The Ramsey Show - App - Are Car Subscriptions a Better Deal Than Leasing? (Hour 2)

Episode Date: July 18, 2018

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Live from the headquarters of Ramsey Solutions, this is the Dave Ramsey Show, where your money and your life are the focus. Sitting in for Dave, I am Chris Hogan. Happy to be with you. But America, we want to hear from you. So if you've got a question about life or money, call us at 888-825-5225. Again, that number is 888-825-5225. Again, that number is 888-825-5225. I'm so excited to be here with you all just to be able to walk through and talk through some things that we have to do to be able to take advantage and make progress with money.

But I'm doing some research as I do each and every day, and I run across an article. And the article was talking about this new craze with cars. Now, I know some of you out there, everyone loves cars, some of us a little bit too much. But if you're not aware, we teach people to save up, pay cash for a car so you don't have a payment. You don't have to pay the penalty of interest that you typically have to pay if you borrow money. So you save up, pay cash and you don't have regret and you don't have a payment. But as I'm doing my research, I run across something and I have to do a double take. Because here is the headline of the article.

With car sales dipping at over 2% this year and fewer millennials getting behind the wheels, certain brands are starting what's called car subscriptions. Again, hear this right, car subscriptions, allowing drivers to swap cars in and out at their local dealership whenever they want. Now, when you hear this initially, some of you may be thinking, well, oh, this sounds like a good idea. But you and I know that the trouble is in the details. When you start to dig into this, anytime something sounds too good to be true, the reality is, is that it's probably not true. Digging into this, I look at it and what this does is it helps people kind of kind of give themselves the excuse of being able to change cars more frequently. I mean, people love that idea. I

mean, they come out with a new car each and every year to make you feel bad about the one that you have. Now, I am not in any way saying that buying a car is a bad thing. I want you to buy it with cash. I don't ever advocate using debt to get a car. I've done that kind of stupid before, and I've been caught up in it and had almost a $700 car payment at some point in time. And so I knew when I untangled myself from that over 13 years ago that I was never going to go backwards. But looking at this and talking about this car subscription, it's touted as, well, it's going to be less expensive than buying or leasing a vehicle. And I start to dig into it. And some of the costs associated are

it's between $2,500 and $3,700 per month, America, per month. There are also some restrictions on where you can take the vehicle, how many miles you're allowed to put on it. And they also have in here that you can be tracked because obviously the car dealership or whatever is going to want to know where you are at all times with their asset. And walking through this and looking at it, I know it sounds really, really good. But the reality is, is that we've got to learn how to do the math. We've got to learn how to be able to walk through and truly understand how does this really work? And so looking at this, having the restrictions of where you can go, how long you're allowed to be gone.

Oh, one of the plans in here that I read about said that you can't have pets in the car. Okay, you can't bring Fluffy with you, or you can't bring Fido with you. That's a little bit too much control. So here's what I want you to do. America, I want you to save up, get intentional, save toward a car, save a car payment each month as you pay yourself in savings, and then go pay cash for a vehicle. Don't fall prey for these. This is called a gimmick. This is a way for car dealers to be able to move more inventory off the lot and to keep people coming back for more and more.

You and I know the fees associated with this are where the company is going to make its money. So let's not fall prey to that anymore. Let's learn to do math. Let's be aware. But let's keep ourselves under control so we don't wake up feeling regret later. America, this call, this show is for you, and we want your call. We'd love to hear from you. If you've got a question, give us a call at 888-825-5225.

And I'm going to the phone now. I've got Kim on the line. Kim, how can I help you? Well, hi, Chris. How are you? Oh, I'm focused and not finished, young lady. It's good to talk to you. Well, you too.

Thank you for taking my call. I just want some advice. My husband and I are in our 50s. We both are. We both are. We both are high-income earners. Okay. My husband has been struggling with keeping a job. He's had seven jobs in 10 years.

Mm-hmm. And we haven't really been the best with our money. How do we, you know, every time we take four steps forward, we get knocked back 10 or 12. Okay. How do we stay motivated? You know, every time we take four steps forward, we get knocked back 10 or 12. How do we stay motivated? We were in baby step two, and we were doing really well until he lost his job in December. I just, you know, how do we stay motivated to look in the future when he does get another job? Just how do we stay on the baby steps and stay motivated?

