The Ramsey Show - App - Advice for Budgeting While Living in a Foreign Country (Hour 1)

Episode Date: November 12, 2019

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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. Thank you for joining us.

Open phones at 888-825-5225. That's 888-825-5225. Starting this hour off is Joanna in Russia. Hi, Joanna. How are you? Hi, Dave. Thank you so much for your time. I really appreciate it. You can call me Johanna. It's not pronounced the way that it's spelled. No, not at all. It's an interesting ride, that's for sure, being in Russia. But I've got a budgeting question for you. I have been now doing the every dollar budget for three months. It's taken me about that long to work out the kinks. It's a bit of a curiosity navigating my budget being paid once every 60 days, but I think I've got that figured out. But I'm still very much open to

suggestions about how to improve that. What I don't have figured out is how to navigate my every dollar budget, which is in USD, when my life and all my expenses and all my receipts are in Russian rubles. The best I can do right now is pulling cash out of an ATM, but I don't have a budget for that. I need help. Please help me. Okay. Well, you know, obviously every dollar is not built for the Russian monetary system. But the, so I guess you could, I mean, you can, it would be pretty laborious,

but I guess you could convert each, you know, enter it as if it's U.S. dollars and just act like that and use the appropriate conversion. In other words, don't enter U.S. dollars, enter Ruples into it, and just use it that way. I don't know why that wouldn't work. It would still do the math. Yeah, that's true. That's a really good thought.

The trick with coordinating it with my bank is that it takes usually 96 hours to post, and there's always a difference between pending and post in final amount. Oh, absolutely, especially when you're in an international situation like that. Some of the U.S. banks, I mean, if you're sitting in the U.S., it might take 96 hours, too. That might not be any different, depending on the bank. But that's the bank transaction, and that would be the use of a debit card and how long, whether they've got a hold on it

or whether they've actually processed it through. And that has to do with how the banks report back to us. We don't get to control that. And so, you know, what you've got to do is you just have to manage that in real time versus what is pending. Because in your mind, really, once you show something is pending, you've really spent that money. It's just a matter of they haven't run it through.

They have to let it sit there. And so it's going, you know, you spend $50 at a restaurant, it shows pending, but it's not really. You've spent the money. It's going to go on through. The only reason they're parking it is the uh the debit card regulations and uh and so they're the banking regs and i assume you're it sounds like you're tied into a u.s bank on that so that's probably not going to get any better until uh we find a

workaround with the banking regs that allow us to show pending as a real-time transaction and uh got a couple things on the whiteboard we're messing with, but it'll be a while before you actually see a way to do that. So, meantime, I think you can just use the math as if it were USD, but it's not, and use the currency that you're actually working in. Hey, it's an honor to speak with you. Thank you for calling in. Megan is with us in Texas. Hi, Megan. How are you? Hi, good. How are you doing? Better than I deserve. What's up?

Good, good. I have a quick question for you. So I am 24. I'm debt-free thanks to teaching and help of you and my parents. But my question is, how can I best be of a resource to my friends who are my age who have crippling debt? How can I help them, coach them, or help them with their finances so that they can break generational cycles of debt as well? Are they asking for help? They will ask for help. and then i get really excited and so then they ask more questions so it's not me forcing it upon them but that that that works fine and because i don't i don't give advice to people who haven't asked for it right uh because it generally doesn't work those convinced

against their will are of the same opinion still so i've got lots of friends that don't ask my advice because they know what it's going to be and they don't want to hear it and so we're just friends and we don't talk about the stuff that I know more about than they do. So it's okay anyway. This stupid butt still using a credit card, you know, but I mean, it's all right. It's okay. Whatever you want to do. But if they ask, then what I always do is a couple things. One is, and I do it here on the air.

You hear me do it if you're listening to this show, is I try to find out what their primary lens that they look at life through do they look at life through an academic lens a spiritual lens are they a person of faith and they really gauge things through the lens of scripture do they look at it through a relational lens how it's going to affect the other people in their life we all are concerned or most people are concerned about all of those but we all have a primary one and um and uh and at different times in my life and in different situations i may use different lenses but if this is a person that you've met at church for instance and you're good friends with them and you're in a bible study with them and you know that they're a strong person of faith and they really care what the bible says about this then you can say well the Bible says this about that.

