The Ramsey Show - App - An Easy Way to Hit Your Money Goals (Hour 2)

Episode Date: June 26, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where daddy 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 am Dave Ramsey, your host. This is your show. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225.

Kimberly starts off this hour in San Diego. Hi, Kimberly. How are you? Good. How are you, Mr. Ramsey? Better than I deserve. How can I help? Awesome.

Well, happy anniversary, first off. Thank you. My husband and I just celebrated our one year on Sunday. Yay! Yeah, and we just started listening to you, and now I'm sitting here thinking, oh my gosh, we did everything backwards. Last year, we sold my husband's home, and we profited about like $90,000 from that, and we paid off our cars. But we were renting and kind of had the stupid thought, like, why are we renting? So we purchased another home.

And now we put down the rest, which was $80,000 towards the home. But we still have $60,000 in student loans and $5,000 in a home equity loan. So now I'm just thinking, like, we're both thinking, should we sell it and just take the capital gains loss? Because we might lose some of the money we put into the home. Yeah, there's not a capital gains loss. Or wait a while. There's not a capital gains loss on a personal residence. But we just moved here.

Yeah, it doesn't matter. You may take a loss, but there's not a tax write-off for it. So what is your house payment? It's $1,900 a month. And what is your household take-home pay? For the year? No, monthly. Oh, like $5,200, roughly.

Okay, and do you have a 401K being taken out before it comes home? Yes. Okay. My husband puts $ hundred dollars a week and that's all okay well he gets paid every week so they take it out yeah do you have do you have health insurance being taken out um correct okay all right well the house is affordable then because we tell you not to have a house payment that's more than a fourth of your take-home pay. But when we're talking about take-home pay there, we're talking about your after-tax pay, not your after-tax, after-health insurance, after 401k pay.

All right. So what we would tell you to do is to stop your 401ks temporarily, stop saving in any way temporarily, and let's walk right up these baby steps. You've got a decent household income. You've got a reasonable house payment based on your household income. It's not what I would have told you to do, how you've gotten here, but now that you're here, if you like the house, I would sit tight and let's just attack these debts, and let's pay them off as quickly as we can.

Let's list the debts, smallest to largest, pay minimum payments on everything but the little one, and attack the little one with a vengeance and sell everything else in sight. So what do you owe on your cars? We don't owe anything. We paid those off. That's what you paid off. We called the other home. Yeah, I got you.

I got you. Okay, cool. Very cool. Good's what you paid off. We called the other home. Yeah, I got you. I got you. Okay, cool. Very cool. Good for you. All right. So the remaining debts are $5,000 on a home equity loan and on what? And the $60,000 in student loans. All student loans.

Okay. All right. Cool. All right. And so what we're saying is that you make $95,000 to $100,000 a year, and you have a $2,000 a month house payment, and you're going to live on a really tight budget, and it's probably going to take you close to three years to pay this $65,000 off in debt,

and you're not going to have much of a life while you're doing that. That's the price you'll pay if you keep this house. I think we have the numbers different. Because on mine, we make $63,000 a year. Okay. You're talking about your $5,900 take-home pay is what you told me. Well, it's $5,200. $5,200.

Okay. That's $63,000. All right. But that's your take-home pay. I was talking about a $90,000 income. I stopped your 401K contributions in this conversation. And your take-home pay is after health insurance has been paid, too. And are you getting a tax refund, too?

Yes, we are. So you're having too much withheld from your check as well. Because all the tax refund is is they're giving you money back because you're having too much withheld from your check as well. Because all a tax refund is is they're giving you money back because you gave them too much. Yeah. And there's no interest on that, by the way. They're not paying you any interest on this wonderful savings account you have with the government. So you need to recalculate your withholding to where it's the proper amount withheld, not too much being withheld.

A tax refund means too much is being withheld. You need to stop your 401ks and tighten your budget up very, very, very tight. And what you'll discover is your gross income is upward of 90. It's approaching 100 if I'm doing this right in my head, but I'm not far off here. Gina is with us. Gina's in Michigan, Detroit, to be exact. Hi, Gina. How are you?

