The Ramsey Show - App - Ashley from Atlanta Paid Off $90K in 1 Year! (Hour 2)

Episode Date: April 29, 2019

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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'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.

That's 888-825-5225. Ken is with us to start off this hour in Toledo, Ohio. Hi, Ken. How are you? Dave, how are you? It sure is an honor to talk to you. You too, man. What's up?

Well, I started listening to you last May, and in June, me and my wife were all in, wanted to pay our debt off. We had $54,000 in debt, and we are now down to $13,000. Good for you. Well, thank you. And in June, we'll be debt-free. So my question for you all is I'll have my emergency fund, which is $12,000. I live an hour and a half from work work and I need to move closer to work. So I was going to save for an entire year, have about 60 more grand, plus my house is worth $200,000. We're looking at houses that are around $300,000 closer to work. I'm afraid my credit score will be zero or maybe

not zero at that time next year. Would it be smarter to move at the end of this year where I still have a high credit score, or wait until next year? I wouldn't do it because of the credit score. I'd do it because it's a freaking hour and a half. Yeah, I know. I've been doing it for a while. Yeah, I'm moving now. Are you?

As soon as you get this 13 done. But it's not around the credit score. It's just, you know, you've got your debt cleared. You know, you're not moving up much in-house. It's still going to be on a 15-year fixed rate, still going to be within a fourth of your take-home pay. And you sell your house and make your move and get your life back. An hour-and-a-half commute is no life.

Yes. The terminal that I worked at closed, and they offered a transfer, so I did. And I've been doing this commute for about eight years until the kids were out of school. And they're done, and so I'm ready to go. You're going to move the kids, man. Eight years? I know. It's been a long time.

Yeah, bless your heart, man. How many cars have you destroyed in that process? Wow. Yeah, I'm out of there. I have a seven-minute commute, so the chances of me doing an hour and a half are somewhere around zero. So I can't even relate. I'm moving yesterday if I'm in your shoes. Joshua's in Canada.

Hi, Joshua. How are you? Hello, Dave. How are you doing? Better than I deserve. What's up? Oh, my gosh. I have tried to talk to you for over a year.

It is a blessing to speak to you. Well, we'll see. Yeah, we're about to find out. But I would like to know, I'm in the process of transitioning from working as a waiter into becoming a personal trainer and a coach. The way I coach people is similar to how Tony Robbins coached people. I take a lot of my ability from him. However, I have done your book, Total Money Makeover. I'm about $9,800 in debt. And for me to transition, it would cost me an additional $300 to $500 to contract myself out

at a local gym. I already have it in place to do that. Why does it cost you money? What's the cost? So it would be the first month. So I'm renting out an office, essentially. I'd be contracting myself out because the gym that I'd be working at doesn't do hourly, so I'd be essentially starting my own career through their gym.

Oh, so you're going to pay them several hundred dollars a month to use their gym. Yeah, yeah, and then I'd have free room to be able to coach people and sort of do it my way. All right, and so you're a waiter now. What hours do you work? So I work from 5 p.m. until, or 4 to 5 until about 9 to 11 at night. Why don't you go ahead and get your whole bunch of morning clients now? Yeah, so I'm in the process of becoming certified. I have one more test to do, and there's also an event that I was planning on going to in

California, Palm Springs, California. It's a five-day event for coaching. Nyirka, one of the ladies that used to work with Tony Robbins, is going to show me a lot more. I have a lot more tools to be able to help people. However, that's about $3,000, $400 per month for the next seven months. So I'm thinking, is it smart to invest into building myself up as well as the business while also trying to get out of debt

because I didn't really see a lot of that in the actual book itself. No, I would not spend $3,000 on a business that you have made zero money yet. I made about $300 on the business. Well, I mean basically zero money, okay? Yeah. But I would start my coaching immediately to the extent that you're allowed to with licensing or whatever. If you have to pass a test to do it to be legal, then that's different. But, you know, I've used several personal trainers on different things over the years,

and I've never really grilled them on exactly what their background was. I more knew a connection with somebody who they had coached well and had had a process there. I mean, I don't look at – I haven't ever asked for their resume. Never one time. Their resume was they were chiseled and I wasn't, right? And so that kind of thing. And so it was – and they, you know, I coached somebody that I knew and came recommended, that kind of a thing. So anyway, what I would do is go make some money and do it while you're waiting, man. Do it in the mornings.

