investor pro where you can sit down you don't have to try to explain that to your spouse right just set up the appointment go sit down with a smart vester pro with your spouse with your spouse yes both of you even if you got to do it on zoom doesn't matter these guys and gals are fantastic they'll be able to explain it lay it out for you and you can feel confident in what you're doing there you go jeff is with us jeff's in knoxville hi jeff welcome to the dave ramsey show hey dave hey chris appreciate all you guys do sure you too what's up well i got a question you're always giving recommendations for purchasing a house uh but i own land outright we're debt-free we're saving up to to build a house good uh so i was wondering what's your recommendation do i need to save up the complete 20 to the cost of the build or is it okay to actually use the land as my 20 collateral for the build well we're not hardcore on a first home or on the 20 the biggest thing about the 20 down is it avoids pmi you don't pay the private mortgage insurance which is like 75 bucks a month per 100 000 and so it's it's a lot of money for pmi and if you can put the 20 down that's very helpful and yes in the calculation for your permanent mortgage the land is part of the valuation and so if if you are in the property by the time you get it built with the paid for land plus the build if the total loan to value ratio is 80 or below you've avoided pmi with a conventional mortgage and a fannie mae which is the only kind you'd want to do the other the fha and va are more expensive and don't do those but you can avoid the pmi if you do that and then as far as the other percentage we use this still applies when you end up with a permanent mortgage you don't want it to be more than a fourth of your income that's right yeah 15-year fixed 15-year fix and so you know jeff here's the deal buddy you're just going to have to go into it you got to plan for and dave i'm going to hear this because you've built more times than me but you got to plan for overruns you know like the construction uh you're the the cost things i mean it's just it's going to always cost a little bit more than you plan on and so having that regularly scheduled meeting with your builder staying on top of it it's it becomes a full-time job well it's it's a job for sure i don't i mean i've you're right and we have learned building houses um you are a nightmare to your builder if you make it up as you go 40 000 change orders right yes and so the lady a country music star not to be named was living across the street from me in the house i currently live in we were both building at the same time and she paid almost double by the time she finished for the same square footage as i've got but i had two change orders and she had 240. and they mark every change order up and every every change order means something has to be changed it's already done so that means you've done the work twice right so the first thing you do is you build you build it on paper over and over and over again that's called a blueprint and you spend a lot of time going over it and going over it and going over the blueprint getting everything just right and and you know to the point that you're just it's like a budget you're promising yourself you're going to stick to that piece of paper because everything you change on it as it goes up is going to be expensive so it's a lot cheaper to build it on paper okay and then you lay out a schedule with the builder and i don't mean a completion date i mean a when the foundation is going to be poured when the things are going you know when the framing package is going in when the kitchen cabinets are going to be installed i want to see dates okay and then we can tell if we're on schedule or not that's right if we have a rain delay some wet weather in the winter in some of your areas and you know you can tell we're off by two weeks that we're building a 200 000 square foot 40 million dollar building next door it's exactly the same thing we've done line item on the uh the blueprints are unbelievably detailed as you might imagine and the schedule is unbelievably detailed and we can tell if we're one day off schedule on that project 40 million dollar project and you do that with the house too and so you have a budget you have a schedule and you have a blueprint and the budget is line itemed as well all right you go there's so much we've got set out for kitchen cabinets and if you pick kitchen cabinets two thousand dollars over that expect that to be two thousand dollars more because you just changed the game that's right you know as to what you versus what you started with and so it's a project with a lot of details right and if you'll manage to the budget to the schedule into the blueprint that's how you manage the project and you'll have a good experience and your builder will actually like you um but because people just make up crap as they go along and then get mad at the building yeah well you took it six months longer to build it you changed 46 things right you couldn't you didn't go down and pick out your light fixtures till four weeks after you were supposed to and then they didn't come in right you know and so the the person the customer is the problem most of the time or sometimes a builder's just building something out of his ear you know he's everything's on the hood of the truck and he ain't got any dead gum plans you know it's not it's just horrible and so you've got to not be jack leg as a customer or as a builder right but if you'll get a professional contractor that knows your stuff and puts out those three pieces of paper you spend a lot of time on those before you break ground you'll have an enjoyable building a house is fun then cause you get to you get the creation i mean we're having fun building this big old building next door it's fun right there's lots of tractors and trucks and stuff over there boys i like it man it's fun lots of things over there making noise it's a blast there you go people you just got info on how to build a house the dave ramsey way it's just managing a project this is the dave ramsey show [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 dad 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 chris hogan ramsey personality and number one best-selling author 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 tom is with us to start us off in grand rapids michigan hey tom welcome to the dave ramsey show hey dave hey chris thanks for checking my call sure what's up hey so uh my wife and i are about to close on our second home um we're about 25 i'm 25 she's 26. we have enough between cash and investments to pay for the whole home in cash the problem is a lot of it is in investments and a lot of it about half of it was put in around april and so we're looking at paying potentially short-term or long-term capital gains in a couple months if we were to take it out and we're kind of just like it's gotten to a large number and the amount of money that you know i could be potentially making year over year just you know and study growth being in good mutual funds i'm worried about taking that large amount of money out um and not just continuing to let it grow and especially since the mortgage rate is so low but tom how much money were you talking about you're saying a large amount give us give us some specifics yeah so i got about 160 000 in cash and i have about 430 000 investments and what's the basis on that 430 uh what do you mean what'd you pay for it uh so i have about 245 000 in actual cash that was put in no no that's what you put in to make 400 yeah so you got 200 000 gain in in nine nine months yep okay all right and so yeah you're gonna pay ordinary income on that so that's gonna be pretty heavy pretty hefty all right so that that's question one um and then the overarching question is uh do i pay six hundred thousand dollars for a house and pay cash because mortgage rates are low yeah i mean it's it's 535 000 is the home cost um and so uh you know i i my thought is is we're both maxing out our 401ks uh we make just a little over 200 000 a year and you know we could just divert you know roughly 60 000 a year for the next six years or so or you know after the 20 down six seven years and just do it that way rather than you know emptying all of our investments and stuff and you know paying cash it's the only debt we would have right let's let's let's pan back just a little bit because there's two or three different answers uh and it's it's the nuances of it okay number one where do we want to end up 10 years from now let's pound back that far a hundred percent of the time all of the data that we find i mean is it a hundred percent of the time you're going to want to be debt-free all right 10 years from today okay or seven years from today or as you said six years from today all right so the long-term goal is debt-free now why is that well it adds stabilization to your overall life and and that you own your home there's no threats when there's a pandemic that something turns upside down on your wonderful careers that you have and all of a sudden this house is in jeopardy and everything's in jeopardy and there's a lot of stress so if you're the third pig that built his house on the brick with the big bad wolf comes along and the brick is paid for you got no issue that's right so that's where we want to end up and we know from all our data that the millionaires want to do that and we know the borrower really is slave to the lender that's not a dad gum joke and so that's