The Ramsey Show - App - A Detailed Budget Makes Your Money Work Harder (Hour 3)

Episode Date: December 6, 2018

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Music Music Music Music Music Music Music Music Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show,

where debt is dumb, cash is king, and the paid-off or 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 888-825-5225. 888-825-5225. I hope you're getting in the Christmas spirit. We are around here. Merry Christmas. I have five grandbabies, five and under. You don't think we're not going to have a blast? We're going to have a blast. I'm telling you, this is the best time of all. We have more pictures of people crying with Santa Claus than ever before.

It's awesome. All right. Keith is with us. Keith's in Kansas City. Hey, Keith, Merry Christmas to you. Merry Christmas. How can I help, sir? I have a question.

I have a surgery I need to get done on my shoulder, and this year we got a $5,000 out-of-pocket that we have to pay and a $500 deductible. This year I've met my deductible, and I've paid $2,900 of the out-of-pocket. If I get the surgery done now, at the most, I'd be looking at $2,000 to do it. If I wait until the first of the year, I can be looking up to $5,500 time I pay the deductible and the out-of-pocket. I don't have the cash to do it right now, so I was wondering, and I know you don't like, say, getting a loan, but if I had a loan from the credit union or something like that and that I could pay back the first of the year when I got my tax return, if that would be something that I should do or I should just wait it out. What's wrong with your shoulder? Just have it tore from popping out of place and stuff like that.

Okay. Ouch. Yeah. That's a painful thing. How old are you? Yeah, 33. Okay. And are you married?

Yes. What's your household income? We make $43,000 a year. Okay. And so the surgery would be scheduled before the end of the year yeah they can schedule me they called and said they can get me in on the 11th and uh and i know um if not you know like i said i could go to the first of the year it's not something i have to do they not um just bill you i mean you don't have to go in with the cash and put it on the counter to get surgery, do you?

Well, no, but I just thought that, you know, I mean, I can be billed for it, but I just thought that it'd be better. I get a better deal basically now, so I didn't know. No, I mean, they can just bill you and you still get the savings. You'll just have to pay the bill when you get the bill in January, right? Yeah, well, then I'd be just looking at paying like I figured that I'd be looking at paying maybe $3,500 more just because I've already met everybody.

You misunderstand. If you get the surgery done now, they'll just send you a bill, won't they? Right, right, yeah. It's not extra. It's the date of the surgery is when they when the uh deductible applies not when you pay the bill uh-huh you see what i'm saying well yeah i do um so you get the savings that you're trying to get by just going over there and getting the surgery and they send

you a bill and you got to pay it in january uh-huh right but i was just i knew the surgery would cost more knowing that because if i get to the five thousand dollars out of pocket which does not cost more that's what i keep trying to tell you if you go get it's when you have the surgery uh-huh that is based on whether is your out of pocket. You've met your deductible, right? Yeah, for this year. Yeah. And so as long as you have the surgery this year, not when you pay the bill. Yeah. As long as you have the surgery this year, that saves you what you're trying to save.

Uh-huh. Not when you pay the bill. Uh-huh. You follow me? Okay. Right, right, yeah. So go over and have the surgery. Tell them to send you a bill.

Okay. And go deliver pizzas or have a garage sale or something and pay the bill in January. Okay. Okay. You know, you can make a little extra money, pick up some overtime, take an extra job, have a garage sale, do some stuff, and pay the bill in January. But go ahead and get the surgery and get your savings. I agree with you to try to take advantage of the savings before your year-end thing,

but no, you don't have to borrow money to do it. That's what I'm not saying. That's what I'm – I mean, they're going to send you a bill. Just tell them, send it to my insurance. Most people don't pay it for 90 days anyway. And so, no, don't go borrow money at the credit union. That's the answer to your question. Yes, go have the surgery.

That's the answer to your question. Yes, go work extra. Yes, have a garage sale. Yes, put some stuff on Craigslist. Yes, pay cash for the bill when it comes in after the first of the year. But you've still gotten all of your year-end savings by having already met your deductible. Thanks for the call.