Good. How are you, Mr. Ramsey? Better than I deserve. What's up? Well, I was wanting your opinion on inheritance that I received from my mom. I'm trying to get all my affairs in order. I have two young children, a two- and a three-year-old. And I have $107,000 left over from the sale of her house. And I'm not sure what to do with it.

I am married. My husband is a stay-at-home dad with our kids. So our budget is very tight. And with the young kids, they're preschool. And I want to save for their college. What's your household income? I make $75,000 a year, $3,800 a month. Okay, and good for you.

What do you do for a living? I'm a nurse. Okay, cool. And how much debt do you have, not counting your home? I only have my car, which is $15,000. Okay, good. All right. And what do you owe on your home?

$115,000. Okay, and you received $107,000 from the sale of her property i did well it was more than that but we had to pay for a few things to get things straightened out but that's what's left right now is there any more coming from other sources nope that's everything i do have a inherited ira from her but i you know can't touch that right now yeah you can what how much is in it uh 18 18 000 18 000 okay all right so here's what we found we have found with all the data How much is in it? $18,000. $18,000. Okay. All right. So here's what we found.

We have found with all the data of 30 years of doing this that the easiest way, the shortest way, and there's no easy way, but the shortest way, the path of least resistance to become wealthy is to get control of your household income, which is your most powerful wealth-building tool. And that means to get rid of debt. Right. Okay. And so we walk you right up what we call the baby steps. Baby step one, save $1,000. Do you have any money in savings?

Besides the sale of her home, I have $8,000 in my personal savings. Okay. All right. And so that's in play as well then. Yes. And I do have some retirement, 401K, 403B. I have about $650,000. Good, good for you.

That's well done there. All right, so baby step one is $1,000. Baby step two is debt-free except the house. That means we pay off the car. Baby step three is to have an emergency fund of three to six months of expenses. Baby step four, five and six, we do at the same time. Four is you start putting 15% of your income away for retirement. It sounds like you're already doing that.

I am. And baby step five is kids' college. You're asking about that. And six is pay off the house early. You could cash out the inherited IRA. You'll pay taxes on it but no penalties. And with the $8,000 and the $107,000, if I'm doing my math right, you could pay off on it, but no penalties. And with the 8,000 and the 107, if I'm doing my math right, you could pay off your home and your car. With no house payment and getting on a budget,

you could save for kids' college pretty quick, couldn't you? Yes. That might be something to think about. For sure, I'm paying off your car. If you want to fund kids' college and partially pay off your home and then finish it off later, that's fine. But I think you could probably get that house paid off if you crunch these numbers down. I hate to see people waste money, and that's exactly what happens when you spend hundreds of dollars a year on ID theft protection plans like Trusted ID, LifeLock, ID Watchdog, and any of them. Well, let's face it. Identity theft is a nightmare, and it's not going away.

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Great. Awesome. How much have you paid off? We paid off $294,000, Dave, and we also in that time cashed out $100,000 worth of other stuff. Whoa, what other stuff? Well, we had to finish paying for the kids' college, and we had to buy a car here and there. We had to do some big house repairs and that kind of stuff. Wow, okay. And how long did all this take? Six years and eight months. Okay. All right. Cool. And your range

of income during this time? When we started out, we were making about $138,000 a year. $12,000 was from a small business I started. And then we ended at $254,000 a year. And my small business this past year made $87,000. Woo-hoo! Nice! Very cool.

So what kind of debt was the $294,000 that you cleared? Well, $81,000 in consumer debt. We took a loan from my retirement system, two cars, a barn roof. We bought 16 acres of property on our property, credit cards, and a whole bunch of student loans. Wow. Very cool. And then we, in addition, we had $213,000 in student loans and those crazy parent plus loans to put all three of our kids through college. Oh my gosh. So what happened six years ago that got you guys on this journey? Well, I tell you, I drive a lot for my job. And of course, I picked you up on the radio

and I started listening to you and I started listening to all these people who had got out of debt. And I just was so worried about all the debt we were carrying and then having to deal with the student loans and everything else. So I bought the total money makeover and I brought it home. And it took a while to convince me. He kept pestering at me and poking at me, and eventually I listened. I think Bonnie started to believe when we start paying off the first couple of debts and you get those small ones taken care of, and then you say, hey, this is going to work. You know, and I think you started to believe, too. Something happens when you actually have success rather than just discussing the theory of it.