where we want to end up so in light of that i figured out i don't borrow money ever for anything and so i would be looking at a delayed closing on this to get me past the capital gains date so i wouldn't close on this property until april and i'd actually pay them a little extra to do that if it's me because i'm going to pay 100 cash 100 of the time now the one thing we don't yell at people for is taking out a mortgage if they can pay it off rather quickly uh or as quickly as possible and so we wouldn't yell at you if you took out a short-term bank loan and paid it off within a year to avoid the to make that a long-term capital gain instead of an ordinary gain which is going to cut your tax bill in half that's a 30 or a 40 000 play in this scenario right tax savings only now am i going to keep you in debt on your house because of low mortgage rates in order to invest more absolutely not as a philosophy absolutely not so that's not where i want you to be long-term it's not where i want you to be as soon as you can get there so there's two or three things playing in this but the capital gains thing and the april the april date and again you know you take a ordinary income on a 200 000 gain or 250 000 gain versus a 15 uh which is what you'd be on your long term capital after one year yeah i'm probably going to want you to mess with that i can't because i have vowed before god i will never borrow money again for any reason because i truly believe the teach stuff we teach so in if i were in your shoes and i'm sweating that capital gain i'm gonna just do a delayed closing in order to avoid it and get it past that one year mark and come out of there but tom you know you're really kind of asking two questions the the capital gains thing and the gains that you've had this year right have made you a little greedy because you had an unrealistically good year on the stock market it is unrealistic it was a wonderful year oh well especially when you bought at the bottom that's right absolutely right at the bottom and tom i'm going to tell you this 25 and 26 years old calling in with this kind of question and the path you all are on you've got the habit of saving you've got the habit of being intentional please please please continue to grow that skill uh do not backslide and i know that because having been 25 and 26 stupid comes around and it's shiny and it's real easy if you're not clear on what it is you want to make some bad decisions so very proud of the progress you're making take your time look at this and it's okay to delay some gratification because it's going to feel a whole lot better later when you walk in that home and it's all yours yeah the number of times i couldn't do something because i didn't have the money right then and so because i refuse to borrow money because i truly believe the borrower's slave of the lender i really am a legalist i really am a fanatic i really don't borrow money for anything but the number of times i couldn't do something so i didn't because i couldn't figure out a way to do it i couldn't scheme it i couldn't scam it i end up with a better deal like let's say he said okay i can't do this if i'm not going to do a delayed closing because i'm unwilling to pay the capital gains and i'm unwilling to borrow money right okay and so we're gonna and and then the the seller says no i won't do it late closing you lose the deal yeah you know what you end up with better house later every time you get an upgrade wow god's always standing there with an upgrade the other side of you making the right decision and that's not what our mind tells us no no it's our mind we have a shortage a scarcity mentality that if you don't do this you're never ever going to be able to do it the number of times i've walked away with a deal and when i walk around the corner there's a better one waiting because i walked away from the deal for the right reasons wow there's thinking about sticking to the principles i'm gonna dance with the girl that brought me that's right i mean this debt-free thing it brought me here it's real this you know investing thing it brought me here this outrageous generosity thing it brought me here and i'm not going i'm not gonna i don't care if there's another pretty girl to party those are the ones that i came with that's the girl i came with you know i'm dancing with her that's it this is the dave ramsey show [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] what makes our show unique is that we genuinely care about our listeners we're intentional about choosing the best advertisers to recommend blinds.com is no exception they offer high quality window treatments at unbelievable prices and they make it simple to shop blinds shades and interior shutters with easy online ordering free shipping and a guaranteed perfect fit go to blinds.com and take advantage of this week's special savings [Music] [Music] [Applause] [Music] chris hogan ramsey personality number one best-selling author is my co-host today our question today comes from blinds.com they have a 100 satisfaction guarantee means that even if you mismeasure you pick the wrong color they will remake your window blinds for free you get free samples free shipping and with the new promos they run every month you'll save even more use the promo code ramsey to get the best possible deal all right dave today's question comes from crosby in idaho he says why do you recommend only 15 of your household income to be invested if i can do more should i ah so looking at this crosby i would take a stab at this dave you you get 15 what you want to do is to get started and allow compound interest to start moving for you however you're still going to be doing some other things for example we invested baby step 4 15 you're still going to be saving for college and you're going to be attacking to pac attack and pay off the house now crosby once you attack and pay off the house you definitely can invest more than 15 percent because you freed up that income that payment from going to the mortgage yeah it only applies until the home is paid for that's right and once your home is paid off then you're you've got a lot more cash flow and you can do other stuff wide open spaces so obviously you could do 12 and put more towards the mortgage you could do 17 and put less towards the mortgage so why 15 is it magical no right it's not magical it's not a magic number but we did when we were designing the baby steps we learned the baby steps from working with people over the years we finally said we first used to tell people to stop doing everything get out of debt then we developed people kept having you know the tire would blow out the alternator go out on their car a kid who gets sickness 200 at the pediatrician and they have any money because they paid it all on the debt right so then baby step one was born so before you get out of debt have a thousand dollars so you got a little starter cushion so i was born these steps evolved right we didn't just make them up in a room right they evolved in 30 years of coaching and counseling people so once we got out of debt and got the emergency fund in place then we said okay what what number in the budget with the average household income is 59 000 in america but if you're making 32 000 the number still works and if you're making a 232 000 the number still works what percentage allows you to have money left beyond that percentage that's a big healthy percentage right but beyond that you'd have money left for college savings and beyond that money left to begin to pay off your home earlier and uh we played with 10 percent 12 percent 17 um because we have people that are super savers and they would put 28 in right and then we have people that go i only want to put three percent in because i want to pay off my house right and we knew neither one of those were right because you need to have a good healthy amount going in but not so much that you don't have any left to flow over the edge of the cup over into the other two baby steps and so we ran uh case study scenarios off of real people that we had met with you know all these tens of thousands now today hundreds of thousands of budgets that we have done at ramsey and the 15 just works it works at almost any number now again this is not out of the bible right and so it's not an absolute you can decide to do whatever you want to do if you want to do 17 do it i wouldn't recommend it this comes from real experience we didn't just make these numbers up there this wasn't in a think tank somewhere right that some stupid bro college professor came up with you know and you know got tenure and no money you know you don't want people with no money teaching you about money here's the the magic of it is obviously most everyone has picked up on your percentage that you've devised because it does allow people to continue to take care of life but at the same time get compound growth started in your favor and the same thing when we talk about buying a car you don't have cars that are more than half your annual income you pay cash because you have too much invested in going down in value right and same thing we talk about no more than a fourth of your take-home pay on a 15-year fixed on your mortgage you don't want to be in debt long term so no more than 15 years and if you have more than 25 percent go of your take-home pay going into your mortgage you're gonna have trouble saving to buy and pay cash for the next car you're gonna have trouble paying cash for your vacations you're gonna have trouble doing your 15 percent into your