See, I've worked with a lot of people. I've successfully helped people, probably about six to eight people so far. Good. In terms of coaching. However, my thought process is how do I start getting money from it? Because by doing it for free, they reference to their friends. So at the moment, I'm not really a well-known name where I live. How do I take it from helping people to actually creating a career out of it? Well, what I would do is do some sampling, meaning if you can get somebody to come. Say, come out, I'll work you out a couple times and show you what the plan will look like.

And then that gives them a feel of how you're going to interact with them, what the plan's going to look like, and is it something they can buy into. And then you sell them a package of 10 workouts or whatever it is you do, however you're going to price it out and so forth. But my point is you don't need to stop waiting tables right now. Let's go make a bunch of money in the mornings. You've got all these mornings open. Let's go make some money with them. Just roll your butt out of bed and get over there and work people out, man, and make you some money.

And then, you know, go make $10,000, $20,000, $30,000 bucks, and then spend $3,000 with these folks. I'm sure the training that the lady's offering is probably worth it. It's not worth it to you because you haven't made any money yet. So go make some money, and when you make $20,000 and then you do this training, that will give you the ability to make $40,000 or $50,000 because you know how to do something more. But you need to go actually do this. Be a body in motion, not a body that is studying theory get moving go make some

money and uh it's just an amazing set of stuff starts happening when you do that and you've got the hours available to do it with your situation so that's the beauty you've got a natural transition here and you're just going to be a little bit tired oh well you're young you'll be okay and um you know just work just work there is no substitute for activity man go move stuff around nothing's moved unless it's shoved go make it happen and get you know give away a couple sessions get people started call up some of your friends and push them go man i'm getting started help me out here send me somebody that i can give two sessions to that is willing to pay me after that. You know, get out there and stir up your social media, stir up your network, and so forth. So, you know, you'll find some.

But just let people have a sample of what the workout's going to look like, and they'll buy in if you're doing a good job. This is the Dave Ramsey Show. 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. No contracts, no hidden fees, and if you're thinking our low cost means less coverage, think again.

Our voice and data service covers 99% of Americans, and our 4G LTE network provides the fastest internet speeds like more expensive carriers. We operate on the largest GSM network in the U.S. to ensure you receive reliable coverage virtually anytime, anywhere. Plus, you can keep your same phone and number and add multiple lines to save more. We're so confident you'll love Pure Talk USA that we invite you to try our service risk-free. Visit puretalkusa.com or call 844-862-3677. Enter promo code SAVEDAVE and receive 50% off your first month. That's puretalkusa.com. thanks for joining us america we're glad you are here connor is with us in pensacola florida

hi connor how are you i'm doing well how are you doing better than i deserve what's up hey so i'm 22 years old. I graduate in May. And within the next four months, I'm going to be making $75,000 a year. Good for you. But I'll be living at home with minimal expenses, about $150 a month. And right now I have around $32,000 in student loan debt. What is your degree in? Electrical engineering.

Way to go. Why are you going to live at home? I got a job near my house. It's at Eglin Air Force Base in Knightsville. Yeah. Why are you going to live at home? To save as much money as I can. Just for now.

I'll live at home for maybe a year or so and then probably move out and start renting, uh, before I step up for my three to six months emergency fund and, uh, at least 10, preferably 20% down payment. Um, so right now my parents are suggesting that, well, my, my, my route is going, uh, 2,400 a month towards my student loan debt and getting it out of the way initially and not investing in 401Ks, not doing anything, just attacking it as hard as I can.

