The Ramsey Show - App - Advice on How to Buy a Diamond Engagement Ring (Hour 1)

Episode Date: August 16, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Jennifer is in Lexington, Kentucky. Hi, Jennifer. How are you?

I'm good. How are you? Better than I deserve. What's up? Okay, so I'm looking at a job change which would be a decrease in my income i'm married so we still have my husband's income and i also have a little bit of debt but we think we have enough money of course to pay off that debt today and we just want your advice if the job change will be good or not okay Okay. And so how much debt do you have?

Right now we have our car and our home. The car we have about $17,000 and the home is about $109,000. Okay. And how much money do you have to pay off the debt? We have about $54,000 in savings. Okay. So you can pay off the car today. You need to do that no matter what you do.

That's a no-brainer today. What does your husband make a year? He brings home about $42,000 a month. Okay. And so he's making about $65,000 a year, give or take. Yeah. And what do you make a year? I'm bringing home about $2,000 a month.

So you're making about $32,000 a year. Yeah. Okay. And what do you do? I'm a caseworker. My child is starting school, so I was looking at going to work in the school. It would be a lower pay and then maybe go back to school to get my teaching certificate. But it would allow me to be on the same schedule with her, and it's just something that we've both thought about and want to do.

And how much would you be paid? It's about $18,000 a year. Okay. And how many less hours? Well, it's the school schedule, so it would be 8 to 3, and then off in the summers, and so I would be able to take her and pick her up and all that. Okay.

All right. Well, it's certainly okay to take a pay cut. You guys have been responsible with money. You've lived on less than you make except for the stupid car payment, and you've saved $54,000, but the car is paid off today so now we've got you know thirty five thousand dollars laying around and um you know you should be fine you you obviously have been uh fairly reasonable with money and intentional with money so it's okay um and it's a quality of life issue you're going to be able to spend more time with your kid this way.

And if you want to work on your teaching certificate, it's an easy way to do that. Of course, you'll pay cash for that as you go along. Right, which the job would allow me to do that, so that kind of makes me feel better about that too. They pay for it? No, I just mean rather than just quitting my job, but I would still be getting paid some money.

Yeah, you'll have some money coming in, and you'll have the time to actually work on the teaching certificate and I guess getting your master's in education, right? Yes. Yeah, okay, cool. How long will it take to get the master's? About 18 months or so. And what will it cost? About $18,000. Okay, so you you got the money to do that too yeah yeah and

yeah i'm doing this and because then if you can land a job then on that same schedule as a teacher then you're you know your income is going to be higher than it is now and that's what i'm hoping that this would just be a temporary change, you know, to reduce our income, but later on it would be, you know, a better change. And the double win is you get the quality of life and you're going to get an increase in income. So overall it's a great goal. It's going to require some work on your part, but you're not afraid of hard work.

Okay. Well, I really, really appreciate your advice. Well, thank you. Thank you for calling in. I think you've, really appreciate your advice. Well, thank you. Thank you for calling in. I think you've thought this through pretty well. I just wanted to catch up with you on all the different elements of the decision, but it sounds like you've worked it through. Write a check today and pay off the car.

Pay cash for the master's as you work on it and take the other job. I definitely would do this. Great question. Thanks for calling in. Brian is with us in Raleigh, North Carolina. Hi, Brian. How are you? I'm well, Dave. How are you?

I'm well, Dave. How are you? Better than I deserve. What's up? So I have a question about my house. About two and a half years ago, my wife and I bought my mother-in-law's house. We paid $172 for it. We're now down to $162 because we, this is pre-Dave in our life, we did a 30-year fix at 3.75%, but we didn't put anything down. We did the North Carolina first home buyer,

and other than closing costs, we didn't put anything else down. So I have PMI on my monthly payment and I want to get rid of that. My question is, when they're talking about 20%, do they talk about 20% from your loan amount or is it on the value of the house? If it is a conventional Fannie Mae loan and you get an appraisal done by an appraising company that is approved by your mortgage company it's 80 of the value so as your value comes up and your balance goes down that's what's going on now i don't know what kind of loan you've got with a first-time homebuyer program it may be underwritten by fha i think it was yeah and so it's probably not that it's 78% of the original amount borrowed. And your increases in value won't help you, typically.