retirement and kids college and been paying the house off even earlier right so you become house poor you can become investment poor yes you can cash wise and you can become house poor cash wise you can become car poor cash wise and these are the things that kick people in the kneecap while they're trying to get ahead right well and i remember when i first started working the plan and i was like thousand dollars that's not that's not enough well it's not enough and then i realized i was like ah wait a minute no no no this is going to break the habit of me thinking that that's an option and it's going to give me a little bit of cushion yeah you know and it was one of those things where you go ah because if you won't do that one if you won't do the thousand you ain't no way in the world you're going to do babysitting you'll submit yourself to a plan you're not going to submit yourself to a plan that's right you know what was happening chris and this is in the early days of financial peace university before there was baby steps i mean i was i was teaching this stuff and i'm teaching it in class and we're sitting in the having small groups and what would happen is that somebody would have that was really earnest they really had had an i've had it moment they really were ready to change they really wanted to get out of debt and they're really game on and they're you know they're they're charging the gates of hell with a water pistol here we go baby let's get going you know game on let's bust this thing braveheart this thing right let's go and they go down there about three months and they're busting into this thing and their emotional energy is starting to run a little bit low but they are making progress and then that alternator would go out or that that you know tires you know brakes go out on the car or something a kid gets sick some little thing and you know it really didn't ruin their plan the fact that they pulled out an old credit card and went and bought tires but it ruined the psychology for them because they felt dirty they felt like a drunk that had gone and got somebody that was an alcoholic that had been dry for 90 days and then went got drunk right they felt dirty and so they'd quit so the thousand dollars isn't about you and about never using a credit card again it's about the feeling that you you went back to the old ways you know the the proverbs talks about a dog returning to its vomit you know it's how it feels you wake up and you go man and you just feel like you feel like a dog you feel awful because you failed and you really didn't right it's 200 on a credit card guy's got 42 000 on his credit cards right but dollars didn't really keep him from winning that's right but the fact that he fell off the wagon did and the thousand that's all the thousand dollars is for hmm it has nothing to do with the actual math right right it's to keep you from feeling like you're not working the plan right gotcha like you failed and that's what's worked yeah and that's why that's why it's so important and so you know you see these stupid but people posting stuff about us on the internet and man there's everything in the world out there people just make up stuff i mean tom cruise had sex with an alien you know i'm sure we interviewed the alien you know i mean they just make up crap and so but but they you know dave ramsey doesn't understand he you know he's out of touch with the times a thousand dollars well thousand dollars wasn't enough when we started either tuber right it was never enough it was never intended to be enough and and you know and and you know some financial planner dave ramsey thinks a thousand dollars is an emergency fund no he doesn't you that's right i tell you what i think an emergency fund is three to six months of expenses the same thing that's been taught in the financial planning community for 50 freaking years right you know it's the same exact thing the rainy day fund grandma's rainy faint day fund the gok fund the god only knows fun it's always been the same i didn't make any of this up the only thing about the thousand dollars is to keep your emotions intact and you don't feel dirty like you didn't work the plan when some little dinky butt little emergency comes along now you have a ten thousand dollar emergency you got another issue that's right while you're in baby step one right yeah you do you got a different thing going on then but most people don't have a ten thousand dollar emergency but about once every 10 years 78 of americans will face a 10 000 emergency fund once a decade now the trick is are you going to be ready when that comes when it happens and you will be if you work these baby steps in order that's right but during the time you're in baby step two the number of times that that big emergency comes along at exactly the wrong time it's fairly really rare it doesn't happen often well it's more about worrying about the unknown yeah that's so good to hear the the the rationale behind that i'm glad we talked about that that's good and listen if you're out there and you fell off the wagon get back up on that thing this is 2021 you still got time just gotten started let's do it this is the dave ramsey show [Music] [Music] [Music] what makes our show unique is that we genuinely care about our listeners we're intentional about choosing the best advertisers to recommend blinds.com is no exception they offer high quality window treatments at unbelievable prices and they make it simple to shop blinds shades and interior shutters with easy online ordering free shipping and a guaranteed perfect fit go to blinds.com and take advantage of this week's special savings [Music] um [Music] chris hogan ramsey personality is my co-host today tyler and shawna are with us in boston mass see it says on my screen you guys are debt free congratulations we are thank you way to go how much did you pay off we have paid off 343 993 in 36 months wow and your range of income during that time so we started around 150 000 and then uh when we finally paid everything off we were up to 240. what do you guys do for a living i'm a nurse but i'm currently staying home with our three kids and and i'm in sales sounds like it [Laughter] yes yeah you guys are taking care of business so tell me what stuff did you pay off so we had quite a bit of student loan debt about 245 000. uh yeah yeah our cars uh credit cards and then a 401k loan okay so you did over a hundred thousand dollars average a year for three years you've been on beans and rice or you sold some stuff or you had some savings you threw it definitely we definitely sold some stuff i'll let tyler tell you about that yeah we sold a couple things we actually lived in a three family and rented out the other two units as part of this and did a condo conversion and sold them all individually so that put a good amount of money in the bank and you might see pictures of our cars on the screen uh one of them is a very excited car a picture of us leasing a new car we paid all those off and then decided we wanted to dollars in the bank uh you cut out you said you paid one of them off and last i heard you were leasing a car so i'm confused well we we paid off a lease car so we had two cars that we financed one was leased and we paid them both off and just decided we didn't need that much car so we actually we traded down to a smaller car and put sixteen thousand dollars towards our debt oh wow i actually yeah i actually totaled that car three months later and you you hear people call in and use it as an excuse to buy more car we actually traded down tried it down again are you guys there yes we went down again okay you're breaking up pretty bad okay good congratulations so what's the key to getting out of debt you did an incredible job yeah i think the key to getting out of debt is really having a big why uh you know for us we accepted jesus christ as our lord and savior as we started this process and decided we had a tithe and and we just realized we were managing our money poorly and needed to change something so i think that was one of the big reasons that we decided we needed to make a change and to just show our kids that you could do things differently that living debt-free was normal yeah absolutely shanna what was the biggest sacrifice for you um i would say just i guess learning to say you know know all around whether it be you know going out shopping or going out to eat just learning that word no that wasn't a word really in our vocabulary and we quickly had to learn what it meant what you said you guys accepted the lord right about the time you started all this tell us the story what happened here yeah about three months probably before we started our debt-free journey we both found the lord and accepted him and decided we had to tithe and we just looked at our budget and realized we were going to be living on 90 less than we had been before the numbers didn't work and we weren't sure how we were going to do that but we just made the commitment to do it anyway and uh you know the the lord's really blessed our 90 percent more than our 100 percent ever ever worked for us in the past yeah and so a couple months later you found financial peace university did you say yeah somebody at our church was promoting it on the stage peter and alicia martino we uh we actually couldn't take it at the time and we kind of did dave ish for probably 16 months before we finally did fpu on our own online uh we're actually going to be leading our first fpu course in a few weeks so we're pretty excited about that