That's what I see. But my parents, they said that I should at least try and get started on my 401K. I disagree. They're wrong. And I don't know why. I understand their perspective. 401k um i disagree they're wrong and i've taught i've taught more people i've taught understanding their perspective listen i've taught more people to get out of debt than your parents have all due respect to them uh that's fine i would not do that i would completely concentrate on the student loan debt you're freaking making 75 000 a year you need to pay off your student

loan debt as soon as possible it is the biggest blockade between you and your future right and that's and that's what i was trying to tell them and my my friend's parents as well they said you should you should contribute your full match so you can get you know five percent on your 401k you know you need to go that as soon as possible yeah and all these people are all multi-millionaires i guess no they're not okay so why is it we're taking their financial advice well i just wanted to get as many perspectives as I can. Well, you can do that if you want, but if you ask broke people how to handle your money, you're not smart. Right.

Well, I mean, both my parents are very well off, and my friend's parents are also very well off. They make over $150K a year. So I think they know how to manage their money. So I like to seek their advice. But at the same time, I've been watching your shows for a while, and it's very initially counterintuitive, but in the long run it makes sense financially. So that's why I think I should attack my debt first, full and foremost, and worry about my 401K. And I'll go a step further.

You shouldn't live at home more than three months. You make $75,000 a year, young man. Go get you a rental property. Move in a rental. Get yourself on a budget. Establish yourself as an adult. Pay off your student loan debt. Build your emergency fund.

Save up a down payment for a house. And you can do all of that within about 18 months of coming out of school. You've gotten a fabulous job, great career field. And establish yourself. don't live at home like a like somebody that has to you know like 75 000 a year don't live in mommy's house i mean really you can live there for a little while until you get yourself settled in a couple three months or something but go get your rental problem go get your rental i wouldn't live there and um i think you'll i think you'll establish yourself emotionally at a much higher plane,

spiritually at a much higher plane if you do that, and it'll result in a better financial situation. You do whatever you want. You're gathering perspectives. Now you've gotten mine. Miranda is with us in Dallas, Texas. Hi, Miranda. How are you?

Hi, I'm good. How are you? Better than I deserve. What's up? Well, me and my husband have about $25,000 in debt with a car and his fed loan. A car and what? A fed loan. Fed loan? Yeah.

School loan. Oh, okay. All right. Sorry. It's okay. And right now, I'm the only one working, and I make around $28,000 a year. And my dad, he passed away, and he left me some money, and I have $11,000 on a CD. And we was wanting to know if we should cash that out and pay towards our student loans. Okay.

How much is the student loan debt? Just the student loan is $76.93. Okay. How much is the student loan debt? Just the student loan is $76.93. Okay. And so the car is how much owed? $13,000. Okay. All right. And why is he not working?

He was going to school full time, but he's going to be working in the next couple months. Oh, good. All right. Yeah. Good. So, yeah, I mean, make sure you hold $1,000 for your beginner starter emergency fund. I'd pay the student loan off and a portion of the car off, and then let's start working very aggressively to get the car paid off as soon as possible.

And, of course, when he comes out of school and starts making some money to add to this, everything is going to go much faster, and then you'll build your emergency fund and walk right up those baby steps that we talk about here every day. That's exactly what I would do. Tori is on the line in Kansas City. Hi, Tori. How are you? Hi, I'm doing well.

How are you? Better than I deserve. What's up? Great. I have a question. I've read your Smart Money, Smart Kids book, and I've gone through the class, and I was just wondering, should we pay for homework and piano lessons and doing well at sports and that kind of stuff? I don't want to make him any more entitled than he already kind of acts like he is. He's seven years old. That's why I... Okay. Is he playing sports against his will

no no no why would you have to pay him that's for him to have fun well and that's true that was just an example okay a poor example so mainly i'm just trying to understand that's one i haven't heard some people pay for grades um at school uh and some don't i don't really have a strong opinion about it one way or the other as far as that goes. The thing you want to think about here is what message are you sending? There are some things you had to do when our kids were growing up just to stay alive because dad would take you out. Right. Okay?

There's some things you just do because, okay? You know, you don't get paid for not talking back to your mother. You just get to stay alive and that kind of stuff. So, you know, that kind of thing, right? You don't get paid for helping mom with something, you know, that kind of thing. But other things, I did want to create some teachable moments. So all sarcasm aside, some things we did just because they're the right thing to do and you're part of the family. Some things we did to create a teachable moment, and we called those work, and we paid commission on those.