You know, the Bible says this about debt. The Bible says this about budgeting. And if they're a person that is concerned about the academics, then you can start to show the mathematics of the benefits of doing a budget or getting out of debt or, you know, what are the data points on the people who became everyday millionaires? And so you answer the question through the lens that they're most likely to hear the answer. And I don't mind. I can do any of those because I like all of them. But it's just, what is your primary way of looking at things? And so, you know, someone who's not a person of faith, not a Christian, doesn't care what the

Bible says about it. And so the Bible says it doesn't mean anything to them. As far as they're concerned, that's an Aesop's fable, right? And so it doesn't mean anything. That's not a point of reference for them. But walking through the mathematics and you start going, look, here's how this works, and here's the psychology of a behavior-based system for a behavior-based problem, and you can walk through that, and you're just meeting them where they are and so uh that'll work fine so just kind of listen and uh the other

thing i do is i i uh not on the radio but in a personal setting is if even if someone's not asking uh you're always free to tell your story about what happened to you and say, you're not telling them anything what has to happen to them and you're not judging them or condemning them on what they're doing. You're just saying, hey, here's what happened to me. I did these stupid things. I had this pain. I was in a problem and I started doing, started using these financial principles and it turned

my life around and I got out of debt and now I've got money and now I don't have stress and I got financial peace. Two words that don't go together like airline service and this, you know, and you can just talk about your story and no one can really argue with your story because it's your story. This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet, but they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that

one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen. Their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible.

It really does make you the hero of your story, and it puts you on course for better things ahead. Carl's with us in Idaho. Hey, Carl, welcome to the Dave Ramsey Show. Hi, Dave, how are you? Better than I deserve, man. What's up? So, Friday, my wife informed me she wants to separate, and I'm just coming to terms with that. But I

figure neither of us have enough to buy the house out from each other, so that's going to have to sell. And with that, and only owing all my car left, I know how I can turn this into, after I get the equity out of the house, turn it into being

debt-free. But my two objectives that I'm having a hard time figuring out is when I do buy a new house after this, how to go about it the Dave Ramsey way correctly so I can get my house paid off soon and be back to debt free. And we have a few thousand dollars, about $5,000, just kind of in a bank account for our son's college we've been saving. And I didn't know what a good way to put that somewhere where neither of us could draw it. What would be a good kind of investment thing where it's not a liquid asset so that we're both on the same page and good with that?

Do you have any suggestions on either of those things? How long have you been married? A little over 10 years. And she told you this Friday, and you've already are working the details of a divorce? Is there nothing to be done to save it? No, no, it's still fuzzy. I'm, what's that?

Now I've been, we've been, you know, not doing well for almost a year now, and we've tried couples counseling, and I was not able to get her to finish it with me. I can't hear you. You've got your hand over the phone. It's muffled. I'm sorry. Can you hear me better now? Yeah, speak directly into your phone.

So what happened? You said you tried couples counseling. What? I've been really trying to get her to couples therapy over this. She doesn't want to do couples therapy. That's one of the things, you know, I can't force someone to actually participate, you know, even to get them to go. Have either one of you seen a marriage counselor?

Yeah, I've been trying, but she won't. No, neither one of you have seen one. You tried to get her to go with you, but you haven't gone either. Yeah, no. A few months ago I got her to go to a couple of sessions and, um, she didn't get into it too much and really well and didn't want to finish it so yeah i wish it could be saved yeah okay because a divorce is not only uh divorce is not only expensive it's also unbelievably painful and so um try to do everything we can to avoid those

situations that's why i was asking. But back to your question then. Yeah, once the decision has absolutely been made, then a divorce turns a marriage into a business transaction, an adversarial business transaction. And so it just becomes down to decisions like you're saying. We sell the house and we'll take the proceeds from that. What do you do with the kid's college fund and so forth? And the divorce decree can state that the kid's college fund is to be left in control

of either one of you or requires both of your signatures to be moved or something like that. And, you know, I would just have that in a 529 in a series of growth stock mutual funds like we always recommend. As far as buying a home later, once you get everything finalized and you've got your own place, you would work through the baby steps. You're 100% debt-free at that point, which is how you describe what would happen. And then you'd have an emergency fund of three to six months of expenses, and then you want as big a down payment as possible on the home,