wow thank you yeah that is fantastic good for you guys we're excited to just share what we've learned and just you know the excitement that we felt and the freedom that we've found i mean we want everybody to experience that well i'm going to tell you you guys calling in and sharing your story you have no idea how you're motivating other people to start to believe that they can too and so i'm proud of you guys and i'm very honored that you're going to go back and pay it forward uh leading a class and helping other people find their way as well so job well done amen well done you guys so this was a pretty intense three years yeah yeah it actually went by faster than it felt it was going at times you know when you got when you got done was it worth it absolutely will you ever go back in yeah no way no not a chance no yeah you live like no one else so later you can live and give like no one else i mean you make 240 000 a year you don't have any payments but a house payment uh yeah that's pretty rowdy yeah exactly yeah we can go do some stuff yeah that's why we did it we got a copy of uh chris's book everyday millionaires for you guys because you're going to be one soon that's the next chapter in your story keep working keep working keep being intentional and slow down on the intensity a little bit but now the intentionality kicks in so well done you two we're proud of you thank you for leading financial peace university and ramsey plus we appreciate that tyler and shauna and boston mass 344 thousand dollars paid off in 36 months making 150 to 240 count it down let's hear a debt-free scream three two one it's so good is a lot of money a whole lot i mean dave that's all 245 000 in student loan yeah that's that's a lot of money that's a whole lot folks what if you didn't have any payments what if you didn't have a credit card or medical bills or student loans or no car payments after 2020 most of america feels the same way you do right now stressed out of control but 2021 can be your year time for you to take control the best way to do that's the ramsey plus money reset it's our challenge for anyone who starts ramsey plus this year how much progress can you make on your money if you go all in for 90 days all into paying off your debt as fast as you can and then finally saving for emergencies as fast as you can with ramsey plus we're going to show you every day what to do every week what to do the small wins with your money and even some really big ones and then we're going to help you turn those wins into lifelong habits it is never too late to get a great start this year decide to reset your money go all in for 90 days take control you can do a free trial at ramsey plus if you want to it's includes financial peace university it includes the every dollar premium app it includes all kinds of tools and other courses and classes it's everything you need to know about money in one place daveramsey.com reset do the free trial daveramsey.com reset yeah no that's important dave and i've been listening i've been watching people you know i've been i've been you know doing a little cardio and doing some stuff getting getting myself in better shape but they i was reading on it it was talking about you need a system you need a system and a process to be able to follow in order to get healthier and do all the things i thought that's exactly what ramsay plus is it's the system it's the thing you plug into and do the things that are there well one of the best phrases i've ever heard was craig rochelle the other night and we did research last tuesday night and uh a week ago today in oklahoma city that went fast and um you know he he said quit trying start training yeah yeah training is you're gonna make mistakes when you're training and it's never perfect it's never a straight line from where you are to being wherever you wanna be but you when you're in training you don't eat that when you're in training you don't buy that that's right you don't have training i can't do that i'm in training that's right i can't do that i'm in training and all you just keep saying that that's a really powerful little phrase right there it really is i'm trying to get out of that nope i'm in training i can't i can't i can't i can't do that amazon prime nope nope i can't click that nope nope that big old pop-up ad that comes looking at you they get up we need to get like a nope button we do you and i both when you push it it's hope when it's chris's voice no no that's what we're gonna tell people this is the dave ramsey [Music] [Applause] [Music] [Applause] [Music] [Music] [Music] so [Music] chris hogan ramsey personality is my co-host today this is the dave ramsey show open phones at triple eight eight two five five two two five caesar is with us in fort myers florida hey cesar how are you i'm doing great dave how are you better than i deserve what's up oh thank you so much for the call what an honor really for you too for me to talk to you guys um so i sold my house i used to live in connecticut moved to florida about a month and a half ago i sold a house in connecticut for 225 000 and i owe 20 uh 210 000 here in fort myers in my second home um not sure if i should use to invest the 225 or pay off uh my home right now my house hmm how much do you uh you owe 210 on the current house correct you just took 35. okay so you took out a mortgage on it and the money from the home sale in connecticut was just sitting in the bank it is sitting in the bank right now he had the mortgage earlier oh okay but now you can pay it off i could yeah yes uh well caesar yeah what are you hesitating about bud what's wrong because uh i i retire about uh probably uh back in april eight months ago i'm 48 years so 48 years old uh i have an 80 000 pension coming in okay and i have about ten 410 on the 457. there you go uh right now right and i i could continue making mortgage payments on my with my retirement um so let's try it this way let's pretend for a second that you did not have any of this 200 000 left and you had a paid-for house that you're living in there in fort myers in other words you paid off the house okay so pretend you're sitting there in a paid for house with that money in the 457 and the 80 000 pension and you're sitting there in a home in fort myers and that home is worth what 335 right now okay if you were sitting there in a paid for house with your 457 and with your pension and no other monies other than what you know not not counting the money from connecticut right would you go get a new mortgage on the fort myer house in order to invest no same thing thank you [Laughter] let me tell you what that little trick does okay yeah here's what's going on when someone asks including me because i'm a math nerd should i pay off my home because mortgage rates are low and i can make more by investing it into a mutual fund you are using your brain to do math and you're considering with good critical thinking skills does the math work to do this right now when i reverse and i do that little trick which is a you know it's called a sunk cost analysis in other words do we reverse engineering something's all we're doing right when i do that it causes you to think not just with your brain but also with your heart because your brain didn't leap when i suggested you go get a new mortgage your stomach did into your heart right and so that's where you measure risk is is in your heart you measure you do math in your head yeah and you have to use both to have a good financial plan and too many people in the financial world only use the brain for the math and they don't use the risk analysis of the heart that's good math is in the head risk is in the heart i mean that's uh you know you think about your physical reaction that's right when you think about going and getting a mortgage on a paid for house you go you kind of no it kind of like yeah like i feel like you got the hiccups got tight yeah no your diaphragm your abdomen changed your brain didn't move at all no it didn't even flinch not at all that's amazing you're gonna you're gonna be feeling so different yeah paying off really are buddy you're gonna feel so done a great job and thank you for being a listener 48 years old and retired yes he's done it the right way open phones at triple eight eight two five five two two five mike is in boise idaho hey mike how are you hey guys how you doing today better than i deserve what's up uh thank you for taking my call i'm hoping you guys can help maybe settle a discussion my wife and i are having on the last item in our snowball i we i bought a 2014 ford raptor shelby about six months ago so we and um yeah yeah to uh to fix up and actually flip that was the intent um we got a pretty good deal well okay so my wife actually fell in love with a wrap this is funny with the raptor i love it she uh i love this one got a little bit of a show she's got a little bit of anxiety while driving and for whatever reason when we get in this truck and drive on the freeway and visit our relatives she doesn't have anxiety driving i drive one every day i love her she's safe so she loves it so so where we're at right now is we paid everything off with that and what do y'all want you know i what's that what do you owe on it oh 30 about 30 000. what's your household income 175. okay and then what's your question so my question is we're deciding on whether or not to sell it right now yeah i purchased it with the idea to flip it it's worth about 45 to 50 depending on the buyer right now because it's kind of that special supercharged package the