The Ramsey Show - App - Are Dental and Eye Insurance Worth the Cost? (Hour 3)

Episode Date: March 27, 2019

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Music Music Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225.

Starting off this hour is going to be Debbie in Rockford, Illinois. Hi, Debbie. Welcome to the Dave Ramsey Show. Hi, Dave. I'm really looking forward to getting your advice on this topic that I have today. Cool. What's up? My husband and I are 54 years old, and we have a 14-year-old daughter that's going to be going into high school.

So we are considering moving into a better school district. Our house would probably sell at a pretty good price and we would make a decent profit on it. So my question is, what would I do with the profit that I make on my house in terms of baby steps four, five, and six? And also, if we do move, I don't think it would be our forever home, so I was wondering if we should rent or we should buy a home. How long would you be in the area if you were to move? Just for four years, just until she's out of high school. Okay. And is that area an area where you can make some money on the house in four years?

Yes. You would automatically move at the end of four years? No, not necessarily. I mean, we're looking to move primarily for education. If it's someplace we decide to stay, fine. If not, we'd be willing to move again then. Okay. And how much equity do you have in your current home that you'd get in your hands if you sold it?

Like in terms of the profit that we would make? Yeah. We would probably have a profit of about $175,000. Okay. And so you would move and you would put down all or most of that as your down payment. Assume you said you're on 4, 5, 6, so you're out of debt except your home. You have your emergency fund, so we don't need to use any of it for that. If you wanted to pull, you know, 15 or 20 out or something and kind of get her college fund started, that'd be okay.

But I'd put the rest of it as your down payment on the next place and no more than a 15-year fixed rate. And then let's buy the house like we plan to stay there. But that does not ever excuse paying too much for a house or buying a bad house or something like that. Let's buy a good house it'd be marketable when you get ready to sell it and um you know it's got a good floor plan you're getting a good price on it uh it's got a good location it's got good curb appeal those kinds of things so that when you do get ready to sell it whether that be five years or whether it be 10 years you've got something that's marketable and that you would have made some money

on but in the chicagoland area you would have made some money on. But in the Chicagoland area, you should have enough appreciation in four years to be glad you owned something rather than rented something. And there's a reasonable probability that you're going to be there longer than four years. Okay, so you would recommend potentially maybe buying the house then mortgage-free and not growing? Oh, if you could, can you? Pardon me? The school system you move into, could you buy a $175,000 house in your area? Yes.

Oh, that'd be awesome. Yeah. I just thought maybe I should throw more into her college fund and totally invest into that. No, she's 14. You got five years with no house payment? So it'd be better to pay off a house and then just invest into her college. If you had to choose, yeah. Yeah, but I mean, yeah, if you can buy a $175,000 house, I wasn't guessing that you could do that.

I was guessing it was going to be more expensive than that. But yeah, that would be wonderful. What's your household income? About $150,000. Oh, phenomenal. And your current house payment is what? $1,500. Okay. So, I mean, easily you start chunking $2,000. Oh, phenomenal. And your current house payment is what? $1,500. Okay.

So, I mean, easily you start chunking $2,000 a month aside. That's $24,000 a year. For five years, that's $100,000, not counting growth. This kid's going to school. Yeah. But we're also in our middle 50s. I didn't know how to do that in terms of... Well, if you just pay the house payment that you would have had into her college, you don't have to worry about it, right?

And you do 15% of your income or more into retirement, but you'd be fine. You'd be in great shape to do that. You'd make plenty of money to do both. Right. Yeah, you're going to be great. You should definitely do that that seals the deal man that makes it a no-brainer i thought i thought we're buying a four hundred

thousand dollar house with 175 down or something i didn't know what you're doing so that that could be just incredible ali is with us in raleigh north carolina hey ali welcome to the dave ramsey show hi dave it's nice to talk to you you. What's up? So I am a graduating senior. I'm graduating with a degree in public relations in May. I have about $45,000 in student loan debt. If I go right out of college into my degree field, I will be making about $32,000 to $36,000 a year. I have an opportunity to take a construction office job,

kind of being a jack-of-all-trades for about three to six months, making $6,000 to $7,000 a month, to start paying down some of that debt that really fall in your baby steps. Wait a minute. An office manager with a PR degree at a construction firm makes $72,000 a year straight out of college. No, no, no, no, no. I would be

doing like jack-of-all-trades kind of thing, being a runner for the construction site, doing some office stuff, being a fill-in person for wherever they need. For $72,000 a year? No. You said $72,000 a year? No. You said $7,000 a month.

