The Ramsey Show - App - Are You One Small Emergency Away From Losing Everything? (Hour 1)

Episode Date: November 20, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in. We'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Chris is with us in Wichita, Kansas, starting off this hour. Hi, Chris. How are you? Hi, Dave. Thanks for taking my call.

Sure. How can I help? My question is, in saving for a comfortable retirement, do you have a certain formula you should use as to how much you can withdraw out of your retirement savings as a percentage-wise to never run out of money? And, you know, what is your formula for setting up a comfortable retirement. Well, you need to be able to live on less than 8% of your nest egg if your nest egg is making 12. Okay? Now, I don't know what your nest egg will be invested in or what you're doing.

Mine is invested in real estate and in good growth stock mutual funds. So the vast majority of my net worth makes me in excess of 12% a year. So in my case, I'm making 12% a year. Now, probably more like 14%. Basically, everything's invested in 10 different mutual funds. And I had heard the formula was 3.5%. You could withdraw 3.5%. Here's the thing, okay?

If you're making 12 and you pull off 8, you left 4 in there, didn't you? Right. Okay? You're never going to touch the nest egg in that case, on average. Some years you might dip into it. You might have a negative year. Other years you might have a negative year other years you might have a positive year but on average over 20 years if you make 12 and pull off eight your nest egg is not only not going to get destroyed

it's going to grow by four percent a year agreed yep that sounds good if that's true now i mean what you've got to do is manage it hands-on and watch what you're doing so that you don't consistently withdraw more than it is growing. As long as you don't withdraw more than it is growing. But the 3.5% is completely bogus unless you're so stupid that you've got your money invested in 2% CDs or something, which would be ridiculous. Right. Okay? Right. But as long as you're making more than you're taking out, you're okay.

And the formula I came up with is, it's just, and it's very primitive. There's nothing, no rocket science to this, really. Because inflation has run for the last 75 years about 4.2% average. Okay? Right. And so if I let my money grow by 4% a year, I get a cost of living raise every year. And so that's where I say, whatever it's making, I pull off four less than that. Okay.

And it'll always grow, you know, at a rate of inflation. Because if your nest egg is 4% bigger next year, it'll produce 4% more money, correct? Okay. And so you're staying with inflation, and that's the whole idea. And you can play with that. I mean, you can run that more conservative. You can run it more aggressive. You can do whatever.

The truth is, it depends on the size of your nest egg as to how vital this becomes. If the size of your nest egg is $500,000, you've got to be very careful. If the size of your nest egg is $15 million, you've got a lot of wiggle room in this. Oh, sure. Yep. So it just depends on where you land in that, too. But if you're trying to retire on $500,000 and that $40,000 a year is 8%, you've got to manage that puppy down to the nub. You've got to watch what you're doing exactly there.

The big thing is don't pull off more than it's growing, whatever you've got it invested in. And I like to pull off 4 off more than it's growing, whatever you've got it invested in. And I like to pull off 4% less than it's growing. And that keeps me breaking even with inflation. If you pulled off 5% less or 8% less, I don't care. Live on 4%. You can live on 3.5% if you want to, if it's making 12%. But the thing's going to continue to grow pretty aggressively.

And again, you might not need all of that. So you might just let it ride. Like, I don't need mine. I'm working now. So my net worth is continuing to grow by the entire amount because I'm not touching it. I'm earning an income still. I'm not living off the investments. So they're all just snowballing in the right direction. So there's so much to where you are in particular as to how that works.

But the big deal is don't pull off, build a nest egg big enough that you can live off of what it earns plus or minus 4%. You know, that's the thing. All right. Jeanette is with us in St. Petersburg, Florida. Hi, Jeanette. How are you? I'm good, and you?

Better than I deserve. What's up? I have a question. I have alimony that is ending in two more years, at the end of 2021, I believe, and I have been actually using my alimony to pay my expenses, so I needed advice on that. I don't owe anything on charge cards anymore. Good. I paid it all off. So how much, what's your income?

I'm not counting alimony. My income as a public school teacher is $42,000. Okay. Can you not live on that? On $42,000, I bought a house. I have a mortgage, of course. And I have a rented car. I, and I have a rented car. I'm sorry, not a rented car, a leased car.