Absolutely. It gives you hope. And one of your favorite quotes is, hope deferred makes the heart sick. When you have no hope, you just don't know where to go. How old are you two? I'm 55 in about two weeks. All right. And I'm 52.

Okay. How long have you all been married? 30 years as of yesterday. Yesterday. Oh, happy anniversary. Have you ever been debt-free in your marriage until now? No, never. No, never.

Never, never. How does it feel? And we're never going back. Well, it feels amazing. Bonnie? I feel... Go ahead. Yeah, and just a legacy we're leaving for our children now,

and they saw us go through this and the struggles and how each one of them truly understands now that they cannot have debt, that they will have strong relationships and a much better life by not having any debt. How many kids have you got? I also want to say that we've been teaching FPU for the last five years. Wow, thank you. How many kids have you got? I also want to say that we've been teaching FPU for the last five years. Wow, thank you. How many kids have you got? We have three.

Okay. So what do you tell people the key to getting out of debt is? You paid off an amazing amount. It's working together. It really is. It's just the two of us budgeting and budgeting every single month. And we don't skip it. We take the time.

We're thoughtful in it. And that's been the biggest key piece to us, and that makes us work together. And I think also having faith and hope, as I was saying before. And we tell our FPU folks about the budgeting, that we've been budgeting for six years every single month and it just gets so much easier but it's really the key. It does get easier and I think, Bonnie, you said something there that's really important. I hadn't heard anybody say

this in a long time and it bears repeating. You said to be thoughtful about it. You can't do the budget and just mail it in. Oh, whatever you want to do, honey. You know, you've got to really sit down and actually look at the numbers together and say, are we together as a couple taking the steps to take us to our goals?

If we're not, we need to take the steps to take us to our goals. And that thoughtful and take the extra time about it, it absolutely matters. It sure does. And it saved our marriage. It really did. We never had big, giant giant fights but when we had

arguments we can trace all of them back to um the financial stress and the anxiety we had absolutely absolutely and and we also have but with our kids we've in terms of changing their legacy we've told all three of them that when when they go to get married none of them are currently engaged yet but they and they and their spouses must take FPU or they get no wedding money from us. Oh, hardcore. There you go. Wow, good for you guys. That's fun.

Well, congratulations. We're very proud of you. I know you are of yourself, and thank you for leading Financial Peace University classes and groups as well. It's very rewarding, but it also keeps you guys toe in the line because there's nothing like teaching it to make you not be a hypocrite, right? Yeah, it's really a tune-up for us, too. I also wanted to mention we went to see the SMART Conference in Boston with you guys this past spring, and we just loved it.

Oh, thanks. That is a great day. There's a lot of stuff going on that day, man. It's absolutely amazing amazing the lineup that we put together on that well thank you for mentioning that very very cool good stuff we got a copy of chris hogan's book for you retire inspired and of course that's going to be the next chapter in your story to become millionaires and outrageously generous as you go along you've learned to control money you've learned to work together together for the first time in your 30-year marriage in this last six years.

I'm very proud of you. Very well done. Thank you, Dave. It's Mark and Bonnie, Rochester, New York. $294,000 paid off plus $100,000 cash flow and other stuff in six years, making $138,000 to $254,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free scream. Three, two, one. Work, debt, and money. Good job, you guys. Really good job. Fabulously done. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. I like this. Now, you always a 100% satisfaction guarantee. I like this. Now, you always hear about a satisfaction guarantee, right?

But you never think of one like, I'm going to order blinds over the Internet. I don't know about you, but I'm very capable of mismeasuring that. And I'm really capable of picking the wrong color. See, I screw up. I don't expect them to give me a refund you know but their satisfaction guarantee is they will remake your window blinds for free if you screw up you get free samples free shipping this is a great company with the new promos they run every month you'll save even more use the promo code ramsey at blinds.com. Farisa is in New York and says, We've almost filled our emergency fund.

We have no debt. I recently learned about short-term bond funds with a higher percentage rate on interest than our current money market account where our emergency fund is sitting. Bond fund guarantees funds are available for withdrawal if needed losing the interest. Is it okay to move half of our emergency fund into a bond fund to gain more interest?

