This Baby Step SHOULD Scare You!

[Music] brian is with us brian's in pittsburgh how are you brian dave i'm good thanks for taking a minute to talk with me my pleasure sir how can we help i want to tell you uh about six weeks ago i ran into a friend of mine that retired and he was telling me how great it was and asked me how much longer do you have i said 12 years and he started telling me get ready debt free that's the only way to go i hear him don't pay a lot of attention to it my son tells me a week after that hey i'm listening to this ramsay show never heard of it before i said what is your new howard stern i don't know never heard of yes he howard's got much better hair than i've got yeah so he tells me this a couple more times i'm on a trip for work i got a lot of windshield time i turn it on i listen to six podcasts back to back to back and i'm gonna tell you i'm hooked i get it i am bought in wow so i heard you say hey you gotta know everything that's going out everything is coming in and what's your debt so i did that i spent about 30 hours on that last week and let me tell you it's uh scary it's emotional it was tough and so i've got some debt and my question for you is i have about 12 000 and change that we have invested in the stock market single stocks and is it smarter to leave that there as a savings i know there's a risk there and or is it better to pull every penny out of that and put it towards the debt that we have and that would that might would take care of uh i don't know 20 25 of it but my goal i mean i want to be debt-free i got 12 more years to retire and i want to be debt-free when we get there and i wanted to do it and then my wife spot in on it now okay so you got about fifty thousand dollars worth of debt and twelve thousand dollars in stock 66 247 to be exact all right good deal what's your household income uh about 180 190 annually okay all right so you've been listening and you know some of the lingo now and some of the process and the baby steps and all of that right and so baby step two is where you are paying off all debt except a house using the debt snowball listing your debts smallest to largest paying minimum payments on everything but the little one attacked the little one we stop all investing temporarily and we use all money that we can get our hands on that is not in a retirement account to throw at baby step two and that's a standard baby step two answer which would lead us to cashing out your stock and paying off a fourth of your debt okay not saving like you're when you talk about emergency funds i mean leave that there i mean we got no cash savings how much cash do you have uh i don't know 11 12 grand something like that okay we always baby step one is one thousand dollars saved anything above that goes on baby step two until baby step two is done and so i'm gonna use that money as well down to one thousand dollars which is going to scare the pee wadding out of you by the way that scares the hell out of that i know i know and that's it should but you're not going to live there for very long because now we've paid off uh 23 000 of your 66 000 uh if i did my math right just now and you have enough income to clear the rest of it very very quickly and as soon as it's cleared then the first order of business is baby step three and that's build your emergency fund back up to a full three to six months of expenses which it's not now it's kind of it's kind of anemic right now it's weak right the two together would make a decent emergency fund if you didn't have any debt but that's what we teach and here's the reason it's not to induce fear but the fear will also help be one of your motivators that oh crap moment you just had that thing where your stomach just kind of jumped up in your throat just at the mere suggestion of doing this and we hadn't even done it but just the idea you go you know we all do that we all have a physical reaction to that um that is going to drive you to stick with the plan now to suggest that you keep a 1 000 emergency fund for five years or something would be ludicrous and i don't suggest that but we're talking about just a mere months here again what was your household income uh 180 190. okay so how fast do you pay off 50 thousand dollars six months 40 or no i'm sorry 40 000 like what i mean less than six months right well my goal was two years i wanted to do it before i'm 50. so that's that sucks that's way too much rocks you make 180 000 a year i need 40 000 of 180. this is six months how much does this is five thousand i want five thousand dollars a month on this dad i want you to smack the crap out of it all right and then you're so you're done by christmas dude now chris by christmas you're starting to rebuild this emergency fund from one thousand dollars up and then as soon as you've got that three to six months of expenses then you restart your 401k oh by the way you put money in the 401k right now i took your advice and i backed it down to the uh minimum that the company matches okay that wasn't my advice my advice was stop it i'll stop it all together well i misunderstood i thought you you were saying get you know don't let free money go to the company matches no no no not when you're in the hole man you're just getting started on all this you're trying so what i'm what i'm doing is i'm not making fun of you and i'm not picking at you but i'm giving you the the the detail that you haven't gotten in the last couple weeks of exposure yet and so what i need to do is i'm going to send you the the game plan with all the nuanced detail the baby steps on steroids it's the best-selling book called the total money makeover and we'll give it to you as a gift hold on kelly's going to pick up i'm going to mail you one and you read that thing and your wife read that thing and you'll see what i'm talking about 180 minus 40 you can make it on okay 90 minus 40. 90 in the next six months minus 40 and you're done by christmas you can make it on and i just put 11 and 12 on the debt so i know i put 23 out of there so it's 43 left and so yeah you're there you're going to be there and that's that's what i would do if i woke up in your shoes the the uh the great news is you've you've found a new thing here and you're fired up about it but it's about to get real so imagine you imagine this this is this is the feeling you had brian when you put you spent 30 hours and you put that debt down and you got emotional that's you on the plains of africa and you're a a gazelle and you just stuck your head up and you just saw that lying in the grass and now you gotta take off running man and that's what the next six seven months is gonna be it's gonna be a all-out gut-wrenching sprint because they're all intensity that's right because they're coming for you man they're coming you gotta ride i wanna mention this i don't want this to fly by dave i know this makes me sound sappy it takes a special level of courage for a grown man making this kind of money which means he's got some kind of he's got some some ego some strength his son came in and said dad i think you should look at this and most dads in this situation go shut up and he listened he just listened that the approach on the call was humble it was a humble call and i want everybody out there if your son comes says hey can we just talk dad take that talk take that that breakfast take that conversation man um that took a lot of courage for a son to do and i'm proud of him but i'm proud of that dad for listening man that's cool yeah it doesn't happen very often cool brunch got up he's got a thing going he does man he's uh comfortable in his own skin yeah strong but making good decisions so yeah you're gonna you're gonna go do this brian and and then you're gonna call us back do your debt free scream we're gonna hear a great story from you it's gonna be awesome what i love about brian is i guarantee he's a leader and as a leader he approached this with the appropriate skepticism and then he did the math and then as a good leader he went oh crap you know what i mean that's a good leader man not that everything's perfect not that i got to come up with some stupid excuse but i can see the data and i can go whoops we need to change course quickly right yeah i don't think i did that one right i love it man i love it that's this is there's a formula here for everybody listening yeah that that you know involves life change you know bible says be not conformed to this world yeah this world's broke yep i mean normal is looking good and no money yep normal is you're driving a car with a big butt payment on it normal is you've got a student loan that's been around so long you think it's a pet normal is you know you've discovered master card yes and discovered bondage in american distress this is normal normal sucks but it looks good everybody's walking around the smile on their light on their faces living in the land of denial and you know i'm not talking about a river in egypt you know i mean seriously but when you stick your head up and you go game on baby i'm not gonna be normal anymore be not conformed to this world be transformed by what brian's doing the renewing of your mind new information will set you free baby

Channel: The Ramsey Show Highlights

Views: 499,127

Keywords: the dave ramsey show, budget money debt cash, real estate, insurance, how to make money, dave ramsey, save, credit card, compound interest, buying house, buy, snowball, This Baby Step SHOULD Scare You!, scary, emergency fund, baby steps

Id: nHNcILjomx8

Length: 9min 28sec (568 seconds)

Published: Thu Jul 15 2021