And I don't want to be upside down, so I am concerned about what to do. Okay. So when I asked you the question about whether you could live on $42,000, what you answered me with was all your debts. And so it sounds like you need to clean up your debt, right? Yes, yes. How old are you? I'm 53.

Perfect. 53. Okay. And what's this car worth? The car is worth $25,000, and I owe $26,000. You need to sell this car. Well, it's a lease. I don't care. You need to sell the car.

Okay. Okay. You have a car you can't afford. You can't afford to drive a $25,000 car when you make $42,000 a year. The math on that doesn't work. It doesn't pass the fourth grade math smell test. All right. So it's in the insane column.

You've got to get a car that's $5,000 or $6,000 or $7,000, and you pay cash for it when you make $42,000 a year. And that's, you know, until you get your income up, you can't afford to drive a car that's that expensive, even if it was paid for. And how much is your house payment? $1,100 and change. And what's your take-home pay from teaching? $1,800 every two weeks.

Okay, so $3,600. So one-third of your take-home pay is your house payment. That's a little rich. It's not enough to force you to sell it, but it's enough to say I need to do some things to get my income up other than alimony. You've been riding this alimony as a crutch, and you looked up and saw it's going to end, and it scared you, and it's going to scare you straight, which is good.

So you chop up the credit cards. Let's get the car sold. Let's get out of debt. Because if you don't have any payments but a house payment, you can make it on your teacher's salary, and you can prosper on your teacher's salary, and you can work towards getting your income up. Hold on, I'm going to send you a copy of the book, The Total Money Makeover. You desperately need to read every page of that and do exactly what it says.

This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and a struggle to make ends meet, but they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen. Their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement.

That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Welcome back to the Dave Ramsey Show. Joining me this segment with a big announcement. Ramsey personality Anthony O'Neill is with us. A few months ago, he was on the show, and we teased a brand new event that he's going to announce today.

And I'm going to let you do the announcement. Talk about it. This is so fun. I love this. Man, I'm so excited, Dave. Like you said, last month we teased this new event with Dr. Matt Meeker and myself, and it's called the Smart Parent Event. And today we're announcing it. We're going to be hitting Minneapolis on May 14th and Sacramento on May 21st next spring.

Back-to-back weeks. Back-to-back weeks. And what I love about this, Dave, is the truth was I wasn't raised by perfect parents. I was raised by parents. You weren't! You know, I wasn't. i don't believe that there is i thought they were perfect you were the one that was a goof up they have all really bad you know but i have parents who have a perfect heart you know and who loves me

and who wanted the best for me um and as i've been traveling around the country talking to teenagers and really hearing their heart and really meeting parents. And one thing I'm hearing is that parents are feeling overwhelmed. They're feeling unsuccessful. They're feeling like just plain short of hope. And so we I was like, yo, I don't like this. Sit down with you. Sit down with the team.

And we say, you know what? Let's let's attack this. Because if I my heart, Dave, you know, this is for teenagers and for millennials. And the best way to help them is to strengthen and encourage their parents and so the team and I say you know let's sit down let's talk about this event and how can we help the teens by inspiring their parents and this is what this night is going to be about it's really going to be about understanding I'm going to come from the perspective of really understanding your kid and letting you know like hey you're not perfect but you are closer than what you think

and you are doing a great job and just partner along with us and we're going to inspire you and dr meg she's been in this industry for years and her wealth of knowledge combined with my young energy and and she's dealing with the parents i I'm dealing with the kids, they're going to walk away with a game plan on how to be a smarter parent, not a perfect parent. There you go. Smart parent event. Yes, sir. And it's rich in content because, of course, Meg Meeker,