Ashley's with us in Philadelphia. Hi, Ashley. How are you? Hi, Dave. It's Ashley again. We got cut off earlier. Oh, good. I'm glad you got back through.

Okay, good. Good. I know. I'm glad as well. Okay. Let me see if I can remember. You were getting, you had your $1,000, you were brand new me see if i can remember you were getting you had your thousand dollars you were brand new at all of this and you were sucking at budgeting and you're trying

to get started does that sound right yes oh i do remember good okay my two biggest pieces were 64k and student loan and then i currently have a, a car lease that will be up in six months. In six months. What's the monthly on that? $408,000. Nice car. I know. And so what do you make a year?

Gross, I make $80,000, and it doesn't feel like it. No, because... And that's the weird part. I think that's where the realization came from yeah well it's because you're it's because you're disorganized and you got all this debt sucking the life out of you and you got a freaking 400 car payment that's the other thing how much is your rent um it's 1200 okay all right cool okay here's the thing the first thing that's going to help a whole bunch is jump on every dollar

and put together your budget. It takes about 10 minutes. When you put at the top of the page what your take-home pay is and you give every dollar of that an assignment, a name, a mission, you're going to feel like you got a raise right then just because you got organized. Knowing that you got the light bill paid, knowing that you have the money for food, there's a tremendous relief emotionally to begin to attack some of these other things. That's the first thing you're going to have occur.

So go to EveryDollar and download it for your phone or for your desktop, either one. I don't care which. Okay, do you have money coming out of your check for 401K? Yes, that's what I was going to mention. Stop it. I do have withdrawals for 401K and IRA, but I'm not maxing out. Good. Stop it.

Stop it right now. Yeah, because we're going to get this mess cleaned up, okay? Probably as little time as you have left on the lease, you're probably better off to just hold that lease through the end, but we've got to get a little money saved up to buy a little get-around car because you're going to turn that puppy in. Right. Yeah, you've only got six months left, so that's only $2,000 left on that thing.

And you can work your way right back through that, and you're going to be able to do this. I'm going to walk with you. I'll show you how. Hold on. I'm going to send you a copy of the book, The Total Money Makeover. It walks you through exactly what to do, step by step. And you can do it.

But stop your 401k temporarily. We're going to put that $1,000 aside. We're going to get you on a budget. We're going to begin to attack these debts. We're going to plan to turn that car in. You got this. You can do it did you know statistically when it comes to life insurance and protecting your family that women are more likely to be uninsured or underinsured than men. This doesn't make any sense.

Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day. This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance. They shop the top term life companies to find the lowest rates available.

You can compare rates online at Zander.com or call 800-356-4282. This is something every family has to deal with. That's Zander.com or 800-356-4282. Following on Instagram, which over a million of you do, thank you for that, at Dave Ramsey. I've been posting some blog stuff on there too, by the way, for those of you that want to see some interesting different things that some of my musings. I don't do that very often, but I just started again a little while back. There's a few of them floating around there on Instagram

and on our blog page on DaveRamsey.com too. But anyway, Sam says, Dave, I'm so close to being dead free one thousand dollars left and i have eleven hundred dollars in my emergency fund can i just take it out and pay it off tomorrow well you can leave you pretty vulnerable though and um that's why we tell you to keep a thousand dollars i mean what if your alternator goes out on your car the next day and it's $400? What are you going to do? Sit until payday? I mean, it's up to you.

You can do what you want to do. I want you to be out of debt as bad as anybody on the planet. I love getting people out of debt. I love you being out of debt. I love you being this close to being out of debt. But we tell you, baby, step one is $1,000, and I wouldn't get below that because, you know, that's not even enough. It's just a starter emergency fund. It's not even a real emergency fund, you know.