At the Ramseys, we did not pay for grades, but I don't think if someone pays so much for an A, so much for a B, that they're a bad parent or that that's necessarily a bad thing. We just didn't do it. Neither one of us grew up doing that, and so we just didn't do it neither one of us grew up doing that and so we just didn't do that um and i i think probably i would not pay for it just i'm just i don't have a big strong opinion about i'm for sure i'm not gonna pay them to play sports um if piano is a push and you're trying to talk them into it maybe i don't know maybe but you're already paying for piano so that he gets the benefit of it. You're paying for the lesson. Right.

So, and I don't think I would pay for homework. If you're going to pay for anything, it might be the grade that the homework is a result of. But, I mean, you have to bathe. You have to brush your teeth. You have to have manners. These are not things you get paid for. You're doing them because I'm teaching you how to be an adult later. And if you don't have teeth and you stink, you won't be able to leave my home,

and I want you to leave someday. Absolutely. And, you know, find a pretty girl and get married or, you know, that kind of stuff, right? So it's the basic stuff. So some of it's just life skills that we're teaching, and we certainly wanted to not pay for everything because we didn't want to turn every behavior issue into a union negotiation, right? But we did want to have some things that we paid for. With our kids, it was only like five things.

And you just got a commission rather than allowance. And then when you got paid for feeding the dog or cleaning your room or something like that, you know, mowing the grass, whatever it is, then you had to break that money into three categories, give some, live some, in other words, spend it, and save some. Always give, save, spend. Give, save, spend. Give, save, spend. Always. Always do that.

And so just, you know, you don't have to overthink it, but always do think about what message you're sending. Like, you know, what are you trying to teach here? Because it's not really about the money. It's the lesson and that kind of thing. So good question. Thanks for joining us. This is the Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions, Brian is with us.

Coming in here wearing an avalanche jersey in the middle of Predators country. What's up with that? I like the Predators too. I like the M's too, so there you go. It's all good, brother. Welcome. Good to have you. Thank you for having me. So I'm guessing you're from Denver. Yes., so there you go. It's all good, brother. Welcome. Good to have you. Thank you for having me.

So I'm guessing you're from Denver. Yes. Okay, there we go. Cool. And all the way from Denver to do your debt-free screen. That's correct. Fun. And who's this young man you brought with you?

My nine-year-old son. What's his name? Isaac. Isaac. Welcome, Isaac. Good to have you, sir. Well, good, man. How much debt did you pay off?

$150,000. Wow. How long did this take? About six and a half years. Okay, man. How much debt did you pay off? $150,000. Wow. How long did this take? About six and a half years. Okay, cool. And your range of income during that time? The majority of it was about $40,000 to $60,000, and then the last two years it's been about $150,000. Whoa! What happened? I got a blessing. I got fired and then started doing real estate full-time. Best thing that ever happened to me. I got fired.

Well, I'm telling you, when you're handling your money right, sometimes that's exactly how it works. Yeah. So you sell real estate for a living? Yes, sir. Good for you. Well done. So what is this $150,000 debt? It was a car, credit card, 401K loan, lawyer, and my house.

Wow. Oh, you paid off your house? Yes, sir. Woo! A real estate agent with a paid for house there we go a unicorn that's a unicorn right there man for sure well done dude well done so tell me the story what happened six and a half years ago that put you on this process well it started about 10 years ago um i was having my son, and I was working.

That's when I started real estate. That's when I got licensed. And I had lost my job, and the market had started to turn. I owned two places. His mom owned one. We combined. The renter stopped paying, so we claimed bankruptcy. A couple years later, the marriage wasn't going great.

We were legally separated. I was living on the couch she was in upstairs and then i came home from a double one day and she'd taken half my things and my son and wouldn't let me see him and uh man i i was broke like i was like spiritually emotionally financially just broke on every level so i got a lawyer lawyer and got emergency orders to get my son. And I was calling my friend who was younger than me, doing a lot better than me. And he just kept saying, you need to listen to Dave Ramsey. He bought me your book. It sat there, collected dust.