Now, if rates stay down and you go from three and three-quarters down to around three on a 15-year fixed, then you're refinancing and you could get rid of PMI based on value. The 80% loan value if you did a refinance. And so that's a possibility as well. But the thing to do is to gather more information before you make that decision. And that's call your mortgage company and ask them, ask to speak to a supervisor in customer service because the person answering the phone won't know the answer to your question. Okay? But get a supervisor on the phone and find out what process I've got to go through with a North Carolina first-time homebuyer.

What ratio are you using? Is it loan-to-value or the loan-to-original amount borrowed or original sale price or what that you're using to drop PMI? And I want to pay it down to that and most of the time you'll have to pay for an appraisal in any case uh to prove by a company that is approved by that mortgage company to prove that your loan to value ratio has gotten to where it needs to be to get rid of pmi and And so that's a really good question, and you're really on a good, that's a good hunt to be on, a good, you know, a good intentionality on your part to say, I'm going to knock this out,

I'm going to get rid of it. So good question, man. Thank you for joining us. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. Michael is on Twitter. Says, should an overdraft be dealt with before baby step one? Yes. You get caught up on your bills, and that includes being in overdraft

before you do baby step one. And so if you're behind on your electric bill, you're behind on your house payment, you're behind on your mortgage payment, or your car payment or something, you're behind on your house payment, you're behind on your mortgage payment, you're behind on your car payment or something. You get caught up on everything and that's then you start baby step one. You're in crisis mode when you're behind on stuff. Overdraft is

crisis mode. This is The Dave Ramsey Show. I get asked all the time, when in the baby steps is the right time to buy life insurance? My answer is typically now. Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs. That's when they're at the highest risk. And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives, as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance since it's the most affordable way to get the right amount of coverage and not break your budget.

Go to Zander.com or call 800-356-4282. These are the guys I personally use. Term life insurance is inexpensive and your family needs this no matter where you are in your baby steps. That's Zander.com. Or call 800-356-4282. Zander.com. Thank you for joining us, America. It's a free call at 888-825-5225. You jump in, we'll talk about your life and your money.

Jimmy is with us in Chicago. Hi, Jimmy, how are you? Hey, Dave, how's it going? Better than I deserve. What's up? So I'm getting married pretty soon here. Congratulations. And my question, what's that?

Congratulations. Thank you. My question is, right now, me and my fiance, we manage our money separately, and we're looking to combine our finances. And my question is, is this a good idea, and what would the first step be? It's an essential idea, because Jesus said, your treasure is where your heart is, and when you share your spending decisions, you are agreeing on your goals, your fears, your life.

And so combining finances, what what's yours is mine what's mine is yours is part of a good marriage uh the old-fashioned marriage uh uh vows said unto thee all my worldly goods i pledge and there was a reason for that because when you put all your stuff in a pile it's and you change your pronouns it ours. It's we. It's not my car, your car anymore. It's not my credit card debt, your credit card debt. So pretty easy to do. You get one checking account, put both names on it. Both of you are signatures on that.

Both of you run your debit cards out of the same checking account, and you don't spend any money except what you both agreed to on the budget. So there are no surprises. Right. And then as far as the actual debts go, you don't have to change the names on the debts. You just change how you talk about them and that, you know, like if you're working off paying off your debts, you're going to intersperse. You're not going to have your own debt snowball.

She has her own. We have one debt snowball that all of our debts are on their smallest to largest yeah that makes sense and you know that part of combining does uh either one of you own a home currently no we rent good okay then there's no reason to worry about that and there's no reason to necessarily add one of you to the lease and just add to the liability at this stage of the game. I would just keep that. Whoever's going to rent the house, rents the house, and the other one moves in, you know, after marriage. And so that's your normal process there.

But the big thing is just anything that there's an asset, if you have a mutual fund account, if you have any bank accounts, you just add each other's names to them and start treating them as if it is one pile of money. Does that make sense? Yeah, it does make a lot of sense. Yeah, and what it does, it forces you to communicate about all your decisions, and communication is the number one thing that people get messed up on, especially early in marriage.

Don is with us. Don's in Baltimore. Hey, Don, how are you? I'm great, Dave. It's an honor to speak with you. You too. What's up? Hey, I'm trying to decide.

My company recently started offering a Roth 401K. Yes, sir. And I'm trying to decide if I should switch from the traditional to the Roth. I would. Okay. The reason is very simple. If you keep putting the exact same amount in, all of that is, of course, taxable. It's not pre-tax going in, but all of the growth is tax-free,

and 94% of what will be in there at retirement will be growth. Here's my question, then. I can max out my traditional 401K and keep my paycheck where I want it to be, but if I go to a Roth, I'll pay more tax, and I can only put $11,440 a year in. Why? Because I'm a single guy, and I just need my paycheck to be that much to sort of cover everything I want to do. Well, so you're analyzing the crap out of this, is what you're saying. Yeah.