But, man, you're sitting there with nothing. You've got $100 or something. That's what you'd have. You've got $1,100 and $1,000 debt. You'd have $100 left to your name. But, I mean, if you do that tomorrow and you get paid the next day and you can put the $1,000 back, then just wait one day. Wait one week, whatever it is. I wouldn't do it. I want you to have a little bit of... $1,000 is not much

margin, but it just gives you a little bit of Murphy insurance. Megan's in Madison, Wisconsin. Hi, Megan. Welcome to the Daveave ramsey show hi dave um thank you for all that you do thank you um i i wrote this out hoping i would be quick and concise so i'll just read this quick um five years ago i went on a trip to italy and in our rental car we drove this warrant um there was an area near the city center that said authorized traffic only so when we came to the barrier for it, I don't recall why I didn't back up, other than the street was narrow, but I made a U-turn around the barrier.

Later after our trip, I got a ticket mailed to me from Italy for something like 200 euros. I tried calling to explain to get out of it, but I wasn't able to talk to anybody, so I decided to ignore it. Now it's five years later, and we suddenly got a letter from a collector asking for $430. And apparently there are actually two tickets. But I don't know where the second offense occurred because I wasn't aware at the time that we did this twice. So I didn't know about the second one until now, but the total between the two tickets is $860 with the collector. Because I don't really feel like these tickets are valid based on what happened, I don't want to pay them, but now that there was collections,

I think it's too late for me to try to work with the Italian police to get rid of them. So I wanted your advice on whether this is the same type of collections that you talk about where I can offer a lump sum to get rid of bulk debt. And my questions basically are whether or not that's possible, how much you think I can offer a lump sum to get rid of bulk debt. And my questions basically are whether or not that's possible, how much you think I should offer, and also if there's any need for me to worry about this being on my credit report. My credit's currently good, but my husband and I are working on baby step six, and we ultimately plan on having a zero credit score and buying our next home with cash. So can I ask the collector not to report them,

or is it something I shouldn't worry about because we don't have a plan on costing our next house purchase of these? I don't know what has happened here, but I smell a rat. Okay. In the credit card world, which is not what we're talking about, in the credit card world, if you have an old credit card debt, the banks sell those off for three to five cents on the dollar. So 50 bucks for $1,000. Right.

And these debt buyers buy these things, and they oftentimes, there's been several articles out, they'll try to collect on a debt that's actually been bankrupted, which is illegal to try to collect on a bankrupted debt. They'll try to collect on a debt that's outside the statute of limitations. And they're buying junk debt, is what it amounts to. And then they just go after people, and rather than deal with the hassle of it and the fear that it's going to be on their credit bureau report people pay them something when they shouldn't have to because it was bankrupted and it's the balance is zero after bankruptcy so i'm not saying any of that applies here except that this feels like one of those people this feels like a debt buyer buying junk debt from from tickets in it? I mean, my God, from five years ago?

I mean, really? So I honestly don't know anything about the law on it. Hypothetically, anybody can pop something onto your credit bureau report. I suspect that there's a statute of limitations on this. I suspect the chance of them collecting internationally on you um is almost zero i i suspect you probably could beat the snot out of these guys um and so what is your household income it's 155 000 so it's not that we can't i know that wasn't what i was asking i was what i was trying to determine is if you wanted to fight, could you afford it?

Because if it was me right now and that happened, I would call my attorney and give him a couple hundred dollars and tell him to pound these people into sand. Because I smell a rat. I think this is a skunk. I don't think there were two tickets. I think there was one, and I think they're trying to load you up and just see what happened, see what they can get away with.

I smell a rat. Well, I did. Quasi-con. Yeah. I did email the, well, I called first, and then the guy gave me his, or I gave him my email address because he was going to send me evidence of the second ticket because I called and said, I don't know why there's two. Yes, he did.

There are pictures apparently that he got from, I guess, the Italian police with license plates of the car at like 15 minutes apart. But like I said, I don't know where the second thing happened and how we didn't notice. But there's also, because they had sent me like certified mail. I'm almost positive you're not dealing with the Italian government. No, this is actually a collections agency. Well, they're a collections agency that bought this debt.

Yeah. They're a debt buyer, like I'm talking about. They're a bottom feeder. Right. Okay. And so in that case, they probably have $15 in this. Mm-hmm. That's what I'm saying. And so in that case, they probably have $15 in this. That's what I'm saying.