Absolutely not. Under no circumstances would you do that. Your emergency fund, everyone, say it with me, is not an investment. Say not an investment. If you want to get rich on your emergency fund, you will never get rich. You will never build wealth using your emergency fund to do it. I know it's the first time in your life you finally have a little money in the bank, and so it's really hard to let it sit there and make no money. I get that, but it is, it's insurance. It is not an investment. It's insurance. It's not an investment. Insurance costs you money to protect the things that make you money.

Your home going up in value. You leave your freaking 401k alone. You leave your IRA alone when there's an emergency. Why? Because you have an emergency fund. But if you lose your job and your home's going into foreclosure and you have no emergency fund, you know what you'll do with that stupid 401k? You'll cash it out and treat it like an emergency fund because you were stupid.

Because you didn't have an emergency fund. I've been stupid. I know what stupid looks like. And that's stupid. You know why? Because when you take money out of a 401k, they charge you a penalty of 10% plus your tax rate. Maybe you're in a 30% tax bracket. That means you just got hit 40 freaking percent. 401k, they charge you a penalty of 10% plus your tax rate. Maybe you're in a 30% tax bracket. That means you just got hit 40 freaking percent. You borrowed money at 40% interest because you didn't have an emergency fund.

Don't screw around with your rainy day fund. You just leave it, sit there, and make no money. I don't care if you keep it in a drawer, keep it in a lockbox. It doesn't matter to me. I don't care what it makes because it's not what makes you money. What makes you money is the things that it is protecting. And you don't buy bonds in an increasing interest rate environment. That's dumb.

Bonds have an inverse relationship to bond prices to interest rates. And as interest rates are climbing, you're going to lose your butt screwing around with bonds right now. By the time I was 26, I had $4 million worth of real estate, and then I lost it all because I didn't do it the right way. That's why I feel so strongly that buying real estate is an incredible way to build wealth, but only when you're debt-free and do business with people who have your best interest at heart. My friends at Churchill Mortgage have been showing people how to build wealth through real estate for over 25 years. Their whole program is engineered around having better information

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This is a paid advertisement. NMLSID 1591. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. In the lobby of Ramsey Solutions, Mitchell and Kristen are with us. Hey, guys, how are you? Hey, Dave, how are you? Welcome, welcome.

Where do you guys live? Indianapolis. Indiana. Welcome to Nashville. So good to have you. And all the way down here to do your debt-free screen. Yes, sir. How much have you paid off?

$161,000. Love it. How long did this take? 16 months. Man, you're killing it. Range of income during that time? Right around $225,000. Love it. How long did this take? 16 months. Man, you're killing it. Range of income during that time? Right around $225,000. Wow.

What do you guys do for a living? I'm a PA in cardiology. And I work in residential construction. Very good. Very cool. So I'm going to guess $161,000 might have included a little bit of med school. Yep. All grad school loans. All grad school loans for the pa good for you well done wow and so you come out and you start making serious med school type money and uh mitchell's doing pretty good too by the way

and uh you're looking at this thing the big pile of debt here most of the people you went to school with kind of yawn and go i'm gonna pay it off over 20 years and get a new car first and get a new bmw and a new house i can't afford yeah and instead you guys do this ten thousand dollars a month for 16 months what in the world lit your hair on fire? This is awesome. So my family, they've always incorporated Dave Ramsey or the Financial Peace University aspect into my life. Oh, you're a financial peace baby. Yes. Yes, I am. So I was fortunate enough to come out of my bachelor or my bachelor program without any student loans. And after we graduated college, Kristen decided that she wanted to go to PA school, and we had to take out student loans for that.

And during that time, we got married, and then once she graduated, we were full bore. Dave Ramsey, we are going to knock out all of our debt as quick as we could. So Kristen, you're marrying into this family that's a member of a cult. Yes, I could say that. What did you think? Was that a little weird to you? At first it was, honestly, but really it didn't take too long. We've been dating since I was 17, so they sort of slowly.

Okay, all right. They sucked you in. She didn't know what she was getting into. That's right. I love it. That's good. That's it. That's good. That's good. That's fun.