10 best-selling books, but Strong Fathers, Strong Daughters, I guess her biggest book, number one bestseller, and that's how i got introduced to her was through that material she's a regular part of our um speaking staff in a sense when we do uh what do we call them i don't know our our alumni or whatever we call them at smart conference that come in and uh always gets a standing ovation when she does parenting and you and her doing a back-to-back at smart conference last year you talking about uh what your teen needs because you've talked to thousands upon thousands of teens you're speaking several hundred times a year in high schools and colleges you really have your finger on the pulse of today's teenage and young and pre-teen generation and what they're thinking and so we put that combined with meg's richness of decades of being a pediatrician

and what she's seen and learned about parents and parenting and what the kids actually need and what they don't need. This is going to be a home run event. I'm so excited about it. I'm really pumped about it too, Dave, because I think for me it's, you know, this year alone, me and you were talking about this on Saturday, I've been in a little over 200 high schools this year alone. And to really just get in there and really learn and see these kids,

you know, social media is raising them. Their peers are raising them. TV, music is inspiring them. I really want to take all this information and not go to their parents and tell on them, but go over to the parents and say, hey, listen, this is what they're experiencing. This is what they're hearing. This is what they're hearing. This is what's inspiring them. This is how you should be able to understand what they're saying and why they're doing

this. And I just really can't wait for that because when parents can really grasp that and understand where their child is and what they're experiencing, then they can be a smarter parent and it really helped their kids become the light of the world, become and brighten up their future. So, well, I mean, the smartphone and the Internet, of course, are a blessing. Yeah. But when you are 16, it's a chance to screw up your life beyond belief.

Yes. And I mean, you can leave a digital tattoo right there for the rest of your life called stupid yes and um man i'm just thankful that wasn't around when i was there because i'm if i if people could pull up stuff i did back then you know but but you know it's a different world and so it requires a different set of parenting strategies it really does save and you and i both i'm so thankful i didn't have a social media back in the days because my parents are here today and I'll probably get in trouble when I go home tonight from some of the stuff in the past. But I'm just I'm excited, Dave. This is going to be fresh content, brand new stuff. And I'm just pumped that we're going to be taking this across the world.

Now we're launching two in the spring. We have some more coming in fall, but I'm just excited. Minneapolis, May 14th. Sacramento, May 21st. Parents, if you're feeling a little overwhelmed, it doesn't matter the age of kids. It's not just for teenage parents. It's for if you have children at home.

If you have children, what, 20 and under, you know, that kind of thing, then here's the deal. You need to be at this if you're in the Sacramento or Minneapolis area. It's absolutely a night for you we're going to debunk the myth of perfect parenting but let you know that something that is attainable smart parenting and that's what this event is called here's the deal the first 100 seats starting right this second at each city are 19 dollars wow that's what you call fast start yes and then they're going to go up and then they're going to go up again yeah and then they're going Are $19. Wow. That's what you call a fast start. Yes, sir.

And then they're going to go up. And then they're going to go up again. Yeah. And then they're going to go up again. Yeah. And so the faster you buy them, the cheaper they're going to be. Yeah. That simple.

Go to DaveRamsey.com slash events or call customer care at 888-22-PEACE, 888-227-3223. And you can get your tickets. Again, Minneapolis, May 14th. Sacramento, May the 21st. A brand new event with Anthony O'Neill and Dr. Meg Meeker. It is called Smart Parenting. And you don't want to miss this Smart Parent launch. The $19 tickets, first $100 or $19 at each of these.

DaveRamsey.com slash events or 888-22-PIECE, 888-227-3223. When you were presenting the other day the last event we did, the last SMART conference we did, I remember watching you lay out a whole series of things that teens really need to hear yeah talk about one of those i mean you put a whole list of them together for folks that day we don't have time to do the whole one hour talk but one of those that just every time you're in a high school you think of that um the key thing that i think dave is probably the first one i talk about is really understanding where they are. Respect what they're going through.

Their issues that they're experiencing right now is real to them. You know, being 34 years old now and my parents are older, I just really want parents to understand like, hey, what this kid is experiencing at 15. For an example, I remember breaking up with my first girlfriend at 14 and my parents didn't even know about it. I just told him myself it was I remember that was hard for me because that was then. But then my parents were like, oh, that's nothing. You'll get over it and they'll just wash over it. Well, what we're noticing today with teenagers is what they're experiencing today at 14 and

15 is real and relevant to where they are to them right now and sometimes parents we can brush that over and say are you going to get over it because we're so much older than them and they'll feel as if my parents doesn't they don't understand me they're they don't love me when parents do love them but parents like but you're going to get over it you're not going to remember this kid when you get older or what you're going through right now it's not going to be serious in the next year or two but i really want parents to understand you may not have to agree you may know this is going to be something that they're going to get past but just love them and just make them feel as if you understand where they currently are that way if they feel that way you

can guide them out of it a lot quicker. Meet them where they are. Don't drive by. Exactly, Dave. I like that. I'm going to say that on stage. That's good. It's really good.