Okay, good, Kim. Well, you say you all are high-income earners. What's the household income? Probably $250,000. Okay, all right. And you say you're on baby step number two. And so for those listening out there, it means that you've got some debt. What debt do you have left? Well, so we have a mortgage, and it's about $75,000.

Okay. And what else do you owe them? We have mostly student loans. Okay. How much student loan debt do you have? Oh, I've got about $35,000, and my husband has about $50,000. Okay. All right.

And so with your debt load, these are the three debts that you all have remaining? No credit card or no car loans or anything like that? No. Okay. No credit card, no car loans. Okay. All right. So here's the deal.

With where you are right now, you all are dealing with larger debts. We teach people to attack debt using the debt snowball. So you want to list them out smallest to biggest, and you want to attack the little one first because getting out of debt is not about math. It's about momentum. You all have larger debts. Kim, you say you've got $35,000 in student loans, and then your husband's got around $50,000. So now dealing with bigger debts, you've got to stay motivated.

So how do you do that? I want you all to step and take a look at the debt that you have and the amount of money that's leaving you in a payment. And I want you all to start to dream about what could you do with that money if it wasn't leaving you? You see, redirecting it, it'll allow you to take more control. And you guys need some accountability with each other. So sitting down together, having a budget meeting, talking about the progress that you're making as you're attacking the debt, what that'll do is that'll allow you all to stay focused, to kind of see where you are and you keep going. You know, motivation is an interesting thing. We are motivated internally. That's the best kind.

That's where you make a decision for yourself and for your family, beginning to understand that you've got some things you want to accomplish for your family. You've got some dreams. And so I would write down some goals. When do you all plan to attack this $35,000 in student loans? With your income, household income of $250,000, as Dave would say, you've got a big shovel. You've got an opportunity to be able to attack some debt. What you have to do is make a decision. would say you've got a big shovel. You've got an opportunity to be able to attack some debt. What you have to do is make a decision. Stay focused, stay accountable, and stay connected to the big picture. You all can do this. I know you can. You're listening to The Dave Ramsey Show. Thank you. Are high health care costs getting you down?

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You can send it to us on social media at Ramsey Show. We want to hear from you. And for those of you that are watching on the YouTube channel, we'd love to hear from you as well. But I got an interesting question via social media. Larry sent in, Chris, I'm tired of paying on my student loans. Can I just stop paying them? Now, I read that, and obviously, in America today, we've got a student loan crisis. It's to the tune of almost $1.3 trillion. We've got an issue.

But looking at this and, and, and seeing it, I can even understand being tired of paying on student loans. I mean, you can, those, those loans can be astronomical.

They can be large in size. I've talked to couples that are two, $300,000 in debt with student loans, but he asked, can I, and I'm considering just stop paying him. And you look at this and I can understand being tired, but you can't just stop paying on student loans. Now, there's a couple of reasons.

First and foremost, from a legal aspect, you can't bankrupt student loans. It's one of those things, it's very, I've heard of a few, handful of instances that were very extreme where it allowed you to include student loans into bankruptcy. But here's the thing. You also attended the school. You utilize the service. You went there, you got your education or you got some education and the student loan is the obligation you have for that service. And so we've got to make sure that we're taking care of business, that we're doing the things we need to do. And I can understand being tired of them. But what we want to do is have the proper perspective, address the way that you're living,

get intentional, and let's get them out of your life. Let's attack them. Let's be intentional with it. Make a list from smallest to biggest and get intentional. And I want you to take what's tired and turn it into irritation and frustration and attack that student loan debt. Because I know you can do it. On my show, I'm talking to millennials that are paying off student loans, baby boomers that have gotten serious. And when you tighten up your belt and you get motivated, there's nothing you can't do.

So, Larry, no, don't stop paying on your student loans because you owe the money. But I do want you to start moving forward faster and attack them and get them out of your life. All right, I'm going to the phone lines. I've got Melissa on the line from Chicago. Melissa, how can I help you? Hi, thanks for taking my call. I just have a question about some bonds that I've had since I was a kid. Okay. I just have a question about some bonds that I've had since I was a kid.

They're probably about maybe 28 to 26 years old, so they haven't fully matured yet. The average interest rate runs between 2% and 4%. So I was wondering if it's better for me to let them be in there until they mature, or like that 30 years is up, or if I should pull them now and invest them in a good growth stock mutual fund. Melissa, how old are you? I'm 28. You're 28 years old, calling in to this show, talking about bonds. Where did you learn about money from?

