The Ramsey Show - App - A Valentine's Day Debt-Free Scream! (Hour 1)

Episode Date: February 14, 2020

Rachel Cruze, Debt, Budgeting Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is The Dave Ramsey Show, where you learn to take control of your money and create a life you love. I am Ramsey personality, Rachel Cruz, filling in for Dave this hour. He is out and about, so he's letting me fill in in the big chair. So I am here with about probably 150 friends out here in the lobby at Ramsey Solutions. And man, this is such a fun weekend. It's obviously Valentine's Day and the Day of Love. And so we decided to put on our Money and Marriage event here in Nashville tonight. So Dr. Les Parrott and I will be doing an event

all about money and marriage. And so we've sold that out. There'll be about 2,500 people, 2,500 people there tonight in Franklin. So if you're in the Nashville area, there might still be a few seats because sometimes some attrition with events happen. So see if you can still get a ticket or if not, you can live stream from wherever you are all over the world. You can go to Dave Ramsey dot com and get the access code to that. And we've built out really this whole fun Valentine's weekend because this event is all about relationships and money. And we know that marriage can be really hard and money can be really hard. So these two hard subjects were coming together to help give you some solutions on how to do it well.

And so we are adding on different packages for all these folks. So some of them will be coming tomorrow morning back here to Ramsey Solutions for the live taping of the Rachel Cruze Show, which is really fun. We've never had a studio audience for one of those episodes. So we're really pumped about that. And then some of them are going to the Grand Ole Opry, Nashville's finest. Going to go listen to some country music, where it all began. And so, yeah, it's going to be really fun. And Valentine's Day is, again, the day of love. So money and marriage fits perfect right in there. So if you want to give us a call here on the show, and we'll try to do a relationships theme hour if we can. We'll kind of springboard off of this idea that it's Valentine's Day.

So you can call anywhere in the country at 888-825-5225. And again, anywhere in the country, you can live stream tonight's event with Dr. Les Perry and myself. If you go to DaveRamsey.com and get the access code there. All right, well, we'll hit the phones. Starting out is Louis from Florida. Hey, Louis, welcome to the show. Hey, how are you doing? I'm doing well.

How are you? I'm fine. Can you hear me well? Good, yes. Yep, I can hear you. What's up? Okay, great. Well, thanks for taking my call.

I'm calling in because we just got married in July. Okay. My wife is expecting. Congratulations. And I have another kid. Well, we have another kid who's six. Okay.

Just wanted to give you some background information. No, that's great. That's great. Okay. So what can I help you with? Yeah. So right now we're in debt and just wanted to know how to manage our money better. We have over $100,000, about $200,000 in debt for student loans, $1,200, $1,300 in credit cards, and then like another $9,000 in other debts.

This is like car loans, lawyer fees, medical expenses. Okay. Luis, how much did you guys make a year? Our take-home is around $76,000 a year. And another maybe $15,000 from business.

From other business? Extra work and stuff? Okay. So around $90,000. What were the degrees in to go From other business? Extra work and stuff? Okay. Okay. So around 90. Okay. What were the degrees in to go $200,000 in student loan debt? Well, I'm a chemical engineer.

Okay. I'm a chemistry and chemical engineer. Yeah. And she got her degree in physical education and sports, sports admin. And is she, is she working or is she home? She's working. I'm also working as well, but I'm not actually working in my field in sales. Okay. Okay. So what, so what's your question specifically for me? How can I help you? Yeah. Just how, how do we start getting on the same page?

I mean, you know, it's Valentine's Day. We argue about money a lot. Yeah. Like every time we have a meeting, she says that I'm very aggressive and I'm bullish, bullish. Let's talk about finances. Yeah, yeah. Well, I just wanted to know about debt, just how to get out of debt.

Yep. Absolutely. Okay. So a couple of things on the relationship side, you guys obviously are not on the same page when money's talked about. I'm guessing there's a lot of tension, a lot of fighting and a lot of stress because you guys, I mean, yeah, you're in over your heads. I mean, you're feeling these payments where majority of your income is going to debt, and it is stressful. And for your wife, in her perspective, I can tell you the number one fear for women when it comes to money is the lack of security and thinking, okay, if something unexpected comes up, are we going to be okay?