I don't, I said. Did I misunderstand you? $67,000, no, no, no, you're right, $67,000 a month. That's what I was quoted. The job isn't anywhere near where I live now. It's out in Texas, and it's not fun. It's not a fun living condition, so that's why they pay higher. Okay, so you're getting prairie combat pay. Yeah, yeah.

So it wouldn't be, by any such imagination, it wouldn't be a fun job right out of college. It would be simply to pay off the debt, get going on that. I got you. Okay. So while I'm doing this, I would want to, you know, maintain certifications, get more certifications, and probably do some freelance work. You have certifications in PR? Yeah, you can get, like, accreditations in PR.

You can get different social media marketing certifications for the different platforms. Yeah, you can get that. Okay. Yeah. All right. So getting all those, doing some freelance work while I'm out there. I just, my, obviously I want to keep up on my resume. I don't know.

You have $45,000 in student loan debt, right? Yes, sir. I think if you will go into your career field, you'll be making close to what you're talking about within a couple of years. And I don't know why you need to do combat pay. Okay. I mean, if you want to do it for six months or something, that's fine. Yeah, that's what I was thinking.

That'd be okay. It's just kind of an adventure. But it's not even a cool adventure is what you're describing. But, yeah, if you want to do that, I mean, you're basically doubling your income for six months, and you probably could knock out most of that student loan debt and then just come home and then go. Gives you a head start a little bit. That's fine. But then dive into your other stuff.

I'm okay if you take your regular job straight out of school. I think you can do that and do a bunch of side hustle stuff in the PR front, in the SEO side of things, in the digital world, and I think you can make enough money to clean this up pretty quick on your own. Either one's okay. There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees, and we never turn off your data.

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That's puretalkusa.com. Well, coming up the end of April, our sold-out Entree Leadership Summit in San Diego at the Manchester Grand Hyatt. April 28th through May 1st. This is the top leadership event in America today. We have about 3,000 leaders attending. Our speakers are the best of the best. Peyton Manning, Simon Sinek, Sarah Blakely, who founded Spanx, one of the youngest women billionaires in history. Jesse Eitzler, her husband, best-selling author, Carrie Lorenz, the first female F-14 Tomcat pilot,

Marcus Buckingham, best-selling author, Strength Finders, Dr. Henry Cloud, best-selling author many, many times over, Boundaries is the biggest one, Patrick Lencioni, founder of the CEO of the Table Group, again, best-selling author, Ken Coleman will be speaking, Ramsey personality. Chris Hogan, Ramsey personality. I'll, of course, be speaking and doing sessions as well. It is going to be a massive event. You will not find another leadership event like this anywhere. The seats are sold out, as we said. What we do have is a waiting list, and we also have a grand event overflow.

Now, this is not your cheapo overflow. This is the grand hall experience, and it is going to be absolutely amazing. If you want to learn more, just text SU 2019 to 44 222 one word no spaces summit 2019 to 44 222 and our team will get in touch with you and tell you about the grand hall experience and what is available and so forth but this this event sold out like three months after we launched it a year ago. So obviously with a lineup like that and only 3,000 seats, it goes really, really fast. And so will next year's. All of these have done that each year because they're just, I mean,

we've had slam-dunk lineups at these things that are, they're events that I would go to if I wasn't speaking. I mean, they're that. They're absolutely incredible. All right, Alan is with us in Chicago. Hey, Alan, welcome to the Dave Ramsey Show. Thanks, Dave. Just recently I started doing a little non-retirement investing,