So, yeah, if you want to pound them, it sounds like they've got a little bit of evidence. I don't know if statute of limitations is run or not. If you want to fool with it, you can. Or you could just say, I'll give you $100. Okay. That's training about the amount I was thinking. And There's no possible way I'm giving them $800. Yeah. Just on principle.

Right. I'm going to spend $1,000 to not give them $800. I mean, I was thinking about whether or not I should get any sort of lawyer involved, but it seems like I thought I'd probably end up spending more on a lawyer. You will. You will. But I'm just hillbilly. I like a good fight.

So, you know, that's what it comes down to. And so, I just can't stand somebody screwing me around, and I think you're getting screwed around. I really do. And you do, too. That's the story you told me led me to believe that, right? Yeah, yeah. So, the convenient thing is to settle it for some amount of money. You can afford zero to 800.

None of those numbers are going to kill you. Whatever you do, you get it in writing, and you staple it to all those emails in hard copy, and you keep it in a file the rest of your life because these idiots may raise this up again as if you didn't pay it before or something. Because I'm not accusing the Italian government of anything, but I am telling you that debt buyers are the bottom feeders of this world. There's a few of them that are decent, but most of them are scum. Right.

And so you're dealing with slimy. And so be careful. Don't get slimed. Get everything in writing. No electronic access to your checking account. Keep hard copies of everything when you're done. And then if it comes up again, you can defend yourself hypothetically from more hypothetical crap. Wow, that's hard to believe.

I did a U-turn five years ago in Italy, and I get an $800 bill. Wow. Oh, my gosh. This is The Dave Ramsey Show. Wow. Oh, my gosh. This is The Dave Ramsey Show. Thank you. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs.

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Thanks for joining us, America. This is the Dave Ramsey Show. We're glad you are here. As we head into the Christmas season, I want to give you something free that you can do today. It'll give you some peace of mind. Check in on all of your coverages, your insurance, your credit reports, the right types, the right amounts.

Make sure everything's done, and I can help you do that. To do it fast, we've built a five-minute coverage checkup that will show you how your coverage stacks up in all these different areas. This is what wealthy people do. And you better do this. You've got to make sure you you got the right stuff in place.

So all you do is text the word CHECKUP to 33789. It's a five-minute coverage checkup. Text the word CHECKUP to 33789. It's interesting to me that, you know, wealthy people, you know how they become wealthy? They concentrate on building wealth and protecting their wealth. Text CHECKUP to 33789. If you want a good marriage, you concentrate on your marriage. If you want good kids, you concentrate on your kids.

If you want to have a good career, you concentrate on your career. You focus on it. You put intensity into it, and you're thoughtful about it, and you you're careful about it. It's not, thank God it's Friday, oh God, it's Monday. We start to live

with a longer view of things, and it changes everything in that category when you do, and that includes money. Marjorie is with us in Austin, Texas. Hey, Marjorie, how are you? Hi, Dave, how are you? Better than I deserve.

What's up? I am in quite a bit of debt, and I do have an IRA with some money in it that I have pulled out once before and been penalized for it, but I just wanted your thoughts on should I go ahead and pay off my debt with what I have in retirement or leave it there? Nope, leave it there. Okay. The only time I pull money out of retirement to pay debt is to avoid bankruptcy or foreclosure, and you didn't mention either, so I'm guessing you're not there. No, I'm not.

How much debt have you got? $27,000. Okay. And so what happens, as you've already discovered because you did it once, when you pull money out of an IRA early, you get charged a 10% penalty plus your tax rate. And so if you're in a 20% tax bracket, that means you get hit 30%. So that's like saying, Dave, I want to borrow money at 30% interest to pay off some of my debt. Well, that would be stupid.

It would. Yeah, and you wouldn't want to do it. I mean, you see what I'm saying? But you weren't thinking about it that way, so I'm not saying you're stupid. But once you put it on the table and you understand, this is like borrowing money at 30% interest. No, thank you. I don't want to do that. It sounds like it's easy, but it's not.