Very well done. And then another one, Dave, I'll put this out there. We don't have much time, but never let someone celebrate your kid more than yourself. Oh. Never let someone. Never. There we go. Affirmation is a big deal when you're an insecure teen. in yourself. Oh. Never let someone. Never. There we go. Yeah.

Affirmation is a big deal when you're an insecure teen. Instagram should not celebrate your kid more than you celebrate your kid. Yeah. If they do, they're going to get sucked into something that's not a good thing. Yes, sir. Smart Parenting Events, May 14th in Minneapolis, Sacramento, May 21st. Happy Thanksgiving, Anthony O'Neill. Well done.

Thank you, Dave. This is the Dave Ramsey Show. Why in the world would you trust some random guy in a cube when getting your mortgage? Do you really think he cares about your long-term money goals? Well, he doesn't. Those companies care about getting you into whatever home loan program they're pushing that week. When it comes to ordering a cheeseburger, the meal deal works fine. But let's get real, people. We're talking about the largest investment you'll probably ever make.

So don't be naive and trust an order taker who pressures you into a prepackaged loan. My friends at Churchill Mortgage have been helping my listeners for over 25 years. Call Churchill Mortgage and get custom solutions from an expert within 10 minutes. It's simple. They'll shoot straight with you and quickly show you the real way to save money. Call 888-LOAN-200. That's 888-LOAN-200. Or visit ChurchillMortgage.com.

This is a paid advertisement. NMLS ID 1591. NMLSconsumerAccess.org. Equal housing lender. 761 Old Hickory Boulevard. Redwood, Tennessee 37027. In the lobby of Ramsey Solutions, Angel is with us. Hey, Angel, how are you?

Hi, Dave. I'm doing great. How are you? Better than I deserve. Welcome. Where do you live? In Colorado City, Colorado. Oh, cool.

Welcome to Nashville. Thank you. All the way down here to do your debt-free screen. Yes, yes. How much have you paid off? $40,000 in two years. Good for you. And your range of income during that two years?

About $65,000 to $80,000 with lots of overtime. Got it. What do you do for a living? I'm a registered nurse at St. Mary Corwin. Lots of places to make money then. Yes. And lots of ways to make extra money. You work all the time if you want to.

All the time. Yeah, and you did. So what kind of debt was the $40,000? I had three credit cards, one personal loan, one overdraft loan, and a car. And a partridge in a pear tree. And a partridge in a pear tree. And a partridge in a pear tree, absolutely. You had all kinds of debt.

I didn't meet it. There was no debt that I didn't like. So you're bebopping along, just kind of a normal person, a little debt here, a little debt there, and it's no fun making $65,000, $70,000 a year, working your butt off, have nothing but payments. What happened two years ago? I got sick of being broke. I was married for about 10 years, and the one thing that my ex and I did well together was get into debt. It was a skill.

It was a skill we had. We were very good at that together. One of our couple skills. Yes, absolutely. And so I've been divorced for about five years, but about two and a half years into that, I just was very overwhelmed. And I realized that I was one small emergency away from losing everything. And I made too much money for that. So what did you do?

Well, I had to kind of, it was, I did this in steps. So I actually did most of this in 18 months. One night before, actually one morning before going to work, I just felt very heavy and I just knew that I couldn't do this anymore. So I actually came home that night and I gave the boys my credit cards and they cut them up for me. But I wasn't completely committed to the program and I went out and bought a car a couple months later. And I debated whether or not to tell you that, but did but i really truly wasn't committed to the program completely um and so when i went out and bought the car i got in a lot of

trouble from these guys so your son your teenage sons are holding you accountable yes because i had talked about the cars mom but then you buy a car exactly and so they knew that it was going to be more no's for longer yeah and um and so after that i realized that i had told them that i was going to do this and i needed to do it because they were watching and i wanted them to know that you know if you said you're going to do something you know follow through with it and that you can do this anybody can do it amen so um so how did you get connected with us in this process? Well, my parents had actually done your program years ago and so my ex-husband