and it's not doing as well as I expected. I wanted to see if you'd give me some feedback. I had about $3,600 in an old Scottrade account, and I went on there after listening to you, put it equally into the four different types of mutual funds. Last July, it started to tick up a little bit, but then the rest of the year just gradually went down to about $29.50 was the value of the account. And then for this year, it has ticked up a little bit more, but I'm still not even quite

back to where I was when I put the money in those mutual funds. I did what you said. I went on, found mutual funds with a long history with with a high return rate a good strong history um not knowing the brands i just went with vanguard because i've heard that they've been around a long time and um so i just i don't know if if you'd say that's the way the market's been for the last nine months or is there something i can do because i want to put more money in these you know and invest but i'm not doing so well so that because I want to put more money in these, you know, and invest, but I'm not doing so well. So that's like why I put more money in there yet. Oh, yeah, I agree.

Well, part of it is the market. And the way you can verify that, what you want to be concerned with is if it's simply market gyrations, you just ride that out because you never do mutual fund investing with a nine-month window. You do it with a five-year and longer window. If you're not going to leave the money alone at least five years, you shouldn't be putting money in mutual funds because they're going to go up and down. The market's going to be up. It's going to be down. It's going to be sideways.

You know, for instance, in 2017, the market was up 19%. In 2018, it basically was even. I think it made one or two percent you know and so you happen to hit that that slack area there with part of this you're straddling there start we're starting to see some returns again but anyway the way i look at it is if i start getting concerned that a a group of my money is underperforming what what I'm going to compare it to is, yes, I want to look and say, okay, what did the S&P do during that same period of time? Okay? And if it went down more than what yours went down, then this is all market-related, right?

Right. Okay. And the second thing I want to ask myself is is you could look at mutual funds within a given area and say, okay, I'm going to look at aggressive growth funds. How does this fund that I picked compare to other aggressive growth funds during that same period? Right. And, you know, for instance, let's say you had an aggressive growth fund that went down 10 and everything else went up four percent well that's a 14 delta that's not okay okay but if your aggressive growth went down 10 and everybody else's went down nine well not to

panic okay no big deal you're basically riding what that category is doing down or up. You know, and so if you had a, you know, if you had a, I don't know, a growth fund that did 17%, and you go, well, I thought the market was hotter than that. Well, look and see if it was. Look at other growth funds, and you go, well, yeah, all the rest of them made 29% that year. Well, yours sucks, you know?

Yeah, right. You compare it within category, and then you compare the overall portfolio to the S&P during the same period of time. And that will tell you whether you picked bad funds or whether you're just riding a market cycle. And that can keep you comfortable. And that's what I would suggest. The other thing I would suggest is this. There's a high correlation between people who win with their investments and whether or not they have an investment advisor. 79% of the millionaires that we studied use an investment advisor.

Eight out of ten. And it's not because the investment advisor makes their decisions for them, but they're there as a source of information. And so, for instance, were I having exactly the same concern you're having about my funds, I would not sit down and comb through the Internet and try to freaking figure out the comparisons that I just described to you. I simply would email my SmartVestor Pro and go, dude, give me these comparisons because this is sucking and I don't like it. And he's going to send me back some stuff and go, we're okay here. This one looks a little weak compared,

and the overall portfolio might be a little weak compared to the market. We may need to reset some stuff. Or chill, it's all market-related, here's why, and you compare it to the market, and you've got somebody that does all the work for you. And they know the stuff off the top of their head, because they bathe in these numbers all day, every day. And I don't want to spend my time doing that.

I don't work on my own car either. I used to, but when I open up the hood, it's like, might as well be a computer in there, as far as I know now. Used to, you could turn a wrench on them because there was something in there to turn. But now you've got to reboot the stupid car. So I can't do this. I can't, you know, and the same thing is true here. I don't DIY my investments.

Now, I need to understand, but I don't DIY. So two things. One is do those comparisons we talked about. If you want to DIY it, that's how you would do it. Or if you want to use the same set of information and sit with a SmartVestor Pro, they can run the scenarios out for you, and you can tell where you are and if you need to move out of a fund, a particular fund or something like that. So good question.