And that's for majority of women, not all, but most women I talk to. And so she probably, Louis, I'm going to say it has a ton of fear right now. She's probably freaking out because she sees this pile of debt. She and her husband are not getting along when the subject is brought up. And there's that tension. So I always tell couples when you're working together, you have to have empathy. You have got to put yourself in the other person's shoes. And she needs to do that as well with you. And so you both have to understand where you are. And you need to talk

about the emotional side of money because that's what motivates us. That's why we handle money the way we do. So you need to understand how she's feeling. And she needs to understand where you're coming from. And so getting that clear communication is going to be key. And the best way to do that tactically is to sit down and you guys need to start working this plan. So my first question for you is, are you guys on a budget? A loose budget. A loose budget. Okay. We're going to call that not a budget.

Budgets around here, zero base. Okay. So which means your income coming in monthly, You need to write out all of your expenses. And the key here is for your giving, your saving, and all of your expenses have to add up to what you're bringing in each month. So whenever the paycheck comes in, you know exactly where it's designated. You know exactly what category every single dollar is going. And download our EveryDollar app if you haven't. Do that right now.

Download EveryDollar and start working that first budget. If you haven't do that right now, download every dollar and start working that first budget and you guys sitting down together. So what usually in a relationship, one of you is a little bit more of like the nerd who enjoys doing everything. Is that more you would you say when it comes to finances? Yes. Okay. So you're going to be good at this. This is in your strength. And usually people like this, you know, and you're a chemical engineer, I think you said, so numbers work for you. So you're going to be able to lay this out well, and then you're going to bring her in, and you guys are going to sit down and talk about it.

And this first meeting, there's going to be some tension, so just prepare yourself, because it's hard. It's hard to look at the reality of where you're at. But once you get it there, then you guys can say, okay, this is where we're agreeing on how we're spending our money. So you've got it. That's the first step you guys got to do. You've got to get on that same page. And then you're going to save up for a thousand dollar emergency funds next. And then your budget, your second line item under giving is saving. You've got to be saving something every single month, get that thousand dollar emergency fund. And then your guys

are going to do the debt snowball, which is where you list all your debts, smallest to largest, regardless of the interest rate, pay minimum payments on everything and pay off that smallest debt first. And so that was a lot of information list. I know you guys are, you feel like in over your heads, but I'm telling you, if you guys can sit down, agree on where the money's going, tactically speaking, and then you start working on paying off debt together, your marriage, you guys are going to unite in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million active members. I'm talking about people who come to LinkedIn

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Welcome back to the Dave Ramsey Show. I am Ramsey personality Rachel Cruz filling in for Dave this hour on Valentine's Day, the day of love. And we talked about it in the first segment, but we are doing our money and marriage event here in Franklin, Tennessee tonight. Lots of people coming in for that. It's about 2,500 of you and some people here in the lobby watching the show, which is just so fun. And so if you want to check out the live stream there, you can at DaveRamsey.com, get the access code and join us tonight. All right, going to the phones is Brianna from Washington. Hey, Brianna, welcome to the show. Hi, thank you for taking my

call. Absolutely. Is it Brianna or Brianna? Just want to make sure I get it. It's Brianna. Brianna, welcome to the show. Hi, thank you for taking my call. Absolutely. Is it Brianna or Brianna? Just want to make sure I get it. It's Brianna. Brianna, good. Okay, perfect. All right, how can I help? Hi, we have a single income family and we have a truck payment

that is actually more than our annual take home pay. And we're looking into selling it. We've been talking to our parents for some advice. They think it's a terrible idea to sell the truck because it is a newer truck. It's very reliable. We have a five-month-old daughter, and we actually just moved to Washington in the past two months because of the military. So we, our family's in Florida, so we're across the country from anyone that we know. So we're not

quite sure what to do because we do have some negative equity in this truck. All right. And how much do you guys make a year? $21,600. $21,600. And how much is the truck? We owe $28,200. Okay. Well, number one, thank you guys for your service and the sacrifice that you guys are making. So just, I appreciate that very much.