And then he would stop talking to me until I would. So I read your book and then I listened to you every day. And that really just begun everything. Wow. Good for you, man. What a big turn in six years. Yeah. You've been through a lot.

Yeah. Very cool. How's it feel now to be on the other side of all of this with 100% debt-free? Man, it's amazing. It's surreal. It's unbelievable. It's going to cause your income to go up because you don't even need money now. That's right.

You know, because a salesperson who's hungry always smells bad. You know? It just changes your attitude. It changes the way you walk. Good for you, man. Congratulations. So what do you tell people the key to turning everything around? Because you turned everything around.

But, I mean, the getting out of debt. What are the things they need to do to get out of debt? Definitely need to stick with it. It's not a straight line by any means um the budget i had a great lady helping me with my budget she actually is uh endorsed by you i think melinda but um the budget and stick with it you you got to keep going i mean it's very hard but when you're by yourself and you're going through all that emotional turmoil with a family and everything you do fall off the wagon don't you yes and what what enabled you to get back on because a lot of people when they they try it and it doesn't worry they fall off and they never get back on well how'd you get back on uh you just got to keep going and just baby steps

and then i guess kind of allow yourself to fall off a little, but just get right back on. Nothing's permanent or forever. Yeah, except when you quit. That's right. That's it. Well done, man. Very well done. I love it.

Congratulations. Very cool. What was the hardest part for you? Well, I've read your book, and I'm real glad to know you. Is there an easy part? Fair point. No, it's all pretty. Hey, the price to be paid, the price you pay to win is never an easy price.

No. In anything. And it's always a price, but it's always a price that's worth paying. Because when you get there, you're like, yeah, I'll do it again. Yep. Yep. Yep. I'll do it again.

Very cool. Well done, sir. Proud of you. We got a copy of Chris Hogan's retire-inspired book for you. We want that to be the next chapter in your story that you become a millionaire and outrageously generous along the way. Now, is Mr. Isaac learning all this stuff along the way? Oh, yes. Very good.

He has to. It's mandatory. There you go. I love it. All right, it's Brian and Isaac from Denver, Colorado. $150,000 paid off in six and a half years, making $40,000 to $60,000 to $150,000. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free scream. Three, two, one. We're debt-free! I love that. Well done, sir. Well done, sir. Man, that's just awesome. Wow. Free call.

888-825-5225. Adam is in Indianapolis. Hi, Adam. How are you? I'm doing fine, thanks. How are you, Dave? Better than I deserve. What's up?

Yes, thanks for accepting this phone call. I've got two debts right now. One is a mortgage that I have on my home. And the only other debt I have was a personal loan my father had offered to me when I had gotten in trouble. He had paid for my attorney. And so I'm about halfway through paying off that personal loan. I'm just kind of trying to gauge as to where I should be saving and spending my money in terms of paying off my debts, the two that I have left. Should I pay off my father first and then worry about the mortgage?

Definitely clear that debt. Okay, the reason why I ask is because for me it's kind of like the monthly installment is always a good reminder of what I, the wrong I have done. And it kind of keeps me in check a little bit. He also has mentioned numerous times, do not pay me back. He said that since I didn't get married, my other siblings did, he would just give that to me as sort of a wedding present. I just don't personally feel like I could accept such a present. What's the balance? What's the balance owed to him?

I owe $12,500. And what is your income? Well, that's the thing. I get a disability through the VA. I served and came out a different person. And so I get $3,000 about take-home from the VA and $1,000 from Social Security. And then I get $500 a month because I rent out a room in my house,

about $4,500 a month. And that's your entire income? Correct. Okay. Are you planning on engaging in a career in the future? If things progress, yeah, I keep going back and forth,

you know, with getting better, my recovery. And so I think it's just kind of take it one day at a time. You know, if I were to just right now not be able to, if I were to mentally not know, I can't work in the future, that would kind of devastate me.