Interesting discussion. Thank you for calling in. Open phones at 888-825-5225. Dave, my company does not offer vision or dental insurances. Good. I have four kids, and I really believe I need these insurances. No. Can you tell me if it's worth it?

It's not. Don't take out dental and vision insurance. They cost you more than you benefit big time in a given year. I don't offer it here. I don't buy it, and I don't even let our team buy it through our thing. Now, we do have Dental One, which is a discount program that we advertise for, and you ought to check those guys out. They're pretty incredible.

But, you know know there's very very few of those things listen if they if the typical person uses their eyeglasses or contacts insurance or their dental insurance more than it costs then that company goes out of business and that's a very easy calculation to add up what you're spending on it versus what you would benefit in a given year. And every time, your head tilts like a German shepherd and you go, Oh, no! I'm not doing that. This is the Dave Ramsey Show. Thank you. In the lobby of Ramsey Solutions, Matthew and Candy are with us.

Hey, guys. How are you? How are you, sir? Good. Better than I deserve. Welcome. Where do you guys live? We are in Calhoun, Louisiana.

Fun. Welcome to Nashville. And all the way here to do a debt-free scream? Absolutely. Love it. How much have you paid off? $151,000. I love it. How long did this take? 23 months. Wow. And your range of income during that time? $125,000 to $216,000. Wow. What kind of debt was this? Most of it was student loans. The last thing that we paid off was our car. All right. And what do you guys do for a living? I'm a deputy sheriff at the sheriff's office and i'm a psychologist okay so what caused your income

to almost double in two years i graduated school oh and we uh we worked a lot he worked seven days a week uh a lot of overtime and you took a job. Yeah. Okay. You weren't working before. I was, but I only had a master's. Your income shot up. Yeah. Okay. Cool. Very good, guys, because you're making good money. So what happened?

Did you graduate 23 months ago? Or no, you weren't out when you started this. So what started this whole idea, this debt-free journey? Well, we started a little bit before this. We got a book from a friend of ours, and that kind of got us on track. But at the end of 2016, we realized we paid like $20,000 in student loans, towards our student loans. And we're like, oh, yeah, man, we're killing it.

We're doing a great job. And then we actually looked, and we only had about a $4,000 reduction in our principal. Boom! And that'll make you mad, Dave. Yeah. Yeah, we thought we were gazelle intense and realized we'd just been kind of doing the ish thing. And we were so mad and on fire that looking at the numbers, we looked at them last week, and it made us mad all over again. Wow.

Wow. So you had started messing with it, but you weren't getting traction, and the lack of traction disgusted you. Absolutely. Absolutely. Okay. Yeah. We looked at it and said, you know, we can't live like this in the future if we're going to change the family tree for these guys. I love it.

Very cool. Very cool. And it all started with a Total Money Makeover book, huh? It did. Yes. Somebody gave us the book, and I started watching some of your videos on YouTube because I thought, okay, this Dave Ramsey guy, he's probably kind of, eh. And then I realized, me and you, Dave, we have something in common. We're very fluent in English and sarcasm.

It's my second language. Absolutely. So we're both bilingual there. And that's how we really got the connection. Okay. I thought he was nuts. I thought he was crazy. But my dad had actually told me about you several years before,

and it just didn't click until we were really in this that that's what he was talking about it, that it was you in this book. Okay. So Matthew got got all fired up and you thought he was a little crazy what what made you decide he wasn't crazy um well he he read the book before me and so he just sounded nuts but then i read the book and realized it it sounded doable it sounded like something we could do so yeah it goes from crazy to doable when you can see yourself doing it. Yeah. Absolutely. Yeah.

And as a psychologist, I mean, you get that. You see, you work with people all the time trying to show them what's possible. Yeah. You know, when you change a behavior, you change a result. Mm-hmm. You know, it's a pretty simple formula, but conceptually, but doing it with a human animal is interesting. Absolutely.