and you don't buy a home where the payment is more than a fourth of your take-home pay on a 15-year fixed-rate loan. And that puts you into a conservative property then that you can pay off fairly quickly. Typical person working our stuff pays off their home in seven to ten years, a lot of them in seven. The average millionaire in our millionaire study pays off their home in seven to ten years a lot of them in seven the average millionaire in our millionaire study pays off their home in 10.2 years and so we see that as a data point in the people who become millionaires from nothing getting their home paid off is one of the big parts of that and so that's exactly how it works hey thanks for the call open phones at 888-825-5225

william is with us in new york hi william how are you hi dave thank you for taking my call sure what's up good good i am planning to retire at the end of this year and i will be receiving a pension and i have an option of taking money out from this pension. If I do take this money, it's going to reduce my monthly income, and I was wondering what would you recommend? Well, I wouldn't take it out and burn it. I would take it out and roll it into an IRA, into some mutual funds.

How old are you? I am 53. Okay. And if you take it and roll it to an IRA, it reduces how much you would receive monthly? They don't do a lump sum and just take the whole pension? I have an option of taking like 90% of my pension. It would reduce it about $3,000 difference here. Yeah. Why can't you take 100%?

No, that's how the plan is set up. It doesn't allow you to take the full amount. That's weird. Okay. I mean, it's weird that they let you take nothing but 90 and not 100. Okay. So here's the thing. Yeah. but okay so here's the thing yeah the the amount that the pension is paying you

monthly is calculated on six and a half to seven percent by regulation and so when you tell me three thousand dollars um uh you know a month that tells me thirty six thousand dollars a year divided by 0.07 tells me what your pension balance is, okay, because that's how it's calculated. And so you can make more if that same amount of money were invested in good mutual funds and were paying you 10% to 12%. It's going to give you more money than you would have gotten if you were in, you know, getting 7%. The other thing is the amount of money

that's in your pension when you die dies with you but if you take 90 of it out and move it to mutual funds and a Roth I mean in an IRA a direct transfer rollover IRA where there's no taxes involved and you die well that IRA is yours and it goes with your estate. And you have a beneficiary named on it. And it goes to someone. The money's not lost. So you're worth more alive and dead if you move the money. That's what it comes down to. And so I would roll it as much as you can to good growth stock mutual funds

and a direct transfer rollover IRA, traditional IRA, no taxes, and let the thing sit there and grow. You can't tap into it until you're 59 1⁄2, but I'm assuming you're not doing nothing from 53 years old on. Hopefully you're not planning on sitting on your butt for the next 40 years. Hopefully you've got something to do to earn something. I mean, you ought to be out you ought to be about the business of doing your encore career your next act take a bow let the curtain go up and

then go do something fun you know that you always wanted to do so that's what i would do it's what i am doing i'm a little older than you i'm still working so don't have to haven't had to for a long time but this is because i want to do what i do i'm having a blast so anyway that's what i would do i would leave my hands off the money and i would roll it anytime you've got a pension because it'll make you more while you're alive and it'll make you more when you're dead but a direct transfer rollover is what you're looking for open phones at 888-825-5225 if If you want to check your kids' gifts, or at least some of them, off your Christmas list before Thanksgiving, plan ahead.

Find a present that makes learning about money fun for kids. Well, this week only, you can shop our kids' sale and save up to 63% at DaveRamsey.com. You get Financial Peace Junior for only $18.99. It has all the tools to teach your kids how to make smart decisions with money. at DaveRamsey.com. You get Financial Peace Junior for only $18.99. It has all the tools to teach your kids how to make smart decisions with money. You can upgrade to our best-selling kids bundle, the Adventure Pack, for only $45.99. And that's got the fun educational storybooks plus tools, activities that your kids will love.

We also have the perfect gift for teens. Our Teen Entrepreneur Toolbox will help your teen start their own business. It has everything your teen needs to start making money. DaveRamsey.com or call the Ramsey Concierge Team at 888-22-PEACE, 888-227-3223. We'll see you next time. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Haley is with us in North Carolina. Welcome to the Dave Ramsey Show, Ailey.