And so how long have you guys been married? It's been four. We're coming up on four years. Okay. And so PA school, though, when you come out past the board, start making money is when this goes into gear. Yeah. Pretty much the first paycheck I ever got went straight to the loans.

Whoa. Yep. Day one. That was the plan all along just knock it out yep knock it out knock it out knock it out and how old are you two we're both 27 oh man you're making two hundred and something thousand dollars you have a payment in the world you're gonna be so wealthy it's gonna be unbelievable i mean you look all the way back i mean mitchell your parents changed their family tree they sure did i mean they really did because you come into this with this idea and this knowledge that's so countercultural.

And everybody else in the culture is broke, particularly docs. All these PAs are broke. And they make all this money, and they have no money. But now you guys make all this money, and you're going to be able to help a lot of people with it, including change, permanently change your family tree. Very well done. Thank you. So I know your parents were cheering you on. Who else was cheering you on?

Honestly, we had a lot of people. A lot of people, a lot of family and friends were really supportive, a lot of coworkers. There were a few people that thought we were nuts. I worked a lot of weekends, and a lot of people kind of poked fun. But honestly, I would say a majority of people we know are really supportive. Well, the good news is in your field, you can pick up extra. Right. Crazy.

Right. And or not pick up extra. That's your choice. So you can control work like no one else, so later you can work like no one else. And really, residential construction is booming right now, too, in Indy. So it's the same thing. Same thing. You make hay while the sun shines, for sure is booming right now, too, in Indy. So it's the same thing. Same thing. You make hay while the sun shines, for sure.

So, well, you guys are incredible. What a sharp rock star couple, man. You guys are awesome. Thank you. Very, very, very well done. So you're making good money. You got no debt. What's the first big thing you're going to do to celebrate and go yahoo?

So, actually, we cash flowed a vacation to Belize. Oh, nice. We stayed at a small private resort that was about a month and a half ago just got back yep that was our first thing and and now we're planning a trip to italy as well there you go very good very good nice one two punch okay well and you can do it and it doesn't it doesn't even you don't even notice it hardly because you don't have any payments. Yeah. I mean, it's just, there's all kinds of wiggle room in your life. You know, you've got margin. So, well done, you guys.

Wow. Well, very cool. Very cool. What do you tell people the key to getting out of debt is? Obviously, you have to stick to the budget. The first three months are the hardest part just because you don't know your exact numbers. But as long as you can get through those first three months, then you can really set up a plan.

But Kristen found a way to help get us through it as well. Yeah, one little extra thing we did, we did the budget religiously on every dollar. But then after a while, we sort of felt like money was kind of evaporating. So I made a net worth spreadsheet. And it was interesting because we started out negative net worth, which was really depressing. But then, like, partway through, we turned positive, and we got to see that grow, even though our bank account wasn't growing at the time.

So for us, that was really encouraging. Very cool. Very cool. Well, that net worth thing is a good measure, especially now at this stage, because you're heading towards millionaire status. You'll be there soon, very quickly, as a matter of fact. And we'll give you a copy of Chris Hogan's book, Retire Inspired, because that's where we want you to go towards that.

Call in on one of our Everyday Millionaire theme hours and tell people how it all changed and what you did because you're an example of what can be done. And really, for the millennial generation, there's so much negative stuff out there about millennials, and yet I look across this glass like I'm looking at you guys right now at some of the smartest, most hardworking, most devoted people I've seen in any generation that are millennials. I'm talking to a lot of people standing where you're standing that are under 30 years old and are 100% debt-free and killing it.

And you guys are on the way. Congratulations. Thank you. Very on the way. Congratulations. Thank you, Dave. Very, very well done. I'm very proud of you. All right, Mitchell and Kristen, Indianapolis, $161,000 paid off in 16 months, making $225,000. PA School, done. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free scream three two one we're debt-free wow i love it man oh man oh man that is absolutely fabulous good job you guys very good job i don't know if you know this or not but we now have a place on our website where you can find all of the podcasts in the Ramsey Network. A lot of you didn't realize how many podcasts we've got coming out of here with the Ramsey personalities, and they're really good. So if you're someone that likes to make your time efficiently used

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It's just as exciting and nothing happens. Yeah. The Dave Ramsey Show, Entree Leadership, Retire Inspired Business Boutique exciting and nothing happens. Yeah. Now the Dave Ramsey show, Entree Leadership, Retire Inspired Business Boutique, and the Ken Coleman show. Five of the best, most listened to podcasts out there. You can check them all out at DaveRamsey.com. Don't miss them. This is the Dave Ramsey show. Okay, I need you to listen to this. Because one normal routine that everyone does can cause total chaos in your life. I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and every search you're doing online.