The Dave Ramsey Show. That is fantastic, because what you're asking is an advanced question, and I love this. How much in bonds do you have? Do you know the dollar amount? Yes, about $8,800. $8,800. Okay. And maturity-wise, you have knowledge of them.

When are they scheduled to mature? A few of them in 2020. That's where they'll start to begin to end and then all the way up until 2026. Okay, gotcha. And are you doing any investing outside of these as well? Were these received as a gift? Yeah, from when I was a kid. I am. I'm on Baby Step 6. Okay. So I'm already putting 15% of my income into retirement. So I do have a Roth IRA, and that's in addition to the 8,800 in bonds. Melissa, you told me you were 28 years old. Yes. And you're on Baby Step 6 already.

Yes. That is fantastic. Thank you. That means you are, yes, you've got an emergency fund. You've attacked Yes, you've got an emergency fund. You've attacked debt. You've got an emergency fund. And now you're investing. That is fantastic.

Here's what I'd say with the bonds. You've got 8,800 that were received as gifts. And right now, a majority of that is set to mature in 2020. So we're just a few years away. I would definitely get connected to a smart investor pro. These are investment professionals that have the heart of teachers, just like Dave and I, and they guide people the right way. Grab up those bonds, go in, sit down, have an appointment with that smart investor pro

and walk through the nuances, meaning looking at the details. What are the surrender charges if you were to try to cash those out early, what are the penalties and fees and the dollar amount that you would end up losing? So I would encourage you definitely to do the math, walk through, have that awareness. And I'm pretty sure as you walk through it and see it, it's okay for that money to sit there, especially with you on baby step number six, already moving forward and doing things the right way. So I love that. Keep up the great work. I'm very, very proud of you. Let it sit there.

Let it continue to grow. Once it matures, now you can look at moving that money and getting it somewhere where it's going to do a better job for you in growth than just the 2% to 3% that it's getting right now. Thank you. We're going to continue on the phones. Next up, I've got Angel. Angel, how can I help you? I've got a really quick question about credit card debt.

I've got two different credit cards, one on my husband's name, one on mine, and it's a total of about $8,000 debt. We keep getting these offers for 3% until 2019 and things like that. I just wondered if we should consolidate or just leave them the way they are. Okay. And, Angel, how much do you owe on those credit cards, each one? One's about $2,800 and one's about $5,000. Okay. All right.

And so you all are looking at it, and why are you thinking about consolidating them? I just thought all those little offers were very enticing. Ah, they are. Just trying to lower the interest rate. That's right. And why would you want to lower the interest rate? To try to pay it off rate. That's right. And why would you want to lower the interest rate? To try to pay it off faster. That's right.

Okay. So you and your husband, you all have that mindset that you know now that this debt's not your friend, right? Right. Right. It's not your friend. And so looking at it and thinking about consolidating, listen, I'm a former banker. And so when you look at the math and you start to walk through it, the fuzzy math says that consolidating it makes sense because instead of dealing with two, now you just deal with one. But when you do the math on it and you start to

understand, when you consolidate, it's a con because what you end up doing is you end up lengthening the period of indebtedness that you're in. That's how they do the math. For example, if you've got four credit cards and you're paying out, let's say, $1,200 a month, but if you consolidate them at the bank or some institution, I'm not just picking on banks, I'm picking on anybody that does loan consolidations. If you're paying $1,200 a month on those four credit cards and you look at doing a consolidation and they show you that your new payment would be $800 a month, now you go, oh man, that's a $400 swing. This is a smart deal.

Not so fast, my friend. Because what's happened is they're not showing you how much longer you're going to be in debt making that payment. So, Angel, no. Don't consolidate those debts. Leave them separate and attack those things smallest to biggest. You said you have two credit cards, one totaling $2,800 and another one with $5,000. I would say attack. Make the minimum payment on the $5,000. Throw every extra dime you can toward that $2,800 balance and get this thing out of your life. But do me a favor. Once

you pay it off and get it out of your life, close it. Okay, shut it down. Get it out of your life and keep it out of your life. Too many people are tempted just to hold on to it. And they say, well, you know what, Chris, I might need it for an emergency. No, that's why you have an emergency fund. That's why we teach people to do that in baby step number three. So I hope I'm clear on this. We don't want to consolidate. We want to stay focused and we want to make sure that we're walking through the process the right way that will allow you to be firm where you are and you'll start to feel better about the progress that you're making. All right, I've got Lisa on the phone in Phoenix.