Well done, you guys. Well, and you see it in law enforcement, even. I mean, it's the same thing. It's stuck on stupid, you know. Absolutely. You know, as you say, the number one cause of divorce is money fights and money problems. And, you know, we work a lot of those family fights. And they're over money.

And it hurts to see that. And, you know, I don't want that for these guys here. Yeah, you walk into some domestic situations, I'm sure, that are are money related absolutely yeah and they're dangerous from what i hear yeah okay wow well well done you guys so what do you tell people the key to getting out of debt is you did it you paid off a hundred and fifty one thousand dollars yeah you've got to be super gazelle intense it uh i got my motivation from one of the promo commercials for FPU. And it's the commercial where the guy's running up the stadium. And he's like, inspire me today, Mike.

And I would repeat that in the car. And I would say that along with the video there. And it just kept me going and going. And you've got to be super gazelle intense. And then, you know, we have to communicate and keep the budget stay on top of that yeah yeah so the intensity with the communication with the budget that makes the that makes the gumbo work you bet yeah it cooks it up very good way to go guys congratulations who was your biggest cheerleader outside of your family uh outside of the family uh I got a lot of support from people at work.

They were really interested. But I think within the family, her dad really, really kept us going. And he would let us know if we were being too gazelle intense, you know. You know, you've got to eat a little more than beans and rice, you know, eight days a week. So, but he was a great motivator, and he really helped us see the end. And he was the one that told you about years ago. He was. But it didn't take the first time.

That's right. He would come through and tell us as I was going through school and we were struggling and not sure we were going to be able to do it. And he'd say, you've already knocked it out of the park. You just can't see it yet. Ooh. Ooh, good line. Yeah, it was powerful, and it really stuck for us.

Yeah. Well done, guys. Well done. Congratulations. Congratulations. We're proud of you. So that was, yeah, it was powerful and it really stuck for us. Yeah. Well done, guys. Well done. Congratulations. We're proud of you. Thank you, sir. Good stuff.

Very good stuff. So we've got a copy of Chris Hogan's book for you, Everyday Millionaires, because you're going to be some before we know it. You're well on your way. You're making really good money. You've got no payments now. And now you're baby step four, five, six in it, and life is going. And it looks like we've got a couple of kiddos here to buy school for.

What are their ages and names? This is Cameron. She's eight. This is Connor. He's 12. He just turned 12. Cool. So have they been involved in all of this stuff?

Absolutely. Connor can actually quote the start to your show. He was doing it out here earlier. All right. That's cool. I think, was it last week? actually quote the start to your to your show he was doing it out here earlier all right that's cool i think was it last week i think he did a um he had to do some sort of biography on somebody who'd experienced failure and so he chose to do you and he did that as part of it as he started the the beginning of his show so it's somebody that overcome wow very cool well i'm honored sir thank you that's very neat. Very neat. So they definitely know the debt-free scream now.

Oh, yeah, yeah, yeah. They've been practicing. We're good. Matthew, Candy, Connor, and Cameron, $151,000 paid off in 23 months, making $125,000 to $216,000. Count it down. Let's hear a debt-free scream. All right, three, two, one. We're debt-free!

Yeah! Yeah! That's how you do it. Oh, man, that's fabulous. That's as good as it gets right there. Well done. Our question of the day comes from Blinds.com with their 100% satisfaction guarantee. It means even if you mismeasure, you pick the wrong color,

they will remake your window blinds for free. You get free samples, free shipping, new promos every month. Use the promo code RAMSEY. Alicia's in Texas. We paid off our credit cards, saved $12,000 for our emergency fund. The only debt we have is $12,000 for our emergency fund. The only debt we have is $55,000 on our mortgage. I'm having a hard time not leaping into paying off the mortgage. With our current income and budget, I can have the house paid off by June of 2020.

Pay off being so close, it feels wrong to delay that. Is it right to prolong the mortgage in order to invest more? When you can do it in a year like you're talking about or 14 months like you're talking about, that's fine. That's kind of like somebody saving up their down payment for 14 months before they start investing. And if you want to go ahead and knock out your house and you can do that in 14 months, yeah, I'd probably do that. Definitely would.