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You can be secure in seconds. Download Hotspot Shield by Anchor Free today. Meredith is with us in Portland, Oregon. Welcome to the Dave Ramsey Show, Meredith. Hi, Dave. Thanks so much for taking my call. Sure. What's up? My question is about downsizing my house.

I am a single mom, and I've got three kids in various stages of going off to college. And their dad and I have an agreement that he will pay their tuition, so I don't have to think about that. I just have to get myself set up for the future. So I'm currently on baby step number two, but the youngest goes off to college in two years. And I'm trying to figure out if I should downsize my house and sell it and buy a condo. And I guess the main reason I'm considering it is that my house is worth about $425. It's really gone up in value since I bought it. But I worry about downsizing and not having a place for the kids later on. And also a lot of the condos in my area have high HOA fees.

And I just wondered if you had any thoughts about that. I would not keep a big empty house for people that might come visit someday. I would keep a big empty house only if you want a big empty house sharon and i are empty nesters we live in a large home but we enjoy the home we use it for all kinds of events we use it for friends our family comes uh but we did not uh you know we built it as our kids were leaving home we upsized as our kids left home because we wanted the house, though. It wasn't, you know, that. But if you're thinking, oh, I need a place for them to stay, the three nights a year, they can stay in a hotel.

I mean, you can figure that out. You need to build your life around you, not around people who might visit. So what do you want two years from now? Okay. What do you want? My main worry is that my mortgage just feels like unreachable. I feel like I'm never going to have it paid off. So that's my main motivation.

How much do you owe? I owe $290,000. And what do you make? I make about $60,000 a year. How old do you owe? I owe $290. And what do you make? I make about $60 a year. How old are you? I'm 46. Okay. And so if you want to downsize to have a smaller mortgage and less property to maintain,

and you can find something with the HOA fees that seems reasonable to you, and the big trick there is also make sure the HOA is being managed well. Probably 50% of them are horribly managed. How do you find out about that? You're going to have to dig in with the management company that's managing it and actually look at the budget before you buy. Because you can buy into something and it's been mismanaged and the HOA fees will go through the roof

because they have to come back in and clean up the mess that the HOA didn't take care of before. Like if they're not putting money aside for roofs and then they have to put a roof on the whole condo, all of a sudden that's going to show up as special assessments. You see what I'm saying? If you don't do your capital reserves and that kind of thing and get ready so you've got to look at that kind of stuff a real a good real estate agent a good realtor can help you analyze the hoa and make sure it's being run

well and i would be concerned about that especially since you're concerned about the high fees okay right and high fees can mean that it's just a high cost in the area to manage some of the attributes that the HOA is providing, some of the amenities that they're providing, but it can mean mismanagement. Okay. And I'm involved in, I mean, we own a bunch of property and we're involved in a bunch of different HOAs, and I would say 50% of them suck. They're just bad. Wow.

And it's always got some guy some guy who doesn't have a life who's too much involved you know one of the homeowners he's really like barney fife he's got his one bullet and he needs a job you know he needs to get a life and they're like involved worried about everybody's bushes and stuff you know it's just crazy there's all some you know some where you park there i can't believe you parked there there's always some barney fife involved so you just have to be you got to know what you're getting into with an hoa can you tell i'm not a fan i'm not a fan of it yeah that's what i was just is it do you advise i'm not i'm not no i mean my house that i live in has got an hoa you know but but there's one benefit to living on a piece of ground you don't have to put over

that crap you just manage your own stuff you know instead of having everybody else in your business and uh it's just it's Peyton place half the time and we were like I said we're in a bunch of them some of them are nothing you know I've never hear from them and they manage things well and the budget's proper and no issue at all and then others there's something going on all the time and it's not not even to me I'm done my stuff's fine I take care of time. And it's not aimed at me. My stuff's fine. I take care of my stuff. But there's always some kind of drama. And so you just want to look at that, and the good real estate agent can tell you all that.