whole thing my concern with selling is we haven't got very far in retirement i'm 43 and we were thinking hey if we sell this we're done we'll put a little cash in our pocket um but you know we enjoy driving it so much it makes the traveling so nice she's down on the fence where she's like what's your other car what's your other car worth what uh let's see she's got a 2014 escape and it's like maybe 15 grand and that's the only other you only have two cars no no sorry so so when i talk to the gal so i've got a couple of especially vehicles and that's one of the reasons that i'm kind of leaning towards selling i've got a couple early broncos as well that i've had for years man um you have a good time and so i fixed them up restored them and and they're in the garage so how much are they important mike how much are the broncos yeah they're worth 100 grand yeah so the one i have is an all original uncut one it's probably worth in the 60 000 neighborhood and then the one that's more of a tourist probably worth mid 40s i would say okay you got a lot tied up in cars now those two cars there i'm going to pull them to the side because they're probably not going down in value they're specialty vehicles they're collectibles but 90 percent of the time 98 of time you buy something with wheels or motors it's going down in value and you just don't want to have too much tied up in toys you guys got a lot in toys we we do and that's kind of where we're both trying to have the description for you to the broncos say that one more time please how emotionally tied are you to the broncos um one of them i'm pretty emotionally tied to just because of what it is i mean the other one is so i mean i am i'm emotionally tied to them they're so rare i can never replace them no that's true i love how honest you are mike i like how you're trying so it might be i mean i i was just thinking because i'm a car guy and i'm into all all these cars you're talking about i love every one of them these are you got some sweet stuff there you got good taste i i'm probably dropping a bronco and keeping the raptor but that's just me that's just me yeah i don't care what you do i'm a little bit afraid with all four of them you've got an awful lot tied up in rolling stock with 170 000 income okay yeah you're gonna get that you're gonna get the 30 paid off and you're going to retire a millionaire i'm not worried about that i just want you you got to stop buying cars i know that yeah well especially ones you keep that's right because you know mike you're only a few months away from finding another one i'm with you i'm with you dave pick a bronco sacrifice i pay off the raptor put mama in that put mama in that raptor you think he's going to drive the escape no chance there's wait a minute no change sell the escape that's what i'm saying that's true yeah get rid of that thing and then drop the only thing on this list that i don't care about yeah get rid of that thing sorry escape this is a boy discussion right here i'm just saying oh i don't know man that's a hard one that is tough just you don't want too much tied up in rolling stock get rid of the debt if you're going to keep it for sure you don't want to keep the debt around and i don't blame you for having this discussion oh this is a good one this is a good one this is the dave ramsey show [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 it's a free call at triple eight eight two five five two two five chris hogan ramsey personality number one best-selling author is my co-host you jump in we'll talk to you about your life and your money as promised crystal's with us in philadelphia hi crystal welcome to the dave ramsey show thank you for taking my question sure what's up i am calling because i recently inherited an annuity and i am not sure if i should just go ahead and pay off my home or if i should go ahead and roll it over and invest it how much is it um it is 139 000. what do you owe in your home i owe 119 000 and if you've gotten a tax person look at it and see how much you'll be taxed when you cash this out um i actually just contacted one of your recommendations and i was faced with them today but um they had to reschedule the time for tomorrow i also had spoken to three of your smart investor pros which i all liked so i haven't picked one yet um good i'm glad i'm glad it's hard to choose uh so the you were named beneficiary on the annuity yes it was divided uh three ways between me and my brothers hmm crystal who left this to you my father your father i think uh with you being named a beneficiary it's probably going to be more like life insurance than it is going to be like an inherited ira i don't think you're going to have taxes on it but i'm not sure i'm not sure i think i think as because you're named the beneficiary on i think it's just going to come straight to you i'm not very good at taxes though so the tax people are all out there listening right now going oh god you know but um anyway because so for sure check me out so i promise okay so uh i'm paying off my house unless i've got a 40 tax on this thing if it's got a big tax on it of some kind and you can roll it to something which i don't think you can do i know you can't roll it into an ira you could roll it into a variable annuity i i'm going to say nine times out of ten and unless you get just some ridiculously horrible information about the taxes i am going to take it out even if i got a little bit of tax and pay it off pay off the house okay yeah okay crystal how much is your mortgage payment right now uh mortgage and taxes is roughly 13 50. can you imagine what kind of blessing it is for your father to have left that to you to pay off your home like you get the deed you own it and now you have thirteen hundred and fifty dollars extra in your budget i just had a happy feeling in my heart because this is this has been a rough thing because my dad was handicapped um 22 years ago and i took care of him for 15 years my brother just took care of him for the last seven we had a family member that was his power of attorney yes ma'am and never invested his annuity and so realizing the amount of money that it could have been right um what i was actually expecting was a little shocking about seven years ago when um that person passed away and he went to live with uh another family member a brother who was his power of attorney and he didn't invest the money either so this money grew for 22 years at one percent interest so um that hurts a bit yeah yeah but now we're still here and the good news is your home's going to be paid off that's right and when you get ready to leave something to someone that home will have appreciated and it'll be it'll make a difference so at any rate you know this is one of those things let that go uh just realize your father thought of you and was intentional enough to leave something to you and you get a chance to write continue writing the story together ben is with us in knoxville hey ben welcome to the dave ramsey show hi i appreciate you all taking my call sure how can we help um so uh i am engaged and i'll be uh getting married here in april yay thank you we're both very excited and uh fortunately we're both going into the marriage on baby step six and our combined income will be about two hundred thousand and um i was wondering how you would suggest um kind of managing our individual um wants within our marriage for example i'm i'm a big gun guy and so that's my hobby and uh my fiance likes you know clothes and furniture and stuff like that well the good news is you don't have any debt except your house and you've got a lot of money to buy guns and clothes so i mean you called me up with this problem making i mean with 300 000 in student loan debt because i would have said no more guns and you know very few clothes so but yeah i mean the good news is you can sit down together and i i i will just tell you uh every gun i buy cost me at least two purses [Laughter] so there we have a we have a formula at the ramsey house i'm with you i got a lot of guns and you know what that means she's got a lot of purses so um you know you're just gonna do some of that right there and all kidding aside and i think you just talk about it and you know it would not be fair for you to spend you know uh three times more than she's spending on those things but both of you have some fun money category room in this budget you described yeah and ben is this a first marriage for both of you yes okay that's fantastic man i'm gonna tell you this have you all done the pre-marriage counseling uh we're starting that next okay that's imperative uh and really dig into that uh get on the same page because financially it sounds like you guys are in sync now it's a matter of as i tell people all the time you got to speak french right it's not you her and you as we and so that mindset of the muscles you all have already been flexing learning to communicate and flex those together your biggest problem is is that you're both used to having your own life and you're now going to combine lives and that's going to require some that's going to be a little bit stressful yeah a lot of regards yeah we'll hear about here what we're going to do is we're going to put you into ramsey plus and that hooks you up with the every dollar budget and put you guys through financial peace university as part of your pre-marriage counseling we're gonna give you a wedding gift yes so you hold on and we'll give you a year in ramsey plus and kelly will pick up and do that now what you'll do is jump on that every