Yeah. I would sell the car like in a heartbeat, a hundred percent. I mean, your car, even with the negative equity. Yes, absolutely. Get it out of here because you're underwater. So you may take out a small loan for the difference, but when you're looking at your annual income, I mean, yeah, just the math of it. I don't, I don't care the family situation. I don't care where your family is across the country. I mean, none of that matters at this point. The math is like blaring and yeah, 100% sell the car, but it's something that a lot of people, and I get this as a mom, cause you said we have a five month old. So yes, there is something to wanting to protect your children and all of that,

but I can tell you a used truck will do the exact same thing. And so you can go shopping. It's amazing that what we put in our vehicles, it's like we've bought into a little bit of this fear tactic, I feel like, as a parent, because I hear this all the time from people. Oh, we've got to get a new car because we're having a family. We want to keep them safe and reliable. I'm like, yeah, yeah, absolutely.

But there are definitely safe and reliable used cars that you guys can do. Do you guys have any other debt besides the truck? No, that's it. That's the only one. We paid off everything else. Awesome. Well, congrats on that. Yeah, well, it's kind of a short answer for you, Brianna.

But, yep, definitely go and sell that truck. Man, our cars, it's amazing. I mean, Dave's line at the beginning of the show is the BMW is just the status symbol of choice, you know, versus the paid off mortgage today. And I'm like, and it is, there's something about our cars that we just get attached to that we, again, buy into this lie that, okay, well, we have to have a great, nice car. It has to feel good. I have to feel safe in it. And a used car does the exact same thing. You guys, until you have a million dollar net worth, I want you to buy used all the time.

I just sold my car. Uh, it was 10 years old and we didn't want to, we had to get a bigger car because now we're a family of three and all the kiddos would not, would not fit in our other car. So we did have to sell it, but it was 10 years old. And I'm not going to lie. I like just died a little inside because we sold it. Number one, because I love that car. And then number two, we sold it for a minivan. Yes, we have a minivan now. I can't believe it, but it's true. We do. And I love my minivan. But man, that 10-year-old car, I was like, it ran and ran and ran and ran. I was like, I hate having to buy another car when this one is just fine, but we couldn't fit into it. So logistically with car seats, we had to get a different car, but yeah, it's something with our cars and our attachment, but yeah, Brianna,

I would definitely, definitely get it out of there. All right. Up next is Tina from California. Hey, Tina, welcome to the show. Hi, Rachel. Hi, how can I help? Thanks for taking my call. Absolutely. So my husband and I are working baby step two. We just started going through financial peace again this week. We make about $200,000 a year and our debt is around $173,000. Okay. We are going through the process right now of putting the dog on eBay and the cat on Craigslist. And we've got our plan and we should be able to pay this off within two years. My question is, there is a chance we may lose our biggest clients. We own a business right now, and we are starting to get business in other ways to kind of protect against that loss. And I'm wondering if the money that we've started making from selling off our stuff, we should hold on to until we're over that hurdle or if we should just continue with attacking the debt snowball.

So you guys own your own business? Yes. That's correct. Okay. And a large client, you're afraid you're going to lose. Yes, this year. And are you sure on that or it's just you're hearing rumblings? Like what's the reality of that actually happening?

Hearing rumblings, but we also acknowledge that it would be better for our business if we were able to kind of diversify where our money comes from. Yeah, absolutely. Well, and you'll know by the end of the year. Is that what you said? Yeah. Okay. So yeah, so the rule of thumb for listeners out there is to get that $1,000 emergency

fund, everything else you're throwing at the debt. But we do say that there are times to pause the debt snowball. Number one, if you're pregnant, that's one thing we say. If you're starting a family, go ahead and pause, stock, pull money. And then also, if there is a chance that you're going to be losing your job and you know that that's going to be happening. And then we say, okay, there's a time to pause that and to pile up. So this is not obviously you guys losing a job. You are losing a large client. So I would be okay if you pause it for a little bit, set some money aside. But once you guys get to the end of the year, I would continue to be gazelle intense.

But a portion of it, you just put in savings as just a bigger buffer. But everything else is going to the debt. Like you said, the cat's on Craigslist. I mean, you're going nuts. And everything else is going to be going toward paying off this debt because you guys do have a goal that you can do it in two years. And then when you get to the end of the year, if you have not lost the client, then take the money that you had stockpiled a little bit and throw it back at the debt and then just keep going.