What's your household? What's your income? It's let's see it's like 104 uh six okay and you're debt free yep and you have your emergency fund yep and you're currently putting 18 000 into the 401k yes and you can't do the other $6,000 and some change because your budget's too tight? Yeah. That's $500 a month. What's that? That's $500 a month. You're killing me here.

Yeah. What? So just looking at it. You're not saving that on taxes. You're coming out ahead the way we're talking. You're not paying $6,000 in taxes on $18,000. Well, I live in Maryland, and if I pull up my paycheck here, I mean, in a single paycheck, it's like $715 federal, $57 Medicare, $ 244 Social Security, and then Maryland is 270.

So that's every two weeks. And then taking out the regular 401K, my health care, dental, and then my long-term disability, then it ends up being, you know, my paycheck ends up like right around $2,000. What is in the rest of this budget that's this important? I don't know. I mean, you can't – I've got to tell you, I put 15% of your household income. So if you don't go all the way to 18, I'd at least go to 15 or 16,000 in this case. And I would just find the room in your budget to do that. You're trying to compare this

mathematically dollar for dollar, apples to apples, exactly the same. I wouldn't. I'd put 15% of my income into a Roth and I would retire a millionaire that was 100% tax free. See, if you've got a million dollars in your Roth 401k at retirement, there's zero taxes on it. If you've got a million dollars in your traditional at retirement, you've got taxes on that. And with the taxes you're running here, it sounds like that would be $300,000. And so it's a $300,000 discussion. Right. On a million dollars.

And I think you probably have more than a million dollars. I don't know. How old are you? I'll be 48 next month. Yeah, you won't be that much different then. Yeah, I already have 550 in my retirement account. And then if I just went from today forward looking at this, either the traditional or the Roth,

the traditional would probably end up somewhere around, just from here forward without the match, would be like $1.1 million, and the Roth would be about $700,000. Because you're putting less in the Roth. Right, right. Yeah. So your advice would be just... I would put more in, and I would do it as a Roth.

See, none of the above. But you're trying to run this out exactly apples to apples and dollar for dollar. And I really wouldn't do that. I would just say I've got this tool available to me to grow a huge tax-free account. And I want to utilize this tool instead of trying to split hairs between which is the best way to go. You know, it actually comes out exactly the same if your tax rate doesn't change. If you put a tax-reduced amount, which is what you're talking about, into a Roth versus a pre-tax full amount into a traditional, and you pay taxes on the traditional off the backside,

including growth, and you don't pay any taxes on the Roth off the backside, giving the same exact amount of growth and the same tax rate, it comes out exactly equal. Your net net of tax comes out exactly equal. But that's not going to be what happens in the real world. That's theory and trying to do something in a vacuum that doesn't happen. Instead, what I would do is beat the theory up and say, I've got this tool available to me.

I'm going to load this Roth up and let it grow completely tax-free, and I'm going to have all this tax-free income available to me at retirement in the multimillion dollar range. And that's what it sounds like. So you can do whatever you want to do but if you the way you're analyzing it is mathematically correct if it's exactly the same taxes on your traditional withdrawal as your as your today tax rate is and you reduce your roth contribution by that exact amount and then you don't pay taxes the net effect at the end is exactly the same,

assuming the two accounts grow at the same rate as well. But the truth is, in the real world, most people put more into Roth and end up with more and usually have a higher tax bracket at retirement because you've got millions of dollars in there if you did a traditional. It could run your tax bracket up higher than it is now if you do a traditional. And taxes continue to raise. Now, that's a political question as to what you think will happen there. This is the Dave Ramsey Show. Can you believe this real estate market?

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Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Thanks for joining us, America. This is the Dave Ramsey Show. It's a free call at 888-825-5225. Chris is with us in Traverse City, Michigan. Hey, Chris, how are you? Yeah, Dave, thanks for taking my call. Sure, what's up?

Hey, yeah. Well, my wife and I are trying to get on board with paying our debts off and sold a boat last year. So we've got about $20,000 saved up and I've got a car and some snowmobile debt to pay off and just trying to figure out what we should do there. I've got a small business and we go through a slow time in the year. That's why I'm a little reluctant to get rid of that cash I have saved on hand right now. How much do you owe on the car and the snowmobiles?