dollar budget and lay out a pretend budget as if you were married that's good and then it'll give you something to talk about in the pre-marriage counseling you're going to go ahead and have some budget fights right now yeah but but again the communication on it being able to lay it out looking at the ratios you have a common goal baby step six and paying the house off too that's right so there's only three things you can do with money you can spend it to enjoy it yep you can give it and you can invest it and you need to be on the same page on how much is going to what and there should be plenty of room to do all three of those things with what you have described here you guys are making a lot of money you're doing really well congratulations seriously that's going to be good but yeah they they you all have uh a streak of uh independence because you've lived as grown-ups with a lot of money before now you're going to have to combine that and that's going to be emotionally there's going to be some friction with that it goes with the territory put it all out on the table work the friction work the friction it's going to be great for your communication in your new marriage awesome put the lord first and in the center and now the other stuff will work out just fine this is the dave ramsey show [Music] 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 we were attracted to chm because of its low monthly costs and the ability to negotiate medical costs down established in 1981 and accredited by the better business bureau chm is here to meet the needs of your growing family or small business check us out at chministries.org we absolutely believe in it [Music] chris hogan ramsey personality is my co-host today open phones at triple eight eight two five five two two five if you feel like you've never saved enough money or pay off all your debt after a year like 2020 most of america feels the same way we're all hitting reset ramsey plus is our step-by-step plan helps you get some really quick wins we're going to give you a 90-day plan day by day week by week step by step everything's in there and ramsey plus of course includes financial peace university and you can do a free trial and see if you want to do the whole year the 90-day plan will get you effect it's never too late to get a great start that's right get a fast start get a great start come out of it i mean when you come out of the gate fast boom here we go all right ramsay plus you try it for free do the free trial and see if it works for you you're going to be blown away daveramsey.com reset daveramsey.com all you have to lose is some debt [Laughter] crystal's in anchorage hey crystal how are you hi good thanks so much for taking my call sure what's up um currently my husband and i are have no debt except for a little bit of a car payment and our mortgage we've got a steady income but we kind of struggle just getting by check to check and wondering what is the best way to kind of get out of that rut what's your income oh about six about 72 000 a year okay how much house payment 1700. how much car payment um about i do about 300 a month on it you would do what's your car payment you have a payment amount yeah i i do about 300 a month on it i i go a little bit extra okay but i mean your car payment is actually if you don't do what's the actual payment 210. okay that's what i'm asking all right good okay so that's okay because you're the extras of choice you know and that's not a bad choice because we're gonna get your car paid off that's gonna be something we're gonna do here in a minute but but uh we're gonna put a lot more than 300 on it but um anyway all right so you're not giving me any numbers here that are causing my brain to explode like you've got major problems which means that you're probably like most people including me when i first started this uh in that by not having really good organization with my money and every detail out laid out it the the chaos eats these dollars for breakfast and so a written budget a detailed budget will make you feel like you've gotten a raise because i'll give you an example if you what how often you guys get paid twice a month yeah okay so a take-home pay check is how much three thousand dollars okay so we got six thousand dollars minus house payment minus car payment is three is that that's two thousand dollars yeah yeah so i got four thousand dollars left because that feels kind of weird doesn't it it does like right this second you're asking yourself i know i got water and i know i got i got to buy i know i've got electricity and i know i've got food uh and i know i got some insurance i got to buy here and there uh but you're starting to ask yourself where the flips is money going and that's kind of what i'm asking yeah so yeah you got to get on a game plan and when you get on a budget you are going to feel like you got a raise and crystal i'm going to tell you as i started off on dave's plan uh some almost 16 years ago that is exactly what was the thing that was the awakening for me i was doing too much stupid in grocery stores and in restaurants and so getting down to the root of it you taking a look get some bank statements out go back and look at the last three months and find out that category where you're bleeding money and it could be online shopping it could be grocery stores it could be eating out whatever it is you're going to do an analysis you're going to see it but you cannot manage money with a rear view mirror right you can't wait till it's over and then go wow that doesn't work you have to tell it what to do before it leaves on paper on purpose before the month begins every single month and in agreement with your spouse so they don't do something else that's exactly right and i was just going to say with that when you find that trouble spot go to the cash envelopes on it i'm telling you having the budget like dave's talking about beforehand and then having the cash i'm telling it's going to give you more control and like dave said it's going to feel like you gave yourself a raise because guess what you did yeah jump on every dollar and start using the it's free to use just everydollar.com download the app and start using that budgeting app with you and your husband and you guys start working on that tonight you're going to feel like you got a raise there's a reason you're leaving losing you know there's just no intentionality behind the dollars and no one does by the way you're not like you're not like horrible i got a greek nobody does that all right you have sat down with people for many many years what is the typical the area of the budget that people are absolutely lying about what is it the one where you go this isn't real eating out eating out yeah i would agree i'd say eating out of the grocery store because with the stores we have nowadays they spend less at the grocery store they know they spend it a lot at restaurants but when they find out what they really spend they go oh my god yep yeah yeah i remember i was sitting in a financial peace group leading small group one time years and years ago and uh you know we're kind of going around talking about the lesson that night and we're like okay why aren't why have you not been able to fund retirement where it was an investment lesson one of the questions we're just talking about you know why why didn't you feel like you've been able to do retirement and there's an old country boy sitting in the thing and he goes yeah we looked at it spending 1200 a month in restaurants i know where our retirement's been going we've been eating it about died laughing because he's telling the truth i've been eating it that's it that i'm telling you that's what a lot of people do with it they eat they eat their future yeah and that's scary and you know what that's something we can control because what couldn't we just tell you i love restaurants yeah a lot of my i've got good friends you and i have good friends personal friends they're world-class chefs that own restaurants we go to their place i love that kind of stuff i'm not against restaurants but from a budgeting standpoint when you're calling me and saying i'm broke i have no money i will tell you that 90 of what you spend in the restaurant the money is spent on entertainment 10 is your actual food cost yeah so go home and make make some make some mix make some white beans and cornbread well and and i'm gonna tell you this even throughout all this situation with the pandemic of people being at home more you know utilizing that found out what they were spending they really did because people were like we've got a lot of all this money where this money come from that's right and it's all it was you're not going all the time all the time so be intentional be smart and and again starting to set some things cut it back a little bit crystal you're not different in that regard i don't know if it's food that you're spending it on but you will discover it when you go back and look at the statements like chris suggested and when you start writing it down and try to make it behave hint for everyone is starting their new budget this month whatever you think you're spending at the grocery store you're wrong it's more than that i agree and so if you think you're spending 500 you better put 750 in there because you're gonna find that it's more you've you've been lying to yourself so long that you know i really do do that i've had these people tell me these ridiculous numbers we make it on fifty dollars a month no you don't you can't even no this is absolutely