and I had actually, well, I kind of forced it on him. He didn't really want much to do with that, but so I knew about your program and I'd actually had your book for many years, so I kind of dusted it off and started looking at that again. So the information was all around you just laying there but you just had to get your heart right to pick it up yeah you

do and i think you know what happened is i realized that i had to take accountability that maybe you can blame something on your ex-husband or whoever um while you're married but you can't do that when you're single anymore. So I realized this is what I said was important to me, but I wasn't doing it. And so I decided that I'm going to do it. I say it's important, and we're going to do it. Because I don't want to feel like this. I don't want to be broke, and I make good money.

There's no reason for it. Time to get after it. Time to get after it. So what do you tell people the key to getting out of debt is? That you, first off, you have to take accountability for your own life. Time to get after it. So what do you tell people the key to getting out of debt is? First off, you have to take accountability for your own life. You can blame people all day, but in the end, it really boils down to you and what's important to you and whether or not you're going to be committed to doing that and disciplined. The second thing I would say is you have to believe that you can do it. And I knew that I could.

I know that I can do whatever I set my mind to. And the third thing is just to write your goals down. Once I actually wrote down what my goals were and what I wanted to pay them off by, then I really got after it. So those are the three. There's no real secrets. Just like you say. Execute.

Just execute. It's just doing it. And don't buy a new car in the middle of it. And don't buy a new. It wasn't brand new. It was used. So you had teenage sons that were cheering you on. Who outside the house was your biggest cheerleader? I would say the girls at work.

There's a lot of nurses at work that know who you are, and they have done your program. And they're very quiet about it. But once I really started talking about it, everybody in the hospital knew about you. And they're probably as sick of hearing about you as my kids are. But yeah. So yeah, I'd say the girls at work primarily. And my family was great. Yeah. That's very good. Yeah. Very good. And so you got the two boys with you. What are their names and ages? So Dylan is 13. Caleb is 14.

And my oldest son is almost 22, and he's serving in Afghanistan. Oh, wow. And so I have my remember everyone deployed shirt on. Yeah. Very cool. Absolutely. Yeah. Well, tell him thanks for his service.

I will. I appreciate it. Thank you. Yeah. Very cool. Makes you a proud mom. Oh, absolutely. All three of them. I appreciate it. Very cool. Makes you a proud mom. Oh, absolutely. All three of them.

Absolutely. Very cool. Well, we've got a copy of Chris Hogan's book for you, Retire Inspired. Go ahead. Can I tell you one other thing? Sure. So I did coordinate two FPU programs. I was a coordinator for both of them while I was still in debt.

But I have to tell you that one of the reasons that you always say it's so important to pay this debt off is that, you know, when you're making monthly payments, it's fine when everything's going well, when you have a job and everything's going well. But what happened is a month before I was due to get everything paid off, I found out that our hospital was majorly downsizing. And one of my, my position was being eliminated. And I have to tell you that i did not panic because i was a month away from paying off everything and everybody else was you know there's

a lot of people that were very nervous because they have a lot of debt so um it really truly does give you that peace of mind and so it was okay yeah and it's been okay so what happened you changed i actually know i still work for the same hospital i just transitioned into um another um one of the on the orthopedic unit so okay yeah it worked out just fine but i would have been much more scared and i wasn't scared yeah it's amazing i mean you have a pile of money instead of a pile of debt it takes away a lot of the fear it does yeah thank you for everything you do yeah well you did it i'm proud of you yeah thank you we're very proud of you. Yeah, thank you. We're very proud of you here.

Congratulations. Thank you. And I know your young men are proud of you. Yes, I hope so. They'll be talking about their mom, the hero, for the rest of their life. Yeah. The single mom that raised them, and she's the one that did it. Very cool.

Good job. All right, it's Angel, Caleb, and Dylan, and Anthony yelling from Afghanistan. We'll hear him, I'm sure. $40,000 paid off in two years, making $65,000 to $80,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Woo-hoo!

Yeah! Yeah! Single moms can't do your stuff, Dave Ramsey. I don't know. They do it every day. I don't know why being a single mom affects it. It's just math. I know it's a lot of work.