So hopefully your timeline's not going to move, if that makes sense. Now, if you lose the client, then your numbers, you're obviously not going to be making $200,000, and your numbers are going to have to shift. But do it at that time. But I am okay for a little bit more going in that savings, but staying gazelle intense with everything else. Because again, if you lose the client, you lose it, but then also you'll be able to still hit that two-year mark with your numbers. So, well, the good thing is you have a big shovel of 200 grand because 173,000, it is a lot. And I'm assuming most of that was student loans.

We're seeing like huge numbers on debt now. It's not just the credit card debt and just the one or two car loans. I mean, the student loan stuff is, it's completely out of control. It's wild. All right. Well, we are again doing the money and marriage event tonight here in Franklin, Tennessee. So those of you, you can go to DaveRamsey.com for the live stream. And this is always a great topic, especially on Valentine's Day, when it comes to money and marriage. So if you all have a question, you want to call in on the show at 888-825-5225 and ask your relationship question. Make sure to dive in on that. There was a study that came out from CNBC that 53% of Americans have kept money secrets from their partner. Yes, we consider that financial

infidelity is what it's called. And this is everything from hiding purchases and receipts, lying about the price of something, spending money on children behind the spouse's back. I know that's easy to do, but that's still a no-no. You still got to tell them. Purchase. You said that the purchase was on sale, but you actually paid full price. Withdrawing money from savings, getting a new credit card, covering up debt, or hiding a raise or bonus. 53% of Americans have admitted to doing one of those things. And I'm telling you, you guys, you are never going to win with money if you are not on the same page with your spouse. If you're married, you have got to work together.

And when I see stats like this, it drives me crazy because I'm like, man, obviously there's trust issues. There's something else behind these numbers, something else going on in the marriage. That's just not, and it just happened. But to work on your marriage and to work on your money and you guys getting on the same page is so, so crucial to be unified on the subject. And again, we're talking all about that tonight at the events. Live stream, buy your tickets at DaveRamsey.com. Happy Valentine's Day. Talking about financial infidelity, but it's the reality of where we're at.

This is The Dave Ramsey Solutions on the debt-free stage is John Andre and Joanna, and they are here with us. Hey, you guys. Welcome to the show. Hey, Rachel. So excited to have you in. Okay, this is like a first, I think, for both of us. Yeah. This is the first debt-free scream that Dave Ramsey is not doing, so I hope you're okay with that. No, we're fine with that. We love you, Rachel.

Thanks, guys. Okay. Well, I'm pumped to hear your story and where you guys are at. You have an incredible, obviously an incredible story because you wouldn't be on that stage if you weren't, but you're here to do your debt-free scream. So where are you guys from? Portland, Oregon. Okay, awesome. And how much did you pay off? We paid off $24,918 in 18 months. There you go. We'll round it up to $25,000. That works.

Yeah. And how long did it take you? 18 months. Oh, you said that, 18 months. What was your range of income during that time? It was $50,000 at that time. Okay, perfect. What is it now?

Did it change? Yeah, it's $80,000. Okay. What was the jump? Well... We moved from Seattle a month after we got married. Okay. So in July of 2018, and we moved to Portland to be closer to one of our families. His family's in Alaska. So we moved closer to mine in Oregon and got better jobs and better living. It's cheaper living than in Seattle. For sure. For sure. Okay.

All right. So the $25,000, what kind of debt was it? Mostly my student loan and then some of his credit card. Yeah. All right. The old student loan. Yep. Private college.

Oh, right. It'll get you. Yeah. Okay. So what happened to you guys 18 months ago that caused you to do something weird and pay off debt? Well, first and foremost, her dad is an FPU coordinator. Whoa, and you got into debt having an FPU coordinator. Like, it's in your blood, bro.

And he never told me I had to take FPU, but he did let me know that it would be beneficial for my health if I eventually took FPU. But when we got married, I married my absolute best friend. And I don't know if this is ignorant of us or maybe it's a little dreamy. But I honestly think, even though we're young, I think that in marriage there's things that you can prevent from happening. Or maybe hardships that you can possibly prevent from happening and when we talk to young people or people who have gone through a divorce or they're in a rocky marriage money is typically one of the key factors so we thought and we talked about it if we can eliminate this from our lives this issue with money then

why why wouldn't we do that so So we just got on the same page. So in the fall of 2018, we took FPU and that just launched us into getting gazelle intense and believing that we could do it. I think we didn't think that we could do it in 18 months, but we did. But you did. Absolutely. Okay. So how long have you guys been married? 18 months. Okay. So right when you got married, you took FPU. Yeah. And we paid off the last of my student loan on December 31st of 2019.