ridiculous so you know but but because here's the thing that is a category that if you under fund it you will go back and either break your budget or you'll have to go back and correct your budget in the middle of the month as you're learning how to budget your first couple of months if you'll go ahead and over fund it you don't feel like you failed you can always cut your food budget back in future months that's a good call for the first two to three months you're doing your budget when you've never done one in years over fund your grocery store budget because your category because you're always everyone spends more than they think they're going what they do and you people that are super nerds and you do the coupons and you've got all these apps on your phone and all this stuff you still spend more than you think you have because we there's something about denial at the grocery store that we didn't we're in denial about what we spent no that's a good point and at the reset event if you haven't watched that you need to go check it out i gave three tips which is make a grocery list only buy what's on the list and stick to the dollar amount you said you were going to spend i'll give you a fourth one don't go grocery shopping when you're hungry truth big truth as if i have ever done anything else but there you go those burritos i bought from sam's weren't that good when i got them home well you bought two 270 i know i was hungry dave i was real hungry this is the dave ramsey show [Music] [Applause] [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] chris hogan ramsey personality is my co-host today open phones at 825-5225 elizabeth is in tyler texas hi elizabeth welcome to the dave ramsey show hi how are you doing today better than i deserve what's up um i have been asked to take over doing uh being the treasurer for my property owners association and are you there yes ma'am i'm sorry um and um okay sorry um so anyway so i've been asking you that and i am curious about personal liability if i should be concerned in any way in regards to that you would need to ask an attorney i'm not one i do own many many many pieces of real estate in hoas and most of them are a hot mess [Laughter] and so there's always conflict and drama and gossip and stupidity and everything else you would as i understand the law and again i'm not a lawyer so you're you're you know it's a legal advised question that you're really asking but as i understand the law you would not have any liability unless there was misbehavior now obviously if you uh bought yourself a a new grill for your backyard out of that money then you would obviously be liable for the misbehavior or if there was gross uh negligence you did a horrible job beyond the pale of what any kindergartner could do then you might be held liable most of the hoas carry errors in emissions insurance for their board of directors and so if a resident files suit against them for you know mismanagement or negligence or fraud or whatever else the eno will step up the insurance company will step up and defend them legally so most of the time you're covered and even if you're not you mean you might have be out some legal fees but you would not be held to uh if somebody didn't like the color of paint that was chosen for the front fence right which will happen yes um the then the uh uh then you're not liable for that yeah elizabeth dave's not allowed to be on any kind of committee like that people people people would end up crying okay i'm just gonna tell you uh but i i think you know do you have a lot of time do you want to do this or do people just want you to do it well it's so it's an interesting situation i live in a neighborhood where i have an hoa and a poa and okay properties understand you said the poa it's just for my street okay uh because there's certain expenses that we are responsible for just on our street yes ma'am and so this is for the poa um and so i would i'm not so sure that we have errors and admissions on that because it's such a small thing yeah well it would have to be the people on your street or the hoa that you pay money to out of the poa someone would have to get pissed off and sue you yeah from a practical standpoint before you would have any liability so as long as everything's fairly low drama you probably don't have any issue but i can't make that promise in an hoa as you can tell i can't stand the things and no no reflection on you miss lizardman you sound like a sweet person he's a sweetheart you can tell but too many of the people involved in them really don't have a life and so uh would you tell me dave what's the percent of people that need to be incarcerated uh is it two percent or has it grown two no i'm not incarcerated um oh and institutionalization same thing yeah well sort of ish yeah and it's it's a higher percentage than h.o.a but yeah oh yeah no i'm not i'm just not a fan i i i'm a yeah okay just let that yeah here we go kelly kelly kelly's in atlanta hi kelly how are you hi good how are you better than i deserve what's up uh thank you for taking my call it's such a blessing i have a question about uh our my okay so i'm a stay-at-home mom and married my husband makes about 60k a year as an essential worker uh his career has the potential to grow his salary to about 70k within the next five years we have two children under three and i currently have an as in an essential field with the potential to get a bs in engineering after we complete our baby step number three uh that would be no longer than two years from now we are currently paying off our house and that's the only debt that we have which is about 155k left to pay off uh he's mid-20s i'm early 30s and we're wondering out of these three options which might be more advantageous for us financially speaking the first option would be if i go back to school and i get a bs in engineering in less than five years to jump start a career with a higher salary while maintaining our lifestyle at only 60 to 70k a year with extra towards other baby steps the next option would be should we maintain his salary and career and the lifestyle that we have now or the third option would be would it be better to go back to work part-time and try adding on to his salary um the reason for us changing head-up households would be because we feel like uh one parent uh should be at home with the kids but um you know there's always the the um like the possibility of us just you know adding on to his salary and we could both be at home at the same time yeah well i mean there's two or three things going on it's not just math if it's just math the answer is how do you make the most money yes sir and then you've got to say okay but what's the uh what's the trade-off on the way that makes the most money what what and you know where do you what do you want to be doing career-wise as well as wealth building wise as well as parenting five years from now 10 years from now and which of these decisions takes you to that person and so um so we call it around here when we're setting business goals strictly when we're doing strategic analysis in the business we say what's the desired future yeah where do you want to be in 10 years and then what must be true that's not true today for us to arrive at that desired future and in your case it could it be a degree could it be a change out uh in your husband who's at home who's not could it be a different way to do engineering could it be i don't know i mean what has to be true for you to hit your parenting goals your career goals and your uh uh relationship and wealth building your wealth building goals yeah the closest and those things need to be but all three laid out there at the end and then you start backing out of it and reverse engineer it and say okay what must be true that's not true now and you're kind of saying that because you're saying i got to go back get a degree if i'm going to go this way i need to go get the bs if i'm going to do this instead of just the instead of just the associates right and um what must be true if we want a parent at home well he might quit if you go make more money and come home and be at a stay home dad that's right what must be true these are things that must be true with the different options but then if you do those things or you look back and say the trade-offs because there always is yes there is we're the right ones yes yeah no you're right and and kelly you all deciding and talking about that so you can put the priorities and your husband may have a different level of priorities but what i want you all to do is to have the time to communicate and then hear listen with your heart it's so easy to listen with your ears and your head but when you listen with the heart what you're doing is you're really hearing and feeling and understanding the person and if your husband can feel that you're doing that for him and he's doing that for you you all will look through the lens for these kids and say hey what's the what's the route what do we do and like i agree with you it's always give and take uh we want the take take uh but we got to do the gift well i think too i mean you know i'll give an example i had a young lady the other day that um was telling us that she had always wanted to be a nurse and so coleman ken coleman and his show suggested she go and shadow nursing for a couple days and she went to the hospital and worked you know beside a nurse and i went ooh i don't want to do this ah but nursing is a good career right and it's good money it is and you can always get work and