It's real. The long-term implications are ridiculous. So what kind of debt is your $27,000? Credit card. Have you cut them up yet? I have one car payment, too. How much do you owe on your car? I owe 11 on my car.

And what do you make a year? 42. Good for you. Okay. How old are you? 32. Good. You're single?

I am. Good. Okay. But I'm having trouble making it through month to month with rent and that and paying off the credit cards because I try to put more towards them than the minimum. Don't until you have a budget. You need a written budget that first takes care of food, then lights and water, then shelter, then your car payment and car gas, food, shelter, clothing, transportation.

These are the basics of life. Once you've got those done, then, shelter, clothing, transportation. These are the basics of life. Once you've got those done, then you pay your credit card payments. And once that's done, then if you've got more money, you pay it on the smallest credit card. Are you putting money into your 401K or into retirement? I am, yes. Stop. Okay.

While you get out of debt temporarily. Are you getting a big tax refund each year? Yes, I put extra money aside. Why? So I have that cushion. Why? It's zero percent interest. You're loaning money to the government and they give it back to you in April with no interest. Meanwhile, you can't make your bills. So how big was your tax refund last year um i actually got penalized for the pulling money out so i didn't get any money how much money how much money would your tax refund be this year do you think probably about 800 okay so you got um you don't have to way too much but you got almost a hundred dollars a month too much coming out. Yeah. Okay, so let's get that $100.

Let's stop the 401K. Let's get on a written budget, a detailed budget. Jump on every dollar. It's free. Get that on your phone. I just downloaded it. Good, good. Get your budget done tonight.

It takes 10 minutes. Give every dollar a name. Take care of you first, and then play the game. Okay. The game is get out of debt and all that crap, but you've got to eat, keep your lights on. You've got to not be homeless, right? Right. And once you've done that, then, okay, it's just a game after that.

This is Monopoly, and we've got to catch up, and we're behind. We need to pass, go, collect $200 and get after it. So that's the other thing. What are we going to do for your new extra job? Oh, that's what I need, huh? Well, $1,000 a month would change a lot of stuff, wouldn't it? It sure would. And I'm not trying to do that.

I don't want you to work extra the rest of your life, but I want you to work like a crazy person and get this stress off of you because you sound to me like you're getting beat up. Oh, I am. I am. You know, living paycheck to paycheck and even if having to borrow money from family members so let's pretend for a second okay we've adjusted your take-home pay with the 401k we've adjusted it with changing your withholding so that you're

not getting a refund anymore um and you're on a new budget, which is going to make your money work harder. You're going to feel like you've got to raise. Let's pretend that's worth $1,000 a month. Okay. Let's pretend you made, at a part-time job, another $1,000 a month. That would be $2,000. $2,000 a month for 12 months, this time next year, would be $24,000. You only owe $27,000.

Exactly. I almost got you out of debt in a year. Yeah. You can do this. That makes a lot of sense. You can do this. And I don't want you to work extra the rest of your life, but I want you to get your mess cleaned up so you get your life back, okay?

Okay, that makes a lot of sense, Dave. Thank you very much. Hey, hold on. I'm going to give you a Christmas present. It's called The Total Money Makeover. It's the book that will show you how to do every bit of this. And you call me back if you're fighting on this and getting scared and don't know what to do.

That's what we're here for. I think you can do this. You got the chops. Just nobody ever showed you how. And I'm the guy. That's what I do. Tony's on Twitter. Dave, is it a good idea to borrow from my 401k to pay off my high-interest credit cards?

At least I'd be paying myself back. Yeah, but you'd be unplugging good mutual funds that are making 10% to 15% a year, depending on what the stock market's doing, while you pay yourself back five. No, I don't think I want to do that. Oh, and by the way, when you leave your job, because you will leave your job, when you die, get a better job or they fire you, when you leave your job, that loan, if it has not been paid back, will be considered an early withdrawal.

And then you'll get hit just like she was going to get hit. And just like Marjorie was going to get hit, that 10% plus another 20%, 30% in taxes. Never borrow on your 401K. You can stop adding to your 401K, stop adding to your retirement temporarily, but we never cash it out. It's a temporary thing we're doing. We'll just stop the growth of it for right now while we attack these debts. And the way you get rid of high-interest credit cards is you pay them off.