Lisa, how can I help you? Hi, Chris. Thank you so much for taking my call. I have what I think is a simple question for you. Okay. My husband and I are both 56 years old. We are both self-employed. Okay.

And we make almost $200 a year. I'm the primary breadwinner. I make about $150, but my mom is 80, and she may need more help than I'm giving her now financially. We have zero debt, but we also have zero savings. Okay. And I'd like to get your thoughts on maybe the best long-term investment for my husband and I to secure our future. Ah, okay. Listen, I want you to do me a favor, Lisa, and hang on the line.

This is a great question, and a lot of people have the same type of question and scenario. And so we're going to walk through that. We're going to talk to Lisa, walk through, what do you do? How do you help yourself as well as help your family and do things the right way? This is a big question. This is a big issue. And we're going to help her as soon as we come back. You're listening to The Dave Ramsey Show. Did you know, statistically, when it comes to life insurance and protecting your family,

that women are more likely to be uninsured or underinsured than men? This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day. This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance.

They shop the top term life companies to find the lowest rates available. You can compare rates online at zander.com or call 800-356-4282. This is something every family has to deal with. That's zander.com or 800-356-4282. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in. And before we went to break, I was on the line with Lisa, and Lisa was describing to me her scenario. How do you get started with investing?

She told me they have a household income of around $200,000. She's the primary breadwinner. They're both self-employed, but they want to help themselves but also get ready to be able to help their 80-year-old mother. Lisa, did I recap that about right? Absolutely, yes. Thank you. Yes, ma'am. And so how much do you and your husband have put away for retirement right now?

Well, we have probably $30,000. We just had a flood in our house, so we kind of depleted a lot of our savings. Oh, my. You had a flood. We did. The entire house flooded. Oh, my goodness. It's all better now.

Yes. We don't put any money in the bank again. Yeah. Did you have the proper insurance on it? We did, yes. Okay. I am so sorry. That had to be devastating to you all to walk through that process.

Did you have to replace everything? Not everything, no. We were pretty lucky. We did replace a lot, but we didn't lose everything. Okay. Could have been worse. Yeah, it could have. How much out-of-pocket did you all end up spending?

Probably close to $90,000. $90,000. Mm-hmm. Okay, and so this was money, obviously, that you pulled from your retirement accounts? It is. Okay, okay. So you had life happen in a major way. Did you have insurance prior?

Why did you spend so much of your own money? Well, we had to replace our floors, doors, walls. I mean, really kind of from the ground up. Okay. And with the insurance money that we got, we pulled our resources and got everything done that we wanted to. We got some extra things done in the house, of course. Okay. All right. And so now what you end up doing, having life happen, you're now trying to rebuild. You're trying to tighten the belt and get motivated now to start to move forward. But you mentioned your mother, who's 80 years old. You all are trying to not only get prepared to help yourself, but also help her. Does she have anything saved for retirement? No, unfortunately, my mother is still working full time and she just didn't make some

good financial decisions. Okay. She's 80 years old. She's 80 years old and working full time. Oh yes. My goodness. Yeah. My mother's amazing, thankfully, but you know, it's not going to last forever. Right now. I'm grateful that she has a physical ability and mental capacity to be able to do it. Uh, this is one of those scenarios where you step back, and it's so easy, Lisa, to get overwhelmed in a scenario like this. But I think, what do you do? How do you begin to rebuild? You all haven't dealt with a flood, which I'm sorry to hear that.

That had to be frustrating as well as devastating. But I think you do it the same way you did initially. It's where you look at the hand that life has dealt you, the situation. You sound strong. You all sound focused. Now it's a matter of rebuilding. Now it's a matter of starting to get intentional, tighten up your budget. I mean, that budget is going to be the first place to start where you get focused and you say,

okay, we're going to start to put money back in our 401k. We're going to utilize the Roth IRAs as we can. And the same would be said for your mother. Helping her to budget, helping her to understand her lifestyle. But the best way for you to be able to help her is by first making sure you're helping yourself. And I applaud you for wanting to help your mother. But I think you and your husband sitting down together, Lisa, getting focused, taking the steps of budgeting, taking the steps of starting to really understand, can we make extra money to make up for the $90,000 we ended up spending out of our retirement accounts to fix our home?