that was what was appealing but then the actual doing of the job so you like it yeah do you want to do engineering 40 hours a week 10 years from today with your bs is that what you want to do nothing wrong with that but you need to be sure that's that's a lot of go a lot of stuff given up to get there sure better be sure that's the ladder's ring leaning on the wrong building this is the dave ramsey show [Music] [Music] [Music] so [Music] our our scripture of the day is proverbs 4 23 keep your heart with all vigilance for from it flow the springs of life michael alter says the bad news is time flies the good news is you're the pilot that's pretty good colby's with us in brunswick georgia hi colby welcome to the dave ramsey show hi thanks for uh having me sure what's up so um i'm 18 years old i'm a freshman in college and i'm trying to figure out what i should do with the majority of my income i make about twenty thousand dollars between my part-time job and side hustles um so i'm trying to figure out if i should continue investing it the way i am or should i just leave it in a savings account for when i graduate college and if i need the money it's there what are you investing it in uh just in the stock market so uh i have about eight thousand dollars in mutual funds and individual stocks and then uh last year i put 5000 in a roth ira good for you well done well done well colby the best rate of return on your money is colby what are you studying aviation science and flight management okay so you're going to make more money as a result of having spent money on education than you will make in mutual funds given that you are studying something that is actually usable you're not getting a degree in medieval left-handed poetry okay right so um very wise on your part so the point is is that the main use of money for you the number one job one for money for you is graduate and graduate on time and graduate debt-free so i don't care if you save for retirement i do care if you graduate until you graduate i do care that you graduate you graduate on time and you pay cash and you don't go in debt now you're a working dude and you're a saving dude and you're way ahead of the curve i'm so impressed with you yeah kobe you really and truly are buddy um who taught you about this did your parents teach you are you self-taught yeah my um parents always taught me the importance of being wise with your finances and especially my grandfather i'm fortunate enough to have my college paid for so i'm not having to take out any student loans or need that so i'll graduate college debt free so that's fantastic so i would ask you to take it a step further i want you to find someone that is doing a pilot or someone private or or someone that does commercial but really find out what's the next level for flight school what's it gonna cost what are the areas you're thinking of so that way you can start to save toward it as well uh you are way ahead of the game young man i know mutual funds are fine single stocks are not good growth stock mutual funds or just a savings account knowing that you just don't need to be fancy just pile up cash a big old pile of cash when you graduate means you're a genius yep yep okay and then you can make all kinds of choices for long-term investments buying a home moving to a new city do all kinds of stuff when cash gives you options yeah and you know what dave i keep getting on my show the chris hogan show i'm getting people calling in that are 22 and 23 and they're they're paying cash for homes they're they've got a hundred thousand saved for retirement i'm like who taught you i've had five of them tell me they went through foundations they plugged into our high school curriculum took it as a freshman listened to it got out and started doing it wow so it is one of those things where you know in that department it is making a difference maria is in tampa hi maria welcome to the dave ramsey show hi thank you for taking my call i appreciate everything you guys have done thank you my question is yeah can we afford to build a 589 000 home what will your payments be right it should be if we put 20 down it'll be 33-19 okay and that is that a 15-year fixed uh no that's a 30-year okay need to calculate it on a 15-year and it shouldn't be more than one-fourth of your take-home pay and so are you making sixteen thousand dollars a month take home no we're making thirteen thousand dollars take home okay yeah you're getting ready to sign up for too much house yep okay okay and maria listen to me maria i'm so proud of you for calling in because the bank or the mortgage company will allow you to do that they will allow you to sign up for that headache and heartache trip you have to be aware you and your husband enough to say uh uh and you downgrade you you i'm serious because they will allow it and and what you'll think is well if they said i can it must make sense no it doesn't it makes sense for them yeah a fourth of your take-home pay on a 15-year fix now take-home pay is not after 401k take-home pay is not after insurance take home pays just after taxes so what do you get home with with not counting your investments not counting uh health insurance coming out or anything else that comes out your check except taxes so all i'm saying about take home pay is taxes so if there's a bunch coming out to get to 13 and really if you add back in the 401k and you add back in the health insurance and it comes out to be 15 then you know we're probably getting pretty close here because your payment's going to be on a 15 year or fourth of your take-home pay and you're going to be fine so it's not an absolute but you need to dig into it a little bit more and the goal would be one fourth or so give or take but you just if you get if you get up where you got 35 of your take-home pay on a 15 years all you ever want to do because you want to get the house paid off that's a big part of wealth building that's right and if you get up there at 35 you can't do other stuff that you need to do you you get handcuffed dave and i've spent time in la and in new york and i've seen people that are home poor it means they bought so much house that they can't really live in other places so don't necessarily seek to buy the home you want buy the home that you can afford that makes sense for you and your budget yeah sean is in houston texas hi sean how are you hello um i'm doing pretty good i'm calling because we're being sued by american express we were served this weekend the papers we owe them we owe them 85 000 we have 50 000 and i'm trying to find out uh do i need to hire an attorney or should i try to settle with them for the 50 000 or i have talked to an attorney they told me it would be 5100 to hire them and i'm just trying to find out which way to go okay uh that sounds a little steep to settle that and uh how far behind are you we left we were paying uh we we we last paid them in july uh right after you know the cover thing uh we were on the world and 85 000 on an amex card it's a it was a business card and my husband decided to do a business deal and fronted all the material for a project and that's this yep so here we go this is why we don't do it okay i just wanted to learn i wanted to learn the lesson with you there ouch i'm sorry i'm sorry you're facing this yeah that's a big enough deal i'm not going to have you settle that on your own i would get legal representation i don't think you found the right legal representation yet and no you're not bankrupt you have enough money to settle this amex will do this but they are they're skunks they are not good people and we deal with them all the time and you can tell they're lying if their mouths moving so you really do need to get legal representation i think you can settle it for 50 or less with them if you haven't paid them since july try this go to collectionbully.com collection relief.com that's a group of attorneys that we recommend for people that are being bullied by collectors okay and i think one of them will probably pick up your case and represent you for less than that i might be wrong it might be that much but okay um okay but if you can settle 85 for 50 and cost you five grand that's still a deal right that's still a deal yeah it is and sean i'm proud of you for being proactive uh because a lot of people would freeze in the moment and uh i'm glad you're being proactive and acknowledging this for what it is it is something that needs to be dealt with absolutely open phones at triple eight eight two five five two two five and you're not bankrupt okay so i'm picking on her her husband but um 38 of small businesses use credit cards to finance their business ideas and this is where you end up on the verge of bankruptcy stop that crap yeah wow organically grow your business with the cash that the business creates and if you can't if you don't have the money or can't get a big enough deposit to cover the project don't take the price don't do it that puts this hour today ramsey showing 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] [Music] you

Channel: The Ramsey Show - Full Episodes

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Keywords: dave ramsay live, dave ramsey, dave ramsey channel, dave ramsey live, dave ramsey live show, dave ramsey live stream, dave ramsey podcast, dave ramsey radio show, dave ramsey show, dave ramsey show full show, dave ramsey show live, ramsey, ramsey solutions, the dave ramsey show, the dave ramsey show live

Id: 6PQ8cUIFRLg

Length: 122min 50sec (7370 seconds)

Published: Tue Jan 19 2021