Hey, Dave. How are you? Better than I deserve. What's up? I am just wanting to know if you think if we should refinance our mortgage. Long story short, we have a five-year arm at currently 4.25%. We owe 217 on it. And we also have a HELOC, which we owe 25 on, and it is also currently at 4.25%. We have about 15,000 left in our debt. And our adjustment period is June of next year. So if you feel like we should refinance, should we do that now? Should

we wait until June when we'll probably be debt-free except for our mortgage and our HELOC? Have you, has it been through one adjustment period? How long have you had the mortgage? Five years will be June of next year. Oh, this will be the first adjustment? It will be, yeah. We just live in a hot market, which is how we have the equity in our home. Okay. Well, almost all the adjustable rate mortgages, the ARMs, are started below where the index is above the market. Now, what that means is you have an index that this is tied to, T-bills, the LIBOR. It's tied to something, okay? And when they set that index originally, it was to set your original rate.

The difference between your index and your rate tells you what it's going to adjust. It's like two over LIBOR or whatever, right? Right. What have they got your set on do you know i believe it can go up two percent no no no that wasn't what i said what do you know what your index is that gives them the amount to adjust it by no okay typically the rate interest rates would have had to have gone down that they artificially set the margin closer than it will be after adjustment all that means is is that the index that they use to decide how

much to adjust the interest rate that it whatever whatever you're using a t-bill would have had to have gone down during the five years for you to have the same rate so if interest rates were exactly the same now as they were five years ago, which they're probably not far off of that, your adjustment will go up even though rates are the same because it started artificially below your spread. All that to say, yes, you need to refinance, okay, because your rate's going up and your rate's going up in june and you're probably going to see a five or a six percent interest rate

in june and that's in a three percent interest rate world so i would get in touch with churchill mortgage and look at a 15 year fixed i'd roll these two things together get rid of the arm. Get rid of the home equity loan. Put them all together on a 15-year fixed, and you will save interest today, and you for sure will save interest after this would have adjusted because it starts in the hole, and it typically, you know, again, would have to have gone down for you to break even on the adjustment. So, hey, thanks for the call. Open phones at 888-825-5225. Now, let me explain what I mean.

So an index is what they use to judge how much to go up on the rate. Whatever the index moved is how much your rate would go up. So if the index went up 1, you'd go up 1. If it went up 1.25, you'd go up 1.25. And the index is in your adjustable rate mortgage paperwork, and the spread over the index to determine your interest rate is in the paperwork. So if you're 2.59, which is not unusual, that's something you'll actually see above the index, then you would take the index, whatever it is at the time of adjustment, plus 2.59. And so if it's adjusting based on T-bills and T-bills were 2%, you'd add 2.59, and your interest rate would be 4.59.

And that would determine the deal. Now, what happens is that they set you up artificially low to get you into these arms. It's a trap. It really is. So they'll set it up at like two over the index and so the index would have had to go down 0.59 in order for you to end up with the same interest rate and so they would have set you up like two over t bill and then when you get ready to adjust it's 2.59 over t bill at the adjustment point so the rate would have had to have gone down by that 0.59.

And that's about what you'll experience. There's about a half a percent gotcha, gotcha, gotcha, hooked you, bribed you into doing an adjustable rate, and then smacked you in the head for doing it at the adjustment point. And that's what's going to happen. And that's what's going to happen to her that's what's going to happen to her. That's where she's going to be. So if you have an adjustable rate mortgage and it is not yet adjusted,

you are not at the actual spread that you will be at after the adjustments. And from the first adjustment on, you'll always be at the spread that's in your contract. So yet another reason not to do adjustable rate mortgages. But these are the lowest interest rates in 50 to 70 years. And the last time we saw interest rates like these, other than the last decade, was 50 years ago in the 1960s, 60 years ago. And you didn't see these 3% and 4% interest rates. Never saw them in the 70s, never saw them in the 80s, never saw them in the 70s never saw them in the 80s

never saw them in the 90s and so you you have to go back that far so if you've got the lowest interest rates in the market today in the last 50 years where the flip do you think it's going to adjust down is really not a statistical probability it's's going to adjust up. So never take out an adjustable rate mortgage, particularly in a low interest rate environment. You're betting good money after bad. And really what it comes down to is you bought an adjustable rate mortgage, every one that does, because all you were concerned about was how much down, how much a month. Broke people ask how much down, how much a month. Rich people ask how much.

And how fast can I get this paid off? Not how long can I stay in debt and pay the least possible payment and buy a house I really can't afford. Now, I'm not yelling at her about that, but I'm just telling you, if you've got an adjustable rate mortgage, that was probably your motivation. You're buying a bunch more house than you could afford, and you just wanted the lower payment to have a little wiggle room, have a little margin.