36 on the car and 19 on the flood. Okay. And what's your household income? Around $90,000. Okay. And what's the other car worth? The one that we have a loan on? You have two cars, right? I've got a truck that's paid for.

What's it worth? I'd say $25,000. Okay. Well, there's a couple rules of thumb we use number one if you're going to build wealth you don't want the vast majority of the money you have tied up in things that are going down in value you want to invest in things that are going up in value and to that end the largest thing that we all buy are things with motors in them that go down in value. Boats and sea-dos and sleds and trucks and cars all go down in value rapidly. And so the rule of thumb that I use is I tell people not to have a total of vehicles.

The value of the vehicles is more than half their annual income, and you're violating that. You have more than half your annual income tied up in stuff that's going down in value. And so that's part of your problem right there. The second thing is, how volatile is your income? Do you ever go to zero? No, but, I mean... During the slow times, if you had no payments, could you eat? Yeah.

Okay, so it's just, it's a matter of keeping your lifestyle up during a slow time as all this money would be used for, and we wouldn't want to use it for that. Unless it was extra money. I mean, it's not extra money right now. You're in debt. So I think you're nibbling around the edges of all this stuff trying to learn about it. But I'll go ahead and tell you what I would do if I woke up in your shoes. But you're not there today. You're not going to do this today.

But I'm going to tell you anyway, so you've got something to think about. If I woke up in your shoes, I would end up with vehicles that total less than half my annual income. So no more than $45,000 tied up in vehicles, which means something's going to be sold. And that's going to help reduce the debt. And I'm going to use the rest of the $20,000 to get rid of the debt. And then I'm going to get our family on a really detailed game plan, a detailed budget, making the money behave, every dollar behave, every dollar has an assignment, and then I'm going to start getting rich if I'm in your shoes. Because you make good money, but you're broke. And the reason you're broke is you have all your money tied up and things are going down in value, and you've got a bunch of debt. And if we reverse those two trends with the kind of money you make,

you're going to be able to save and invest some serious money and, you know, head towards being a millionaire. And there's no reason for you to be as broke as you are with the kind of money you make. I mean, 90 grand in Traverse City, Michigan is a good income. It's a really good income. So if I were in your shoes, that's what I would do. And I like toys i got two

c-doos that are uh the total value on those things is worth more than your two sleds so very similar just one's on water one's on snow uh and i gotta tell you they go down in value like a rock and boats go down in value like a rock and cars go down in value like a rock and c-doos are in traverse city there may be a necessity but uh they're probably not i think they're called a toy uh sleds are snowmobiles so if i woke up in your shoes it'd probably break my heart i'd probably cry a little but i'd probably sell those things that gets rid of nineteen thousand dollars worth of debt and that leaves you with just the car debt and the twenty thousand,000. You can clean this mess up. And next time you buy toys, pay cash for them. And, again, make sure that everything you own with a motor in it added together

never exceeds half your annual income. Otherwise, you've got too much tied up in stuff that's going down in value. Again, you're probably not ready to do all that right now, but that's the steps I would take if I woke up this morning in your shoes knowing what I know. Because I know if you'll live like no one else, later you can live and give like no one else. Hold on. I'm going to have Kelly pick up, and I'm going to give you a copy of the book, The Total Money Makeover, to walk you through the exact steps and where we're going with this.

The point is not to live and drive crappy cars your whole life and not have any fun. The point is to pay a price to win so that you never have to have crappy cars again and you never have to have a lack of toys to play with again. And you're paying a price to win. Hold on, Kelly. I'll pick up and we'll get you signed up. All right, Kelly, I'll get you a total money makeover book. Eric is in New York City.

Hi, Eric. How are you? How's it going, Dave? Thanks for taking my call. Sure. What's up? I have a question. I have a, well, my wife and I have a one-year-old daughter,

and currently I have her money that she's received from Christmas, birthday, Christmas, stuff like that, sitting in a savings account. And I know you always preach to mutual funds over regular savings accounts. And I figured, you know, over the course of her life, she's going to accrue a lot more money. So I guess the basic question is, how do I choose what mutual fund company to go with, such as like Fidelity, Vanguard, T. Rowe? I know you say the small cap,

mid cap, large cap, and international funds. But as far as picking a company, because with all the different fees and stuff like that, how would I go about choosing which one would be best, or is it really not that big of a difference between the companies? And when I open up the account, do I put her name on the account also or just my name and my wife's name on the account? Okay. The way you select an advisor is you're looking for someone with the heart of a teacher, not the heart of a salesman.