I know it's scary. I know it's hard. But so is being broke. You can do it if you make $65. You can get out of debt. You can get out of debt if you make $165. You can get out of debt if you make $65,000. You can get out of debt. You can get out of debt if you make $165,000. You can get out of debt if you make $35,000. I don't know how much debt you got.

I don't know how long it's going to take you, but most people increase their income because they increase the hours they work doing something while they get out of debt. They decrease their spending. I mean, you've got to quit spending like you're in Congress, you know. You've really got to get your hands on what's going on in your life. And when you do that, man, it changes everything. You live like no one else. You put yourself in a position that you can live and give like no one else. The Bible says no discipline seems pleasant at the time, but it yields

a harvest of righteousness. Everyone that wins pays a price to win. I don't know what you're winning at, but you paid a price to get there. Everyone that wins pays a price to win. I don't care if it's a sporting event. I don't care if it's your marriage, raising kids. You're going to pay a price to win. I don't care if it's a sporting event. I don't care if it's your marriage, raising kids. You're going to pay a price. You're going to give up something to get something.

You're going to give up something to get something. You might as well do it intentionally. And you might as well do it on a track that causes you to win. It's really not that hard intellectually to grasp this. The problem is actually living it out. That's what's hard. But people do it every day. That's why we have them on here.

Remind you, for the debt-free scream. This is the Dave Ramsey Show. We'll see you next time. Thank you. Juan is with us in Canada. Hi, Juan. How are you? Good. How are you, Mr. Anderson? Better than I deserve. What's up?

So I started listening to you about one month ago. I had my emergency fund and everything, and now I'm trying to save for college. I am currently 19 years old. I live at home. And basically what my question is right now is, would it be better for me to pay year by year in cash for school? Or would it be better if I put it in a mutual fund for the four years, get the OSAP, which has no interest while I'm in the four years, and then right when I'm done school,

pay everything that I have in the mutual funds towards school? I would pay cash for school. I would not play with borrowed money. You're going to get yourself in trouble. Because nothing ever turns out like you think it's going to turn out. And then you'll end up with that debt hanging over your head if you're not perfect with it. And nothing is ever perfect. So just pay cash as you go.

Tabitha is in Charlotte, North Carolina. Hi, Tabitha. How are you? Hi, I'm good, Dave. Good. How can I help? Okay, so we just have been listening to you nonstop on YouTube. My husband and I found you, and basically I hear your name more than I hear my name

around the house. So we are trying to get some of our debt taken care of. About a year ago, my husband lost his job and is making a lot less money, and we've just kind of been fumbling and struggling through the last year. What did he used to make? He used to make $70,000. What does he make now? He makes around $41,600, so a pretty big profit. Why did he take such a pay cut? Well, they let him go at his other job, and so he went into another, he restores cars, so he went into the same kind of line of work,

but just the local place that we had around here, we're kind of in a very small town, and it just didn't pay very much. So that's what, you know, it's like we can't afford to move to go someplace where, you know, he can make more money or anything like that right now, so we're just kind of trying to get through it right now. Well, for $30,000 a year, you can't afford not to move. Right. Yes.

If he can make $80,000 one place and makes $40,000 another place, it's time to be at the other place. Yes. It's an income issue. Yes, it is. And because of that, we've had to drop some bills just recently. And so that we can we were stretching ourselves out from this other job, we had a little bit of leftover, we had some a few $1,000 in the bank, and that kind of carried us through. And now we're completely out. And I, my health went downhill over the last year, I have adrenal insufficiency, so I cannot work right now. And so it's been a big struggle because now we've had to let some bills go. And that's why I'm calling you to kind of see if you can help figuring out.

So how much do you owe on your cars? We have two cars that are paid off. What are they worth? They're totaled, but they drive. They're both totaled. In Hailstorm, we used to live in Colorado, and so they're worth, my husband looked them up, $200 each. Okay, that's not the point.

So what bills have you got that you can't pay? We have our house we're paying on. It's $165,000 on the loan. And then we have $30,000 of debt, which is $20,000 of credit card type line of credit type stuff and then 10,000 of medical bills okay all right um this is an income issue isn't it it is yes and so if he's going to stay in that line of work and he cannot make $80,000 in your town, you need to be in a different town.