In case something goes wrong, I've got a little room, and I don't want to get in trouble. Translation, you're buying crap you can't afford. Now, if you have an adjustable rate mortgage, that's the reason not to take one. But if you have one, it's time to refinance. Right now, call Churchill Mortgage. Right now. I mean, these rates are freaking ridiculous right now everybody walks around acting like we're you know this is just it's just man these just interest rates are always going to

be this way they're not always going to be this way i would go grab that interest rate by the throat and tackle it and keep it if you're gonna see if you're if you have a mortgage like it's gonna be of several years for you to pay it off you have an adjustable rate you have a mortgage, like, it's going to be several years for you to pay it off, you have an adjustable rate, you have a balloon mortgage, you've got one of these stupid second mortgages like this that you need to roll into something and get rid of the ridiculous rate and a variable rate on that as well, then this is the time to do a refinance right now. Ready, set, go.

Call Churchill Mortgage right now. Go to churchillmortgage.com right now. Not an ad for them, folks. It's just the way it is. This is the deal. So I got out of college in 1982. I had sold real estate all the way through college. I got my real estate license in 1978.

When I got my license in 1978, rates went in September from nine and three quarter to 10. Jimmy Carter came into the presidency. Inflation was out of control. The nation went nuts. Rates went from 10 to 17 before I got out of school. When I came out of school in 1983, 82, 83, I was selling houses, and we got the first, some of the first adjustable rate mortgages were available at 12%, and a fixed rate in those days was 14%.

And you got 3.2% available today on a fixed rate 15 year. Shut up. This is when you refinance. This is the Dave Ramsey Show. Thank you. Thanks for joining us, America. We're glad you're here. This is the Dave Ramsey Show. Open phones at 888-825-5225.

Dustin is with us in Ohio. Hi, Dustin. How are you? I'm good. And yourself, Dave? Better than I deserve. What's up? Hey, I just had a question for you.

I wanted some advice. I'm in the process of enlistment with the military, and my question is, what is your advice on best being responsible with my finances. Long story short, I have a fiance and a four-year-old that's going to be at home, and I want to make sure I'm doing everything right that's going to set us all up for the future because the goal is retirement with the military. What is your advice on that?

Good for you. Thank you for your service. How old are you? I just turned 25 last month. Okay. What are you going to be doing? The goal is to be a sensory operator. I'll be a drone pilot, and I am attempting to cross-train in cybersecurity.

Good. Okay. Very good. All right. Fun. Well, I mean, there's really no difference in what you would do. You would follow the baby steps that we teach. Make sure you're out of debt, you have an emergency fund of three to six months of expenses,

and then you begin saving 15% of your income in Roth IRAs, and you can use the Thrift Savings Plan to do some of that if you want to. Roth selection, and we recommend 80% C, 10% I, 10% S in the Thrift Savings Plan. But I would do a regular Roth IRA for you and your wife each, and then above that do the Thrift. Because you can beat the TSP rate, what it's performed. It's a good, the C's a good plan, but you can beat what it's done in the open market with good mutual funds because it's basically an S&P. Then you would save. Do you feel like most of the time in the military they're going to move you every couple of years? Do you feel like that's going to be you?

Me, more than likely. Her, she will more than likely stay in Ohio because she runs a hair salon, and I can't ask her to leave that because of how it works. You're going to get married, and you're going to live in Hawaii, and she's going to live in Ohio. As of right now, that's what it's going to look like, but there's a big chance that I'll be here in Ohio because of the career field. A lot of the drones are actually piloted out of Springfield, Ohio. Yeah.

Okay. So I've got about a 75% chance, but there is always that chance that I'm not here. And if it requires her to move, then, you know, that's the step we'll take. Yeah. Okay. Because, I mean, you don't want to be separated for two years from your wife. Yeah. No, absolutely not.

And you're living in the States. I mean, if you're deployed or something, that'd be a different situation. Right. Absolutely. And you're living in the States. I mean, if you're deployed or something, that would be a different situation. Right, absolutely. Then the other thing, and this would normally be my warning to young non-married enlistees. I don't think that, I mean, the 18 or 19-year-old, the biggest danger, and we work with the military all the time we love military folk um is that when you leave the gates of most any military installation as you leave the gates on each side of the road for the next two miles is every stupid thing a human can do absolutely and a lot of it is around money. Some of it is just immoral activities, but a lot of it is around money.