And so when you sit down with them, they're going to teach you about mutual funds and about the different ways that fees can be charged. And when you learn that, then you will be able to say, oh, this is reasonable. I can go forward. Or, oh, this isn't. If you click on SmartVestor at DaveRamsey.com, you will put in your information. You'll get a list of the SmartVestor pros in your area that we recommend. And they're all our people with the heart of a teacher.

But you can sit down with one or two or three of them, interview them, learn from them. You always want someone with the heart of a teacher. Learn from them. That's very important. Then the second part of the equation is, you know, picking a mutual fund for a child. If you want to just open it in the child's name,

you can do that and make you the custodian that's called a uh uniform transfer transfer to minors act a utma uniform transfer to minors act and all that is is just open a kid's account in their name and you are the custodian the money becomes theirs at 21 regardless you have no control over it after that. And so teach them well. Now, having said all of that, I'm going to send you a copy of the book Smart Money, Smart Kids, which is our book on teaching kids how to handle money. Rachel Cruz and I did, number one bestseller.

And in that book, one of the things I'll disclose is that we did not put the money that you're talking about in a mutual fund. You can if you want to, but just to be full disclosure, I didn't do that. I opened college funds that I put in mutual funds for the kids, but their little miscellaneous birthday money stayed in a savings account, and they added to it with savings as they got older, and we put some birthday money in there as they went along. And as they added to it with their chore money, that was their savings,

that became the money that they saved towards their first car. And they would add to it, add to it, add to it. And then what we agreed to do is we had 401 Dave. We matched them on whatever they would save on their first car. But some of it was started with that little account that you've got right there. And it never really did earn a lot. It was just in a savings account because I was trying to teach them to save more than I was worried about the quality of the investment in that case. But I did do mutual funds on the kids' college funds.

So hold on. Kelly will pick up. We'll get you a copy of the Smart Money, Smart Kids book. This is the Dave Ramsey Show. Our question of the day comes from Blinds.com. You do not need a second mortgage to make your home over. Get brand new custom window blinds without paying custom prices. Blinds.com. Free samples, free shipping, new promos every month.

Use the promo code Ramsey. What a great company. They're good people. Matt is in Iowa. We recently completed Baby Step 2 and are now working on Step 3. We are also trying to save up for a used pickup i'm not a car guy and i'm nervous about buying older cars do you have any advice on evaluation of high mileage vehicles um well matt you can't do all this at once the definition

of baby step two is you are working to get out of debt listing your debts smallest to largest you pay minimum payments on everything but the little one and you don't do step three and still step two is completed so you should not be doing baby step three while you're getting out of debt saving for an emergency and you should not be shopping for a car until you have an emergency fund in place and you're out of debt and you pay cash for the car. So you don't need to be looking for a truck right now. There we go. You're trying to do too many things at once.

The very purpose of the baby steps is to create focus and do one thing at a time until that is done. That focus creates actual activity and progress, which keeps you moving. So you need to not be doing saving for a pickup. You need to not be saving for emergencies. You need to be completely focused on getting out of debt, listing your debts smallest to largest, and attacking them in that order. So hope that helps. Keegan is with us in Lincoln, Nebraska.

Hi, Keegan. How are you? I'm good, Dave. How are you? Better than I deserve. What's up? Okay. You might have actually just pointed out something with that last question. I might be doing too many things at once. I've got $47,000 in debt, and I make $38,000 base, but I work in sports, so I've got a lot of overtime during the season. So at the end of the year, it's about $50,000.

Okay. $50,000 on top of the $37,000 or $50,000 total? No, no, no. Sorry. $50,000 total. Okay. About $50,000 a year. Okay. So I've got this debt and I'm in baby step two. But I've also got

an amazing girlfriend who I want to get engaged to and I want to marry. And should I... I'm kind of looking for a goal. It's like a timeline. Should I just completely focus on the debt or should I be saving up for a ring and for a wedding as well? So you guys, you suspect that the two of you will have to pay for the wedding?

I have not talked to my parents about that at all. We haven't talked to her parents about that at all. We're still a ways off, I would imagine, but I'm just trying to plan for my future. I know that it's going to happen. Okay. Well, setting the wedding and the ring aside just a second, yes, you do one baby step at a time like I was just discussing. First baby step is save $1,000.