You start to identify the options in front of you of what you can do, not looking at what you've walked through. And I think it's a matter of understanding your windshield is much bigger than your rear view mirror in a car. And so you want to focus forward. Focus forward, identify the options, and really, really stay committed to what you're able to do. Lisa, thank you again for the call. I hope you all get serious and get plugged in.

And if there's a way that we can help, let us know. I'm going to continue on the phone lines. I've got Carolyn on the line from Richmond, Virginia. Carolyn, how can I help you? Hey, Chris, thanks for taking my call. I'm actually looking for clarity around my retirement financial numbers. I do have an appointment tomorrow with my ELP, and my husband and I have been running some numbers, and I'm looking for how do I differentiate kind of between what seems logical to me and my number that I get from plugging my information into the RIQ. Okay.

If I'm thinking that in retirement, say I wanted to draw $10,000 per month, logically I'm thinking if I'm earning 10% and I have $1.2 million, I would be able to draw $10,000 a month and keep that kind of that golden egg there still. But when I plug my number into the RIQ, I'm getting more that I need several million dollars. I think it was like up to four. So I'm wondering, are there different variables I'm excluding or did I use the tool wrong? Okay. And then also, you know, can you just help me kind of understand that math? And then is there an equation that I can do that says, hey, if I have this amount of money in the future, how do I determine what that amount is going to be worth? Okay.

And Carolyn, tell me again, how old are you? I'm 51. 51. 51. And right now, how much do you have saved up toward retirement? My husband has a pension, so excluding that, I'm at about $420. Okay. And do you know the current value of that pension right now?

No. He actually was looking that up today. Okay. Okay. Good, good. Because, you know, right now what you're doing, you're walking through and you're doing the math on how much we have and what we're able to do. Now, first and foremost, let's talk about this. Because you're working hard, you've saved up.

Now it's a matter of how much can we live on per month? The RIQ is the Retire Inspired Quotient. That was the tool that we developed around my book, retire inspired to help people understand retirement's not at age, it's a financial number. And people didn't know how much they were going to need. So they weren't really doing as much. They weren't moving forward. So we developed this free tool at my website. You can go to Chris Hogan, 360.com and find out about the RIQ, but all you have to do is plug in a few data points, how much you want to live on per month and how many years you plan to retire and how much you have saved up.

So Carolyn has walked through this and now she's saying, OK, I've got some questions. I want to go deeper into this because that's what the tool was designed to do. Help people raise their awareness to see it and understand it, but then move forward by connecting with a smart investor pro, which she's doing in the morning. I would say there's a couple of things there, Carolyn. Remember the RIQ is a tool. So you're able to plug in some things and tweak things as you want. So at the bottom of there, I would take a look at the withdrawal rate, the rate of growth, all those things that you've plugged in as well.

But let's start back at the top of this. If you've gotten yourself debt free, and that's what I want everyone to do before you retire is get everything paid off. And I'm talking about including the house. Now you start to identify how much am I going to need to live on? You think about that. Now, why would you need 10,000 per month? Now, you may want to travel a lot or some things that you want to accomplish. That's okay. But I think that's the thing that you're looking at. There's a phrase out there that you don't want to steal or you don't want to kill the golden goose. That means you don't want to pull so much out

that the money that you have that's growing, you actually stop it from growing as much. So walking through this process with the SmartVestor Pro, you'll be able to dive in and see. I would encourage you to go back through, as I said, look at the data sets that you have in RIQ. What do you have it set toward? And then look at how much you're withdrawing. But I'd take it a step further and say, make sure you include your husband's pension. When it asks you how much you have saved toward retirement, you want to use all the money you

have saved up. And so you can find out the present value of the pension as it stands right now, and just lump that into how much you have saved. So add that along with your 401k and now you'll start to get a true life indication of what you all have saved up for retirement. And I hope that helps because walking through this process, again, of helping people raise awareness, it allows them to feel more confident because if I know what I need to start putting away each month, I can start doing it.