Can I ask how old you guys are? I'm 28. 26. Oh, nice, nice, nice. Man, I look at you guys and I'm like, okay, here's a couple. They haven't even hit 30 yet. You're 18 months into marriage, and you have no payments. No payments.

Completely debt free. So what would you say was the key of getting out of debt together? Because you're newlyweds at the time. So you're transitioning life, right, within living separately, obviously, lives. Coming together as one. So you're newly married. And you guys do this. So what is the key?

I think, like John and Jerry said, you just got to have really good communication and you got to keep your eye on the prize and you got to be in it for the long haul. You know, it's not an instant gratification like so much is in our world today. You got to stick with it and you got to like, you know, there are points that he was, you know, down about it. I'm like, how are we going to do this? And then points that I was. So it's like you have your teammates lift you up, each other up when you're feeling discouraged about it. And, you know, we just put all of our determination and all of our heart and all of our mind into it. And, yeah, we were determined. You have to want it bad enough to work hard enough to get it done.

Absolutely. And I think that a lot of people don't want to potentially take the first step or whatever it may be because it's out of their uncomfort zone. Yeah. But when you want to reach any form of success, you have to go through being uncomfortable, uncomfort first. Right. And then for us, I mean, faith is such a big part of our lives. I mean, we we love God. And one thing that we're very passionate about is, you know, we pray for God to give us abilities that are equal to the opportunities that he wants to provide for us, not really the other way around. So when we pray for stuff like that, he just shows up,

and he puts in a work ethic in us that, you know, wouldn't have been there otherwise. And then sacrifice. We sold our car. Yeah, we have one car and it's 2010. And you did. There you go. We talked in the last segment about cars. So you're a living testimony that you can have a great used car.

Yeah. You guys have one. So you're a one car family. Yeah. He takes public transportation to work and then I use the car. Wow. So you guys are weird. Officially weird.

Yeah. Okay. So do people make fun of you when you're a one-car family? Not really. Not really, no. Because, I mean, we live in Portland, so so many people take public transportation. Did anyone make fun of you during the process?

Any friends, any family? As you guys were sacrificing to pay off the debt? I think friends just didn't understand, you know? And I don't think they understood how your behavior can change that much and that you can desire the freedom of financial peace and being debt-free that much the fact that we don't have credit cards people think that's yeah that's really like how do you buy a house you know yes so people think

that's weird absolutely oh well you guys you're amazing you are wise beyond your years as you're standing here in front of me and i'm like you you're doing it I mean you are you are living exactly what we teach day in and day out and you're proof okay so how did it feel when the last check was written the last payment was paid what was the feeling it was emotional and completely freeing and a weight lifted off and just like like what else can we do we did this in 18 months like what else can we do? We did this in 18 months. What else can we accomplish when we work together and we're determined to get something done? Yeah, it's like a light bulb went off like a switch, right?

We did something that we thought was impossible. We only thought that until it happened, right? So now that we've completed this mountain, to us $25,000 was a mountain. To some people that might be small, but to us that was a mountain. Since we got that done mountain. To us, $25,000 was a mountain. To some people, that might be small, but to us, that was a mountain. Since we got that done, like she said, what else could we possibly do? So now we're constantly dreaming and talking about what's next for us. So, yeah.

Do you have any plans for what's next now that you are debt-free? Well, we're saving our baby step three. So saving up money, 36 months. We wanted to wait to start a family until we are debt free. So that will be on the horizon. Yeah, sure, sure. Well, you guys are absolutely incredible. I mean, you are literally the living testimony, the textbook of what to do as a married couple,

working together, accomplishing something you thought was impossible, and now you're stronger than ever within your marriage. Well, I'm so proud of you guys. I'm so thankful that you were able to share your story. So we have a copy of Chris Hogan's book for you guys, Everyday Millionaires. And that's the next chapter of your story, working to become a millionaire. All right, John Andre and Joanna, you guys paid off $25,000 in 18 months, making 50 grand a year.