And so you can pawn stuff. I mean, you can title pawn your car. You can rent to own. You can do every stupid butt thing. You can pay somebody $50 to cash your check. I mean, you can just do every stupid butt thing for the next two miles down the road on each side. And just don't fall into that and let it mess up your finances or your life, because there's a certain number of people out there that prey on 19-year-olds with their first check in the military

and their first taste of freedom from their mama's kitchen, you know, and nobody there to smack them with a wooden spoon right and so it's definitely a big mistake that i hear about all the time and it's one of those ones that i personally know to avoid and it's just i want to you know i've had a lot of military people come in through my work you know recommending you to talk to specifically and know um you know i've got a four-year-old son and i think you're more stable than what i'm talking about that's why i said that that's not my norm that's my normal advice when i'm talking to the guys and gals but i think you're probably a you know you're a life phase ahead of that and so

you know you got a four-year-old kid a wife you're you know you're you're probably not going to fall for all that but just be careful that you don't fall for anything out there in the public and you just walk these baby steps. Hold on. I'm going to send you a copy of the book, The Total Money Makeover, which will outline exactly what you should do, and it's our gift just for saying thank you, or just as we say thank you for your service and where you're headed.

Open phones at 888-825-5225 matthews on instagram do i close my credit card accounts before they're paid off or do i wait and close them as they're paid well you can't really close an account that has a balance on it you can close it to further charges but it's still open until the balance is paid and so if you know you can you can close it to further charges chop up the card. You can do all that. But the big deal comes, of course, when the balance is zero. And then you get to go through a 30-minute discussion with Citibank on why you want to close it.

I'll give you a hint there. Just tell them you're following the Dave Ramsey plan. It makes the conversation shorter. Because they have determined somehow in their little scripting process that people who have shaved their head and drunk the Kool-Aid and joined this tribe will not negotiate with them and cannot be talked into going back into the land of stupid. Dylan is with us in Texas. Hi, Dylan. Welcome to the Dave Ramsey Show.

What's going on, Dave? Better than I deserve, man. How can I help? Well, I'll start off by saying I've always been a saver. My parents are big savers. They followed your baby step plans years ago. They told me that now that I'm out on my own,

I should follow it. But like I told the lady who answered my call, I'm pretty stubborn. I'm going to need you to tell me this. You know, Dylan, you got to do this. Get it in my head. I'm very fortunate. I do very well. I have tell me this. You know, Dylan, you've got to do this. Get it in my head. I'm very fortunate. I do very well.

I have about $800 to $1,000 extra a month that I put towards my debts after minimum payments and everything. It's split amongst my savings account, a finance TV, big TV, a car payment, and my student loans. When was it you listened to your parents oh i when i listened to them oh i'm it wasn't when you took out a loan on a big screen oh they love tv i i love that tv not a smart decision i know but i love my tv and i don't have any issue paying for it all right you had an issue paying for it because you couldn't.

You put it on debt, but yeah, all right. Well, yes, sir. So I take about $800 to $1,000 a month, and I really do pad my savings. I'm well past step one. I'm into step two, but it's a psychological thing. I love having a padded savings account. That's where the most of it goes. And then I take about the extra. Go ahead. I go ahead you're fine okay you have a plan you have

a system and so how much is in savings uh right now it's about eight grand okay and how much debt do you have on the tv and the other stuff the tv has about 2100 on, no interest. The car is at about $18,000, and the student loans total to about $23,000. Okay, and what's your household income? I make about $3,800 a month after taxes. How old are you? I'm going to be 24 on the 6th. Okay, and what is it you want me to tell you? Well, baby step two, you know, you say I should take all that disposable income and I should put it towards the small debt first, and then I should go to the next smallest and the next smallest. Right now I take about the extra $800 that I have.

I understand what you're doing. I understand what you're doing. What's your question? My question is, should I take all that money um and follow baby step two like you say and and just knock the tv out and why would i not tell you to do the system that i've told millions of people to do well it's you know i don't feel overwhelmed by my debt and um i uh you should i like you're 24 years old, you make $45,000 a year, and you're broke. You're deeply in debt.

And somehow you figured out that this is all okay. You ought to be very afraid. You owe way too much on your car, and your stupid butt TV is absolutely insanity. Yeah, you ought to be upset. I wish I could get you upset. And then you'd probably do something about it. This is The Dave Ramsey Show.

This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.