Yes. He won't be happy to hear that, but I'm happy. I've been saying that for a year. You can't just sit here and act like these numbers. You can't put your hands over your ears and go la-la-la-la-la-la-la and make the math change. The math is not going to change until you change it. But, I mean, if he can make 80, what I don't understand is how he was making 75 or 80 in the same field, in the same town, but now he can't. Well, he was actually traveling, well, not traveling, but commuting. And he was doing race cars. And he does car restoration, but he's done both.

And so then he's now in a smaller area, and he's just doing the restoration. And that's just what's around here. But, yes, we've been emailed that we have to. So what does he got to do to get his income up? Does he have to move? Does he have to go back to race cars and get away from restoration? Does he have to do both? What's he got to do to get his income up? I would say that we definitely need to move? Does he have to go back to race cars and get away from restoration? Does he have to do both? What's he got to do to get his income up? I would say that we

definitely need to move. We have nothing in our savings right now. And we've dropped some bills. That's not a good thing. Dropping the bills doesn't scare me. It's not dealing with the cause of the bills being dropped. It scares me. You can't just sit there and look at this and think it's going to change. You've got to do something to get your income up. And the thing is, he has the ability to make the money.

And so I don't care if he takes a temporary job going on the road with a race car team, building race cars for two years, and he's going to be gone a bunch. But it's not what he wants to do the rest of his life. I don't want to travel like that. But for two years, I've got to do he wants to do the rest of his life. I don't want to travel like that, but for two years, I've got to do that and get my house straightened up here. Or we've got to move to a town where I can just be a restoration high-end mechanic and make $80,000, which actually you could do in a metro area. I mean, is he ASE, what do you call it, certified?

No, he's not. He's just self-taught, just he's really good at what he does and so he's yeah he's been doing a lot of custom stuff it sounds like okay right and exactly and that's obviously like if you're depending on the area you know you either get really high rollers or you don't have you know much going so yeah you're gonna have to get to a market where there's guys or people that are willing to pay that to work on a car. I mean, work on a specialty car is what it amounts to. Or he's going to have to move back towards the race car side of the equation.

I don't care which one you do. But all I'm telling you is you have a math problem, and the only way to solve the math problem is with his income because you're not able to work. That's what you told me. And so this is not going to go away until you address that issue. Hey, thanks for the call. Open phones at 888-825-5225. Robbie's in Louisville, Kentucky. Hi, Robbie.

Welcome to the Dave Ramsey Show. Hey, Dave. How are you? Better than I deserve. What's up? Well, my wife and I just finished Financial Peace University at our church, and we're working through the steps, and we're on maybe step two right now and making our way through the debt snowball. We've had a bit of a car issue hit us. Our engine went out,

and so we're basically, in the past, one of the things that's really zinged us with our debt is making poor decisions um when it comes to vehicles and so we were just trying to figure out um kind of what the best route to go to handle this would be okay so you have a car that the engine's out on what do you mean out it blew up yeah um one of the i believe it's a blown gasket that went out so they basically told us it's shot. You need a new one. Well, a blown head gasket doesn't mean you have to replace the engine. Well, he said that's what he told us, and he said there was other issues.

How many miles are on the car? A little over 150,000. What kind of car? It's a 2010 Mazzda cx9 okay i i think the cheapest route is to get the head fixed get the head gasket fixed you can pull the heads and do that and uh he may not want to do that you may have to find a different mechanic that wants that doesn't want to sell you a new engine but But, I mean, I don't know that vehicle. I don't turn wrenches anymore. But a blown head gasket does not institute,

does not necessitate a complete engine replacement. Now, if you told me the engine had 300,000 miles on it, there's probably not much there. I mean, if you redid the heads, the compression might blow it. But I think you just fix the car you need a new mechanic it sounds to me like that's going to be your cheapest route to get out of this so hey you got to do it on the cheap you got to do it on the cheap because you got to fix it enough to sell it anyway um that or a used engine from a junkyard one of the two but i'm thinking just

have the heads fixed um and you may didn't need a different mechanic to do that. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer. I am Dave Ramsey, your host, and we will be back. 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.