What I don't want people doing is getting so fired up about getting out of debt. And I do want you fired up about getting out of debt. And I do want you fired up about getting out of debt. But I don't want you so fired up that you don't do any investing for 10 years because you're trying to pay off your house early. No, that's when we do our baby steps four, five, six at the same time, 15% of your income going into retirement, start the kid's college, everything else goes on the house. The house usually pays off in about seven to 10 years doing that anyway but in your case you can do it in 14 months yeah yeah let's go ahead and do that

and be done with it then you're just baby step seven which is you're loading up all your retirement maxing everything out keeping the government's hands off of everything much as you can put in the 401k much as you can put in the roth iras because you don't have a house payment anymore and that's going to be a really, really cool place to be. So, yeah, you're a baby step seven then, which means that you're there is no baby step four. So you're not limited to 14 percent of your income going into retirement. No, you would max out, put all you can put in everything, you know, Roth IRAs, 401ks, whatever you've got available to you. And that's going to speed up how fast you get wealthy.

And you'll still have plenty of wiggle room in your budget because you don't have a house payment. That's the beauty part about seven is let's just build wealth and be outrageously generous. Oh, and be sure you're outrageously generous. This is the Dave Ramsey Show. Our Scripture of the Day, Romans 12, 18. If it is possible, as far as it depends on you, live at peace. Our scripture of the day, Romans 12, 18. If it is possible, as far as it depends on you, live at peace with everyone. Harry Selfridge said, the boss says go, the leader says let's go. Allison is in Springfield, Illinois.

Hi, Allison. Welcome to the Dave Ramsey Show. Thank you. So glad to be here. I appreciate it. Awesome. Good to have you. How can I help?

My question is, in the beginning, my husband and I have always agreed that divorce is not an option. And I wish that we would have said that debt was never an option, but we never started off on that foot. We've been working really hard over the last recent few years here to be gazelle intense, making that our new motto in our relationship and our family, thanks to you all and your entire team. So I've recently launched an agency which has become successful very quickly. I wasn't ready emotionally maybe for that. So I got a little apprehensive. That's not an option. Our business is, well, my business is debt-free, and we want to keep it that way. My questions are about saving and making sure that we're on the right track,

like about how much, if it coincides with the personal baby steps, and if we start investing at all with the business. I feel like I should know this, if you could bear with me. No, that's okay. Here's the thing. How much are you making now in the business? Currently five a month, but it could easily increase to 10 or more, and that's where I'm nervous. What does your husband make?

I believe 55. You believe? Yeah, it went up recently, so I can't remember. Oh, 65,000. 65,000. So your household income now is about 120, 130. Okay. All right,000. $65,000. So your household income now is about $120,000, $130,000. Okay. All right, good.

And the $5,000 a month is net profit or gross? Gross, unfortunately. Okay, and so what are you netting on $5,000? If it only remains at one client a month, which I don't believe it will, but I'm being very conservative. On $5,000, what do you net? $500. That's just to make sure that I'm saving.

That's after I've saved. No, no, that's not, honey, savings is not an item. It's not an expense, okay? When you run a business, you have your gross revenue minus your expenses of operating the business. Okay. Gives you net profit. What is your net profit on $5,000? If I were to take out what I owe every month on the business, it would be about four.

What do you owe on the business? What do I owe? You said when I take out what I owe on the business? What do I owe? You said when I take out what I owe on the business, you mean expenses? Expenses, yes, monthly expenses I have. Okay, so you have how much in expenses a month on a $5,000 income? $1,000. Okay, so you're net $4,000, net profit. Right, and then I assumed I would take out 50% for taxes, leaving me with two.

Yeah, that's different than profit. Okay, I'm dealing with just profit right now. Right now we have a $4,000 profit. And then you'd like to save some money, and when you bring your profit home, you need to set aside a fourth of it for, at this stage of the game, about a fourth of it for your taxes. That's if you were going to bring it all home. And basically that's all profits. So, yeah, you need to set aside about $1,000 out of $4,000 for that.