The beauty of the RIQ is that it shows you that number, but it takes it a step further. It shows you your big number, but it takes it a step further. If you are behind from saving for retirement, it will also show you how much you need to be saving now to get there. And so a lot of people have had their eyes opened when they see that and they start to identify, man, we've got work to do, but hey, it's something we can achieve. And I think anytime we start to take positive steps forward, we start to gain confidence. We start to believe that, hey, this is something I can do. And so if you're married, I want you doing it with your spouse. If you're single or newly single, hey, sit down, walk through this process. Look at it and have an understanding of where you are. Find an accountability partner.

And then you guys together can start to cheer each other on and move forward with confidence. That's the key. Retirement's not an age, it's a financial number. You're listening to The Dave Ramsey Show. Can you believe this real estate market? Home shopping has become so competitive. There's a ton of new buyers in the market, and bidding wars are the new normal. Folks are under a lot of pressure to offer more money to get into that house. Don't do that. Get certified instead. The Churchill Mortgage Certified Home

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NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Hello America, you are listening to the dave ramsey show where we are focusing on your money and your life we'd love to hear from you if you've got a question give us a call at 888-825-5225 again that question that number is 888-825-5225 well i want to go to social media because I had a question here from a gentleman. Joe on Twitter says, do you have a formula for budgeting for a vacation? We're looking at this.

Do you have a gauge for how do you plan for a vacation? Well, it's summertime, and people obviously are looking at and thinking about how do we go relax? How do we go kind of begin to kick back? We got things we want to do. The problem with this is, is that if you're just now thinking about it in July, you're a little bit behind the eight ball. Like you, you waited a little bit too long. And so what I would encourage people to do is really sit down this year and start to think, what do we want to do next year?

Now I'm talking about vacation. So I'm making some assumptions, which can be dangerous. All right. You know what happens when you assume, but I'm going to say it out loud here, looking at and thinking about going somewhere for vacation as something you want to do. Once you're out of baby step two, you've attacked debt, got it out of your life. And you've done baby step three, where you've built up an emergency fund. Now you can begin to save and do some do some fun type things. But if you have debt, you've got $40,000, $50,000 in credit card debt, oh, vacation.

Vacation has another definition if you're in debt. What I want you to do is look at vacation as the absence of work. I'm going to introduce you to a new phrase. It's called a staycation. This is where you are not going to work and you're not working. So you're vacationing from work, but you're also able to relax so you can recharge and so you can regroup and move forward. And so my formula is set a dollar amount. If you're out of debt, how much you want to, what's it going to end up costing you to go on vacation, to take the trip to Florida or to go visit family and start to break that down monthly.

And now you start to budget and you start to plan for it. You set aside that dollar amount so you're able to take care of business and you're doing the things you want to do. So, again, if you are planning for it, sit down. That needs to be a part of the budget discussion as well as the action that you take. All right, I'm going back to the phone lines. I've got Brian on the line from Chicago. Brian, how can I help you? Hey, how's it going? Thanks for taking my call. Yes,

I'm 29. I make $100,000. I don't have any debt outside of my condo. Okay. And I put 15% towards my 401k that gets matched from my company up to 5%. Okay. I'm getting married next year and my fiance's got, uh, she's an orthodontist. She's got about 280,000 of student loans. Um, and she's making about two 40. Okay. Um, the plan is roughly that we would basically just live off of my income and take all of her income and pay off the debt that way. Okay. You think I need to be doing some things like taking down my 401k in the future and just putting extra money towards that or any extreme measures? Okay.

We also have a car that's fully paid off. Okay, good. We've got like 70,000 miles on it. Okay. Brian, you... Any ideas, or is that a good plan? Yeah. Okay, so let me recap here.

You're 29 years old. You make around $100,000. No debt outside of your condo. You're saving into your 401K. You're engaged to be married to an orthodontist who has around close to $300,000 in student loan debt. Is that right? Yes. Okay.

And her income right now is around $240,000. Yep. Okay. You must love her. Right? I do. Okay. That's good.

And I like that you all are talking about this now and identifying that this is a large amount of student loan debt. I mean, this is almost like a house, isn't it? Yeah. OK, but you've thought it through looking at where you are because you've worked hard. You don't have any debt outside of your condo. You're investing. You know, so technically you don't have kids yet. So you're technically your own baby step number six uh but but looking and understanding that with her income because she's got a good income got a great income to be able to you all focusing all that money toward the debt you can knock this thing out very very quickly what would take someone 10 to 12 years you all can do in 18 months i think if you're seriously focused i really do and so what i what you're going to have to do, though, is you're going to have to keep life in check.