And they can also tell you if you're there. But it sounds to me like you like the idea of a lower price and less square footage to manage and heat and cool. The only reason you would keep the house you're in what you described to me would be for people that are going to come back and visit and i would never do that let them get a hotel you can buy them a really nice hotel room and pay for it cheaper than you can maintain all those empty rooms 12 months for them to stay there four nights and it just doesn't make sense at all so hey thanks for the call sorry i got on my hoa soapbox all right let's see tony's in chicago hi tony how are you hi david it's a pleasure to speak

with you how are you today better than i deserve how can i help i have a concern in regards to my parents um actually in oh nine they lost their house through the whole housing crisis uh So the last eight years, they were bouncing around between renting houses and living with family. And then the last two years, they bought a house. I don't believe that they can afford it. I just saw the mortgage statement, and they are late on their mortgage at least one month, maybe two months throughout the last two years. I'm not really sure what to do about that. They have no savings for retirement, no life insurance. Are they inviting you into the conversation?

No, no. I mean, kind of subtly playing your podcast while I drive my mom to work to try to give her the hint, like, hey, you guys should probably, you know, get your life together so we're not stuck with no burial costs and things like that. Yeah. Well, it's hard to watch people you love do stupid stuff, and they didn't lose their home in 08 due to the housing crisis. They lost their home in 08 because they were in a situation they couldn't hold a house.

I didn't lose my house in the housing crisis. You didn't lose yours in the housing crisis. So they lost it because they made bad decisions, and now they've made another one is what it sounds like. Have they got a home they can't afford, or have they not managed the money well? They're not managing money well. Together, my mom and dad probably bring home about $40,000 total. That's probably $20,000 less than they were making when they lost the house in 2008.

And what do you think this house payment is? It's about $1,100. Pretty steep for $40,000. Yeah, and he's got a 72-month car loan on his current car, which is probably a couple hundred, plus he's got a loan on a car that's in the garage that doesn't even run. I'm sure credit card add up to a lot of zoo. So it sounds like you know what they should do,

but the trick is getting them to do it. Correct. Yeah. Okay. All right. Well, the only way I know how to enter a conversation like this is you can't use your son, I'm scolding my older parents' voice. Okay.

You get the powdered butt syndrome. Once somebody's powdered your butt, they don't care about your opinion about money or sex. And so your parents weren't really asking. And so it's just like, let's pretend they're not your parents. Let's pretend you've got some older friends at church that are the same age, and you were observing this behavior. How would you approach them? Very delicately, would you agree?

Correct. And instead of driving a bulldozer conversationally through the front of their mouth, that won't work. And so just your only option is persuasion. And the only way I, the best persuasion I've ever seen is stuff like you're doing, and that's, you know, leave a book on the coffee table, drop a podcast out there, that kind of thing. But the other thing you can do is just start telling them about the times that you made mistakes

and how bad you felt, how ashamed you felt, how scared you felt. And then when I stopped doing that, I started getting on a budget, and I cut up my credit cards, and I sold this car. And whatever your story is, don't talk about what they're doing that's dumb. Talk about what you used to do that was dumb and how bad it felt and how you don't do it anymore and how great it feels now. And now my wife and I are getting along a lot better if you're married and you know now we're on a budget and our communication's way up and wow and it's just talk about because they can't

really your story is not condemning to them it's inspiring but if you ever had a friend that lost weight and they tell you about their story it makes you want to go get more fit right but if they come in wagging their finger and go you shouldn't eat that pizza then i'm like hey formerly fat person get away from me i'm eating my pizza you know and so you know don't be don't be that guy right that's what we're talking about here so i'm proud i'm glad you lost weight i'm glad you got control but don't come busting into my life, busting my chops, without permission. You have to get permission to enter people's lives. That puts this hour of the Dave Ramsey Show in the books. Hey guys, this is James Childs, producer of the Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country.

To find one near you, head to DaveRamsey.com slash show. Are high healthcare costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your healthcare costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accredited organization CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and Thank you. visit chministries.org. That's chministries.org.

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