But, I mean, it's definitely a goal that I have in the future. Okay. Well, thank you for your service. We appreciate that. And I would clear your dad's debt. And then if he wants to, and the way I would do it is this. I would just keep paying monthly payments and save up the money to pay off the balance at all at once which you have about twenty one thousand dollars in savings right now call dad call dad and say

dad i'm going to clear this debt today okay and there's a possibility he says don't i'm just going to forgive it either one's fine with me if you want to accept the forgiveness of the debt and he wants to do that because he's as he said paid for weddings and stuff on the other side, that's fine. I don't think you're doing anything wrong in your recovery to accept the forgiveness of that debt by your dad. Because you're doing all the hard work to stay sober and stay straight and do all the stuff you're doing, okay? So, now, if you do end up writing him that check, I want you to keep a copy of that check and I want you to frame it and hang it over where you pay your bills by your computer. So you see it all the time. You wanted that monthly reminder.

I'll just hang it right there and let you have a permanent reminder. And but I wouldn't just keep paying payments as my monthly reminder. I think you're better. I think you're in better shape than that. Let's get rid of this debt one way or the other right now. This is the Dave Ramsey Show. Thank you for joining us, America. This is the Dave Ramsey Show. We're glad you're here.

Natalie is in Dallas. Natalie, welcome to the Dave Ramsey Show. How are you? I'm well. Thank you for taking my call. Sure. How can I help? My husband and I are $365,000 in debt.

Oh, my Lord. Yes. And the smartest thing we've done is with our home purchase. So we are now sitting on about $200,000 in equity. And we are thinking about selling our house to jumpstart our debt snowball. And we have a good income, so we can, you know, we will still have our good income for years with stable income. We do have two kids who, one is a junior in college, one is going to be a freshman next year.

So we're also trying to fund college. Okay. And so what is the $365,000 in debt? Mostly student loans. When I went back to grad school, and we also owe a family member about $84,000 from a failed business from when we were younger. So you have like $200,000 worth of grad school? Well, some of it was my grad school, and some of it was we've been getting the Parent PLUS loans. Oh, okay. So for the kids? Yes.

We have three daughters. One is all the way through college already. Okay. But the bulk of it was my grad school. So what is your degree in? Nurse practitioner. Okay. So what is your degree in? Nurse practitioner. Okay. So what's your household income?

Our base is $184,000, and I have a side job at $46,000 or so, and I've recently picked up another side job. So you're single? No, my husband and I. Oh, the base between the two of you is $184,000? Yes, sir. Okay, so you're making like $2.25? Yep. Okay, all you're making like two and a quarter. Yep.

Okay, all right, good deal. Here's how I would weigh it out, okay? What gets you to where you want to be 10 years from now, the fastest? And so you got this great income, and you're going to use it up on kids' college and on cleaning up $36 up 365 000 and stay in the house and you should be able to do that in like four years or you can sell the house and do it in like two years that makes sense i mean if you put $100,000, if you make two and a quarter and you live on $100,000, and you put $100,000 towards this, it's done in three and a half, four years, right?

Uh-huh. That's what I'm doing. But if you sell the house and throw $200,000 out of equity out of it, so how much do you like your house? Not enough to feel distressed by the money. Okay. All right. So at the end of this, then, three years from today, you're starting to save to buy your next home.

Mm-hmm. Are you going to buy anywhere near where you live now? Well, that's kind of the variable. I mean, we have one daughter who is married, living in Philadelphia now, and, you know, the other two, who knows where they land. So you might follow the kids. Maybe. Okay. All right.

So you sell the house, you rent for two years, three years, and you save up your down payment for your next house, and then we see where you land, and you buy something at that point again. And that's an okay move, right? So you're moving twice in three years. And would you advise if we do that and we take our lump sum and apply it to our debt, do we follow the debt snowball principle with the smallest to the largest? Oh, definitely, definitely. Okay.