The other thing then, what are you having to spend on the business? Why do you need money to grow the business? You said investing. I didn't know if you can have your business do investing, if that is even a thing. No. I'm just trying to navigate. No, I would not. What I would do is reinvest back into the business, meaning you might want to set some money aside in the business to grow the business itself, but I wouldn't use the business to do outside investing.

And so if you said a percentage of your net profits, you could set aside for what we call retained earnings, which is savings in business. And the savings would be used for emergencies in the business and for growing the business. Okay. And in your situation, I would not recommend more than about 15 or 20 percent, because you've grown this with no savings. Mm-hmm. And it's already growing.

Yes. Okay. So if you want to set aside 15 to 20 percent of your net profit for retained earnings out of your formula, that's you take your income minus the actual expenses times 15% or 20%, whatever you want to do. Make up a number. I don't care. It could be 10%.

I don't care. Something like that where you've got some little bit of business savings account building up to cover bumps in the road and to cover new investments inside the business. Then when you take money out of the business and bring it home, you need to set aside one-fourth of that in a separate savings account just for taxes, and you're supposed to be doing quarterly estimates on your taxes filing with the IRS once a quarter. Oh, I see.

Okay. So, oh, once a quarter. Okay. Yes. See, I did not do that. Yes. It came upon me this year already. I do have a business savings for the site, so I would just put the savings for the taxes inside of there.

I would keep it separate from the business savings. I'd have just a little separate savings account just for taxes, just so you don't accidentally use your tax money to do something inside the business. Exactly. I'm treating this like a newborn baby. Like you're withholding on yourself. Yeah, you're withholding on yourself is what you're doing. I have not paid myself either.

Well, and what we're going to do is when you take that money home is when you set aside a fourth of it. As long as you leave the money in the checking account, you're not going to be taxed on it until year end. Okay? Oh. But, you know, you can sit down with cpa it won't take but a few minutes to work out how to do these quarterly estimates and that's what you need to do um and

but then you know in your case i think i'm bringing most of this money home the profits and pay your expenses set aside your taxes set aside a little bit for retained earnings and i'd bring the rest of it home and it doesn't have to be a set salary, but it can just be the balance comes home after taxes, and we're going to use that to pay household bills and get out of debt and keep moving. And, you know, it's part of our income. And if your income shoots way up, then you're going to get out of debt and, you know, bring it on home and build wealth with it. I bring it on home.

That's what I do. And I don't even do giving out of our company. We do a tiny, tiny, tiny little bit of giving out of our company. 99% of the Ramsey Family Giving goes to the Ramsey Family Foundation that is funded by my personal account, meaning I took the profits out of the business home, and some of that i allocated in addition to my tithe as a christian i allocate over into a fan into a family foundation and we do all of our giving there and so i cannot say i gave at the office because i almost never do i mean like literally less than one percent occasionally we do a tiny little thing out of

the office but it's more of a pr thing than it is a generosity thing it's more just working with a client somewhere and we'll do a little bit of that but it's it's less than one fourth of one percent of our revenues and so almost all of our big time generosity all of our generosity period happens at home and home lately has been called the ramsey family foundation and so we just allocate that so you just keep all this stuff real square and real separated emotionally and it keeps it clean and that way you you you feel permission to use your own money to do the right things with it to pay your taxes to have money set aside for the business, to bring it home, to prosper at home. All of those things start to happen.

And you certainly, you've already got separate accounts. That's one of the first steps for a small business startup. You've got to have separate accounts for everything. And then treat your business like it's someone else's. And you're not going to embezzle out of it. You don't buy groceries out of the business account. You don't do other stuff out of the business account. That would be embezzlement. If you did that with somebody else's company, they'd put you in jail, be stealing.

You don't buy groceries with that money. It comes home, you take a fourth out for taxes, you take the percentage out for your retained earnings, and then it comes home. And when it gets home, then we buy groceries out of the home account. And you've got to keep everything real clean. And that helps then as the business grows with the emotional parts of it. So, good question. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host.

We'll be back with you before you know it. In the meantime, remember, there is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at daveramsey.com slash show.