What I mean by that is whenever you get married, you all of a sudden realize you need more furniture, right? People start to think, well, we need another car because we're married. No, you don't. Drive the car that you have. You start to identify these wants. I want you all to pinky swear to each other that we're not doing anything. We're going to do what we're doing the same way. We're going to devote all her money toward attacking that debt.

When we get that student loan debt paid off, now we can start to look and start to live a little. Does that make sense? Yeah. Yeah. Because, I mean, you. Would you recommend that I take down my 401k down to what my company matches and take that money and put it towards it? Not at all. Not at all. Or just leave it alone no sir i think you doing 15 you're dead on uh you're focused i mean you're 29 years old you are running this game you're moving forward you're going to be

a millionaire but you have to stay focused and not let up so again walk through it you all i want to encourage you as you're walking through and planning through with the wedding, do that with reasonable numbers. And again, we're not going backwards in any other way. You've got a big mountain in front of you, but you also have a big shovel. Once you get married, you can start to work that game plan to get started. Thank you again for the call, Brian. You have a great opportunity in front of you to remove student loan debt from you all's lives forever. Frank, great job. All right, I've got Cindy on the line from Modesto.

Cindy, how can I help you? Hi, Chris. So my husband and I were brand new listeners like last night. Oh, fantastic. Our minds are blown right now on kind of what we need to do and what direction and kind of what to tackle. I have one more year of school. I'm in the master's program. I'm 43. My husband's 45.

We do rent. We don't own. We've been feeling pressure from people saying, you've got to buy, you're in California. We actually rent a home last night, and we walked away just not feeling right. So we Googled Dave Ramsey and just found his stuff and realized, wow, we're doing it backwards. So I'm just kind of wondering where do we go from here? Okay.

Cindy, you said you're in the master's program. What kind of debt do you all have right now? I actually got a grant for this year, so I didn't take out any loans for just my final year. But I'm in $32,000. Most of that is subsidized, so I'm not paying interest on it. The car, I owe $9,000 on that, and we have a $6,000 credit card. Okay. All right. Now, I want to tackle something first.

You said you're brand new, you're hearing this information, and right now you all are feeling a little bit overwhelmed. I can understand that. I think the first thing you want to do is take a deep breath and really start to understand a couple of things that where you are right now is not where awareness, and I love that. I love that you all now are seeing things for what it is, and you understand you want something better for yourself and your family. So what would I do? I'd take a deep breath, and I'd start to get focused. I'd start to understand that I've got to begin to take some steps in the right direction, and that's why we have what's called the baby steps to allow you to be able to move forward with confidence. Now, I'm actually going to gift you, stay on the line, I'm going to gift you Financial Peace University, which will allow you and your husband to really start to plug in and understand exactly kind of where you are, but more importantly, where you want to go. So, you can do this one step at a time. Don't try to do nine things at once.

You do one thing at a time. And Financial Peace University, our nine-week course, will walk you through how to do that. I'm excited for you because with the $9,000 in car loan and the $6,000 in credit card debt, that's something you're going to be able to tackle. But you're going to do it intensively. You're going to do it very intentionally with your eyes wide open. So where you are right now doesn't have to be where you end up. I promise you've got a great opportunity ahead of you. Again, if you're out there, America, and you're wondering, how do I start to make this year a better year for me and my family financially?

Or if you're single or newly single and you want to figure out, all right, what do I do? Well, I'm going to tell you. You start to plug in, listening to the Dave Ramsey Show. Go over, look at Financial Peace University to really plug in and get together, to stop the money fights, to start to get aligned and understand what you can do and how to go about it. I want to thank you all for the call. Everyone that called in, thank you so much for that. I want to also thank Zach filling in as a producer and also associate producer, Kelly Daniel. I want to thank you, America, for all your calls.

This show is about you. It's about your life and your money. And I know you have an opportunity to be able to get better. We just have to do it one step at a time. If you've made mistakes with money, welcome to the human race. But you can still move forward. This is The Dave Ramsey Show. Hey guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carrying on 600 radio stations across the country.

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