Let's hear your debt-free scream. Three, two, one. We're debt-free! We're debt-free! Wow. Absolutely incredible. Absolutely incredible. Absolutely incredible. I mean, again, you guys, this, this is what it takes. I mean, you heard it in their voice, the determination and saying, we have this goal and we're going for it. Sometimes it's hard. You feel that speed bump every now and then, but you push forward. And the faith element

of your story, I love as well. I mean, those people that don't know the peace that God brings you with debt or without debt, that ultimate peace, but the strength and determination to get through that journey together is just, it's remarkable. You guys are not going to be a statistic, right? One of the leading causes of divorce in America today, money fights and money problems. And you might have a money fight here or there. I'll tell you that. Some of us ladies like to spend some money and we got to get with the husbands and talk about the budget every now and then for sure.

But never again will it be a stress point. You guys, you're free. You have no payments. You get to do whatever you want to do. Your income is yours. So congratulations. You have no payments. You get to do whatever you want to do. Your income is yours. So congratulations. What an incredible story. What a hopeful story for people all across America. This is The Dave Ramsey Show. Thank you. Welcome back to the Dave Ramsey Show. I am Rachel Cruz, Ramsey personality, filling in for Dave this hour.

All right, going back to the phones. This is Daniel from Wyoming. Hey, Daniel, welcome to the show. How's it going? Doing well. How are you? Oh, pretty good. Pretty good. Good. How can I help? Yeah, my wife came into a pretty good amount of money through an inheritance here a little while ago, a couple years ago, actually. And we kind of went from not very much money to a pretty good chunk sitting there. And we've had a really hard time figuring out what to do with it. Sure. How much is the inheritance?

Like $500,000. Okay. You guys have any debts? We probably had. Oh,000. Okay. You guys have any debt? We probably had. Oh, sorry. Go ahead. No, we're debt-free. Okay, awesome. Fully funded emergency fund of three to six months of expenses?

Okay. And funding retirement as well on an annual basis? Yes, yes. So you guys, house paid for it's the next step uh so that's part of the question is uh we're ranchers and the house we live in is uh is owned by the the ranch and um part of our hang-up is uh we'd like a new one but at same time, our other big goal in life is to be able to let one of our kids come home and work with us. And we're a little bit afraid if we do the house, then it will hurt the chances of being able to expand and giving the kid an opportunity to come home. So we're having trouble weighing opportunity costs on, on, um, which way to go.

Okay. Absolutely. Uh, how old are the kids? Seven, five and two. Oh, okay. So this will be them working a decade from now, two decades from now. Yeah. Yeah. We, we have a little bit of time. Yes, for sure. Yeah, absolutely. And then the question obviously would be coming from a daughter working with her dad is, do they want to come and work at the ranch? Right. Like that's always the good question. Right. So that's still an unknown. Give them the opportunity. Yeah. Yep. For sure. So what would stop you guys if you did

go buy a house and then they come on in 15 years, what's the amount of money that you're scared you're not going to have in order to give them the opportunity to come help? Well, the next place over next to us just came on the market, and they want $5.5 million for that. So it's going to take a lot of money to expand. And I hate to say it, I'm a little ignorant when it comes to ranching. So help me out, Daniel. What causes them not just to come work with you guys? What makes them have to have their own ranch? Well, they wouldn't have to have

their own. It's just this one isn't big enough probably to support two families. Of income. And income. All right, I'm tracking you. All right. But a house is a dream for you guys to go buy. Yeah. I mean, it was always something we never really thought about before because we didn't really think we'd ever have the cash saved up to just build one.

So it kind of came afterwards. But the kids are little, and this house is small. We're pretty crammed in here, and it's got – I mean, it's an old farmhouse. They have problems. Yeah, for sure. That's what we're running into, yeah. Okay. Well, it's a personal choice at this point, Daniel,

but, I mean, the way it's sounding, that the house is probably a logical next step for you guys. And I'm assuming hopefully you can help cashflow that with this $500,000 and step into that because the whole, the adding on another ranch for kids that young that far in the future is still up in the air, right? That there's no basis for that right now. So for you guys, I would, I would go ahead and look for a house, um, for sure. And, and use that inheritance because that's a beautiful way to continue on that legacy for whoever left that for your wife, that you guys get to, to raise your kids in a, in a home and, you know, be able to, to cashflow that hopefully. So I hope that answers your question. All right. Next is RJ from California. Hey, RJ,