Definitely. And I want you on beans and rice. I mean, no vacations, no eating out. I mean, you've got to clean up this ridiculous mess yep yep and uh but i think i heard you say stress and i think i fit i think i hear stress in your voice so i think you guys are probably over it and that you don't really care what other people think you're ready to get this mess cleaned up and get this behind you move on with because i'd love to see you sitting there making 250 000 three years from now and have no

payments in the world yes we would too and by then all the kids are just about out and you're sorry everybody's off the payroll yeah everybody's off the payroll and the house you know all we gotta do now is buy a house and get rich you know yeah and that's really where you would be so if you're gonna take this step back make sure you follow through and that's really where you would be so if you're going to take this step back make sure you go follow through and win you know don't take a step back out of house and go rent something and then not win but uh but yeah i think it's not a bad plan at all uh the stress is getting to you and you but again don't the selling of the house doesn't do it you got to play all the way through you're gonna have to beans and rice it. Scorched earth on the lifestyle. And don't be spending a stinking dime anywhere.

Let's get this stuff killed as fast as you can. Good question. Wow. I think you're going to do it. If my debt snowball is projected to take four to five years, is it smart to have more than $1,000 in my emergency fund? Matt on Twitter. Matt, I got to tell you, I've been doing this 25 years,

and the number of debt snowballs that last five years is almost zero. There's a few of them, but there's not many. Most of the time, you need to do other stuff like get your income up, like six jobs. You need to do other stuff like get your income up like six jobs you need to sell some crap you've got a stupid car or something's going on that's a long time or you got the world's worst degree and so you you know you got two hundred thousand dollars in student loan debt to be a german polka history teacher or something i don't know i don't know, you got $200,000 in student loan debt to be a German polka history teacher or something. I don't know.

I don't know what you did. But the number of times that it actually ends up being four to five years is very low. And that's why I'm comfortable with the $1,000. I would attack other issues in this rather than get used to the idea that it's going to take five years and I'm going to adjust the plan because it's going to take me five years. Don't take five years. Don't take five years. Do it faster than that.

Again, I talked to a few people here or there that it actually works out that way. And sometimes when you lay it out initially, the very first time you lay out your dead snowball, yeah, the actual math is five years. But then you start going, okay, what can we sell and what extra work can we do? And during that five years, your income comes up and you keep your lifestyle down. And the further you get along in traction, the more you cut your lifestyle and the faster you accelerate. Mindy is in Chicago. Hi, Mindy.

Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. How can I help? for taking my call. Sure. How can I help? Well, my husband and I found you at the end of December, and so we're currently on baby step two. Yay. Yeah, I know. It's good. We currently have about $190,000 in debt. We have decent incomes. My husband makes about $110,000 a year. I'm a small business owner. I bring in about $50,000 a year. Right now, we can currently live mostly on his income. And what I'm making, we're throwing towards that as much as we can.

Okay. So my question for you is, currently we, well, actually we're writing photographers. So we rent some equipment to do our job. We don't have much overhead in the business. It's mostly just these rentals. I want to see if it's worth it for me to go ahead and purchase the equipment I need. What's the break-even on it? How quick do you get your money back?

Quickly. I mean, right now it's costing us about $3,800 a year to rent this equipment, and it would cost me about $3,400 to purchase it. So it takes you a year to get your money back on a $50,000 business. Yes. Yeah. I don't think I'd buy all of that. Okay.

I might buy some of it. I'd like for you to have a break even faster than that. Okay. Like six months. I want it to pay back in six months. Or you've got a way you can pick up some jobs that you couldn't pick up otherwise because this equipment's sitting there and you didn't have to fool with a rental that we can increase your income as a result of this.

Okay. But a year is a long time to get your money back on stuff in a business that size. Okay, great. So it's, you know, let's see if we can do something to change the equation. It's close to buying it, but I don't think I would. No, I would rent it. If we stand firm and go, this is the numbers, and it's a year, no, I'm just going to rent it. Because the problem with stupid photography equipment is like stupid computers.

The market moves so fast in the equipment 10 10 months later you wish you had something else because the dadgum digital world changed it you know and i own a bunch of it around here and i was one of our guys was showing me what we paid for a really nice video camera the other day couldn't believe how cheap it was compared to what they were years ago so things are changing changing fast. This is The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year.

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