Because my credit cards have a 0% interest. You know why? Because I don't have any. And so it's guaranteed if you don't have any that they don't charge you interest. It's like a law. Yeah. It's a thing. Look it up.

It's a freedom, man. So you need to get the scissors out, cut up the stupid credit cards, get on a budget, stay out of a restaurant unless you're working there. It's time for you to get your mess cleaned up, boys and girls. That's a real fun message at Christmas. Well, the Christmas is for the little children. You adults need to act like adults at Christmas too.

This is the Dave Ramsey Show. show. Thank you. Our scripture today, Proverbs 16.3, Commit to the Lord whatever you do, and He will establish your plans. Max Licato, my friend, says, Don't put limits on yourself. Not every dream will come true, and not every dream is from God. But when your dreams connect with God's plans, you'll find open doors that you never thought you'd see. Max is one of the nicest guys on the planet. LaPortia is with us in Atlanta.

Did I pronounce that correctly? Yes, you did. How can I help today? Hi, Dave. I'm a super fan of your show. I kind of just got on to it. Cool. I'm in the middle of my total money makeover.

I'm on baby step two. So far, I've paid about $3,000 to $4,000 off. Good. I'm working a full-time job. Wow. I recently got engaged so i'm trying to figure out how to get my fiance more on board um i kind of already told him what we're doing i said we're not kind of doing christmas this year you may get one gift if you're lucky um and he's kind of like

oh okay well i'll just kind of let you handle finances. But I know that that could be a big thing if just one person is just handling finances. Yeah, that's not a good thing because you'll end up being his mama, not his wife, doing that. You don't want to do that. You guys want to work together. You don't want to be telling him. You don't want him to be a man. You don't want to be telling him how to do things. You'll be working together on stuff.

You might be the one that does the numbers crunching or whatever, but he needs to be involved in the decisions with you. You ought to be doing them together, husband and wife always. So when are you getting married? We haven't decided yet. Because I have so many, I have the most debt, so I think that's probably why he's like, well, this is kind of your program, not mine.

Because I actually recently graduated law school and passed the bar this past October. Woo-hoo! Way to go! So how much debt have you got? With my student loan, sadly, it's about $260,000. And between my credit card debt and my car debt is about an extra $25. Yeah. So have you landed the new job?

Well, right now with the two full-time jobs, I'm still working at Best Buy. So that's like my 40-hour job there. And then I work as like a contract attorney doing document review 40 hours a week as well. So I do both of those right now. So what are you making as a contract attorney? I'm making $26 an hour. So with the little bit of extra hours I'm getting in. So are you interviewing for a good lawyer position?

Well, right now I've only been getting interviews for a public defender. Oh, no. You can't be a public defender. You have $250,000 in debt. Yeah, but I'm also interviewing for private firms as well. Yeah, you need to be making $70,000 to $80,000 and get started in a regular law firm. On your way to $150,000. You've got to make some money, kiddo. You've got to mess.

You can't take a government position. Public defenders pay, what, 50 grand? Well, in the bigger city, it pays a little bit more. It's up between 64 and 75. But that's it. You're not going anywhere from there. If you get that with a private firm, that's just on your way to 152 years later. So you need to get in some place where you can make some money because you've got to clean this mess up. Yeah. Yeah, as much as you can, where you're working a regular law position of some kind.

And, yeah, as quickly as you can, by the way. We need to get that started because you need the money. Okay, cool. Well, I don't think you have to wait to get out of debt to get married. I do think the two of you need to get on the same page and that you're working together. I'll help you with that. I'm going to pay for part of your pre-marriage counseling. Part of your pre-marriage counseling is I want you to go through Financial Peace University. If I give you that one-year membership that includes the nine lessons,

the nine lessons, can you get him to go with you to the nine lessons i i can get that out of him yeah i thought you could all right i'm gonna pay for it that's your wedding gift from us okay all right thank you all right you hold on and i'll have kelly pick up we'll get you signed up for that merry christmas and that'll get you started on the right foot but kiddo you gotta go make some to go make some money. You don't have the luxury of taking an underpaid lawyer job, even if it sounds like it's romantic or something. Ronnie is in Atlanta. Hi, Ronnie.

Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up in your world? Well, first of all, thank you. Between your show and the EveryDollar app, I finally see a light at the end of the tunnel.

Cool. Good for you. And I want to do something drastic to make that light a little brighter, and I wanted to get your opinion on it. All right. Right now, I have a little about $11,000 in debt left. My goal for next year is to get rid of that.

My biggest, I guess, goal monthly right now is my living. So it's about $2,000 a month by the time utilities and apartment. I actually own a 33-foot boat. And I was actually thinking of ditching the apartment and going living on the boat which only cost me about three hundred dollars a month and that's for docking it you on the boat free and clear yeah boats free and clear it's just three hundred dollars slip rent and normally it's 10 15 bucks for electricity a month okay and uh how old are you? I'm 32. And you're single? Single, yep.

Okay. All right. And what do you make a year? I make roughly around $38,000. Okay. Well, there's certainly nothing wrong with it. This might be colder than crap right now. Yeah, it might be more fun in the summer. But, you know, you live there for six months or something. It would certainly save you some serious money and help you get some progress, without a doubt. I don't think you have to do that.

But if it kind of sounds fun to you, you're a single guy, it's a little bit of an adventure, just live on the lake a little while. I would personally want it to be a little warmer. I love the water. I got boats. I love being on the water. But, no, I ain't living on the water when it's cold. So, you know, you can do whatever you want. The good news is you don't have little kids or a wife or something that, you know,

that you'd be dragging on this adventure with you. So you can go do whatever you want. You can live out there in the cold. You can live out there in the summer, winter. It doesn't matter. I don't think you have to. I think you do have to get on the every dollar budget, and you do have to look at what you can do to get your income up long term and short term uh to be able to address some of these things i think you're making progress you're

going to be okay you'll be out of debt by this time next year even if you don't do this probably it looks to me like you would be you only got eleven thousand dollars in debt left so i think you can make it. But, you know, hey, it's kind of cool if you want to do that. There's nothing wrong with it. And you do have the boat already, and you do have the slip rental already and all that. So, but again, even in Atlanta, that's going to be a bit chilly this time of year. And because, I mean, everything's colder on the water.

You know this. I'm not giving you any information you didn't already have. But, whew, man, something else. Jennifer follows us on as part of our private Facebook group. You ought to join us on this. It's called The Ramsey Baby Steps Community. There's one official Facebook group for us, one official one. There's a bunch of them, but we have one official one.

There's about 100,000 of you in there. The Ramsey Baby Steps community. How do I determine the insurance that I have on a car? In Baby Step 2, I just paid off my car. How do I determine if you keep full coverage or drop it down to liability only? The car is only worth $8,500. You're broke, and you can't afford to buy a $10,000 car if that car gets totaled, so you need to carry full coverage.

If you've got a couple hundred thousand dollars laying in your checking account because you got a lot of money and you could just go buy a car if you wrecked your car then you can choose to not carry full coverage i drive really really nice cars these days and so i still carry full coverage even though i could afford to write a check and replace any one of them and it wouldn't really wouldn't miss the money but i still carry full coverage, even though I could afford to write a check and replace any one of them, and it wouldn't really miss the money. But I still carry full coverage in those situations. But you don't really have a choice in your situation. You've got to have full coverage right now.

Now, you can raise your deductible up, $500 deductible, maybe $1,000 deductible, and see how much that saves you versus how much premium drop do you get versus the risk you're taking, the extra deductible amount, and measure that out and decide if you want to do that. That's not a bad idea. But, no, I think you need full coverage. Hey, thank you for following us on the Ramsey Baby Steps community. 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. Hey, it's Blake, Chief Production Officer for the show, and here's a little tip for 2018. Go download our revamped Dave Ramsey Show app from the App Store. We're always listening to your feedback and adding new features to make it even better. Check it out.