You don't do anything, no retirement savings, nothing until you get $1,000 starter beginner emergency fund. Then baby step two is the forty seven thousand dollars in debt we got to get our way plowed through that i do not tell people i do not tell people to wait to get married until you're out of debt i don't mind you getting married while you're in debt i just want everybody to know what's going on meaning her knows what she's getting into right she knows she's actually the one who introduced me to you okay and then the two of you are talking about this and running your finances separately

until you're married but as long as you're on the same page i don't i don't care if you decide to get married before that now then let's let's go back to the ring a second um the the most you should spend on a ring is one month's income and that's the most as deeply in debt as you are i probably wouldn't spend that much okay a jew most of the retail jewelry stores will tell you two or three months of your income on a ring but that's because they're trying to sell you a ring so um but um you know there is no correlation between the size of the diamond and the quality of the marriage right matter of fact there may be an inverse correlation in some cases so uh not always but sometimes so uh when i got married sharon got a 0.23 carat. That would be known as a chip.

Now, today she wears a headlight on her hand, and the chip is in the safe, okay? But so you got time to change things as you go along. The point is to do something that you're not ashamed of, she's not ashamed of, but that's not overly crazy. So, yeah, you could save up i mean if you spend a thousand bucks on a ring 1500 bucks 2000 bucks on a ring watch what you're doing you can get a lot of bang for your buck um i will tell you diamonds uh are the most marked up one of the most marked up items that any people buy so the retail jewelry store at the mall is, you know, the markup on that diamond is huge.

Jewelry and furniture are the two biggest margin items sold today. So I would recommend you, you know, you don't have to become a student of diamonds or something like that, but I've been amazed at the range of prices once I started learning a little bit about them enough to buy them. They are not an investment. I've been buying diamonds for Sharon for 35 years, and they have yet to go up in value.

They just don't. Okay, so this bogus stuff of, oh, diamonds are a girl's best friend, you know what that is? That's an advertising lingo. Okay, so the bottom line is this is a gift to your wife. It's something pretty and nice, your future wife. And we're not going to call it an investment. We're going to be smart about how we buy it. And if you will learn a little bit about it and or get somebody around you that knows something about it,

maybe the best place is a high-end pawn shop. You can find stuff at 50%, 25% of what you pay at the jewelry store for the exact same cut, clarity, color, diamond, if you find a deal on something. And just, you know, but you need to learn a little bit about it because you don't want to get a bad stone you don't want to get something that's you know uh that and so forth but a high-end pawn shops great place to shop for that so all of that said yeah given that you can get a lot of ring for a thousand fifteen hundred two thousand bucks and that's the most you need to spend and yes i would at some point stop your debt snowball, baby step two,

and pile two grand up, and then restart and go. Then we'll deal with the wedding the same way when we get to it. We're going to have a very, if it's coming out of two broke people's pocket, you're going to have a very inexpensive wedding. But five grand, ten grand, you can have a fabulous, wonderful little wedding. And between the two of you, save that up before the wedding in cash and do no more harm to your finances. If mom and dad can chip in or want to chip in or whatever, then that's going to carry that money even further. And hopefully you won't have to come out of pocket for the wedding.

That you guys can just work on your debt snowball. Each of you work on your debt snowball in baby step two. So that's how I would get at it. And that's the advice I would give you. Yeah, you enjoy your life with your money, and that includes getting engaged. What a wonderful thing you have facing you there. And but let's just use some common sense with it. People lose their minds with their spending around emotional issues.

So you just have to be smart and use some common sense. And you can go a long, long way with that. Hold on. I'm going to send you a copy of the book, The Total Money Makeover. It will guide you through a whole lot of those kinds of things that we're talking about there and help you put together that budget and learn those baby steps. you calling in all right let's review folks the reason for the baby steps is they're baby steps you do one step at a time have you ever climbed a ladder and tried to skip a step you'll end up hanging upside down by your foot, won't you?

Don't skip a step on a ladder. It's dangerous. Don't skip a step on the baby steps. Have you ever tried to stand on two steps at one time on a ladder? It's also dangerous. Don't do that. Baby step one is called baby step one for a reason. It's first. Baby Step 2 is not Baby Step 3 because it's second. This is a proven process, people. It works. Do the clear process, and you will get the clear results. This is not rocket science. Don't turn it into something complicated.

You can learn about all of that at our website at DaveRamsey.com. We'll help you with it. But don't try to fix this deal. It isn't broken. This is The Dave Ramsey Show. 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.

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