welcome to the show. Hi, how's it going? Doing good. How are you? I'm doing great. Great. How can I help? My question is, well, I just finished baby step three of saving up three months of expensive and I have 5,400 saved. Yeah, I have 5,400 saved up. And I'm wondering if I should increase that because rent in California is expensive. And if for some reason I have to leave my room, it goes up dramatically. And I'm just wondering if I should prepare for that future. Yeah, for sure. Are you married? Family? Single? Nope. Single. Living out here. My family is all the way across the country. And yeah. For sure. Well, honestly, you're kind of in the boat that I would say, because again, it's the three to six months of expenses is the range.

And so usually I find people are in the six month boat if they have multiple kids, if it's job, you know, maybe they freelance and they don't have consistent income. Things are a little bit more up in the air. There's more people dependent upon their income. All of that, more people kind of end up in that six-month boat. You're a little bit in the boat where I always say, hey, if you're single, you don't have kids. You live in California, so it's expensive for sure. But you're doing it. I mean, you have three months of expenses saved.

I would be comfortable for you to continue on to baby step four, five, and six if you want to. But you were saying you're thinking possibly about moving. Is that what it was you said when you leave? Yeah. I mean, I would like to move out eventually into my own little apartment. But right now, that's just not in the budget because you guys say no more than a quarter. And there's no way I can afford more than $600 for rent, and that's just the room right now. For sure, for sure, yeah.

California, it's an expensive one out there for sure. Yeah, well, if you know that that's in your future, then we always say, too, that saving up for a house is baby step 3B. So you could have your emergency fund on the side, save up a little bit more, and know, okay, this could go towards rent in the future if you want, and then move on. But I think that you're in a great boat. So if I were you, you can go ahead and move on. But if you're feeling the itch to move, especially in California, because it is so expensive, then that's maybe step three B. That's what you would do next after the emergency funds. But great question, RJ. Great question. All right. Zach from YouTube asks, would you really consider any type of debt good debt? No, Zach, I wouldn't. We're kind of black and white on the issue here when it comes to debt, because what debt does, my friend Chris Hogan always says, debt's a thief. And I love that

line because it is. It steals not just your income from you, but it steals your peace of mind. It steals your sleep at night. It steals your freedom. It steals your choices. It steals your options. When you are in debt, scripture is very clear. The borrower is slave to the lender. You're slaved to your payments. So if you want to quit and be a stay-at-home mom, but you have two car payments, credit card bills, student loans, and you can't survive without your income, you don't have an option at that point. You have to go to work. If you want to go take a great vacation and you want to be able to use cash with it, but you can't because it's all going to payments, you don't have that option. It limits your life is what it does. And so I'll have the asterisk that the one type of debt we will not completely yell at you for is a mortgage, but doing it in a more conservative route, a 15 year fixed rate

mortgage where your payment is no more than 25% of your take home pay. And so that that's the one type of debt we're like, okay, you know, you've got to get it paid off in 15 years though. Don't mess around with the 30 year mortgage, but focusing on that. So the whole, the whole debt discussion, again, pretty black and white for us. Uh, and we are a culture, you guys, that it's just so normal, right? Everything from the credit card, the car loan, the student loan, all of it. It's just like, yeah, it's just like what you do. And that's just all normal. It's so normalized. But the crazy thing is if you go weird and you say, you know what? I'm not going to be normal. Normal is 70% of Americans are living paycheck to paycheck. Normal is marriages

that are being completely destroyed because of money fights and money problems. The amount of stress on people, they wake up and go to a job they hate to freaking pay credit cards and American Express and their student loan. It's out of control. And if you could just imagine having no payments, no payments, what you could do? What could you do if you had no payments? Anything you want. Because you have no payments. It completely frees up a space in your spirit that you can dream, you can go, you can do. And the level of stress of you not owing anyone anything

gives you that freedom. So, Zach, no good debt here. Absolutely not, man. Well, thanks to our producer, James Childs, and Madison, who's filling in for Kelly on the phones. And thank you, America. This is The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section.

Thanks for listening.