The Ramsey Show - App - Attack Debt the Same Way You Would Eat an Elephant (Hour 1)

Episode Date: June 18, 2019

Get Started on Your Debt-Free Journey We’ve made it even easier to get started taking control of your money.  Learn How! How Fast Can You Be Debt-Free? You don’t have to be in debt for the rest of your life! Answer 5 simple questions and our Debt Calculator will show you how quickly you could be out debt!   Get the Complete Guide to Budgeting. Budgeting is often misunderstood and overcomplicated. It doesn't have to be! We made it simple. After 90 days of budgeting with EveryDollar, 9 out of 10 users feel more confident in their financial future. Get the Complete Guide to Budgeting.   Get the Coverage You Need. How does your coverage stack up? This Coverage Checkup will show you what you need (and don’t need), which questions to ask, and where to get the best coverage.   Find the Right Financial Advisor. Finding the right financial advisor doesn't have to be complicated. Our free guide makes it easy to know what questions to ask so you can make a confident choice. Get the guide!    Listen and Watch Anytime, Anywhere.   The Dave Ramsey Show app lets you download episodes for offline playback, customize your content, and see what’s coming up!

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'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. You jump in. We'll talk about your life and your money. Laura is with us to start off this hour in San Antonio, Texas. Welcome to the Dave Ramsey Show, Laura.

Hi, Dave. Hey, what's up? Well, my 82-year-old mother has developed a serious gambling addiction over the last three to four years that we just kind of recently discovered. Your 82-year-old mother? Yes, yes. What is she gambling on? Well, she goes to the Native American casinos, and she also gambles on

a social media game where she doesn't even win money. She was spending up to $700 a week sometimes on this social media video game that simulated gambling. And so my question is, you know, what are some steps that we could take to protect her and my dad? He's also 82. He doesn't even know how to turn the computer on, but she's very technologically savvy. She's a brilliant woman who has always worked really hard and managed her money well, and we think that this has been brought on by a medication that she's taking that we're investigating about. But in the meantime, you know, we need to be able to take control of the finances

so that she doesn't, she's already started borrowing against their house that's been paid for forever. So is she willing to relinquish control of the finances? I'm going to try to approach it, you know, with as much love and care. Where's your dad in this? Why is he not approaching it? Well, he kind of relies on her. You know, she's very, very smart,

and he relies on her to kind of manage everything, and she's always done such a great job. I mean, does he not understand that she has a problem? Yes, and he has. And he won't address the problem? Right. that she has a problem yes and he has he won't address the problem right he he he has partnered with me um in our last attempt to to do this and he checks the he actually drives down to the credit union to check her activity to see you know what's going on with the account weekly um but i you know i tell him you know what, she can have a credit card that you don't know about.

She can, you know, there's lots of ways for her to get money that you don't understand with the online gambling and that sort of thing. Okay. Well, there's, I mean, there's a spectrum of ways you can approach this, and you'd have to be in touch with someone, an elder law, someone who deals with the elderly in law situations like this. But on one end of the spectrum, the easiest end is just to get her to admit that that's where she is, and she then relinquishes all control, and you take her name off of everything,

and you unplug the computer. And, you know, she's just not allowed to go to the casinos anymore, period. And obviously she has no access to money, so she can't do that unless she, you know, and if she's not online, it would make it very, very difficult. But, Mom, you know, you have to get her to admit that she has a problem to voluntarily relinquish that, though. And that's going to be your dad being more forceful than he's been. He's been wussing on this. He's going to have to play on this.

He's going to have to play hard to get her to do this. Because they don't turn loose of this stuff easy. So that's way number one. And it might sound like this. You might want to also get with a good family therapist on how to do an intervention. I'm not a family therapist, but an intervention is what we're talking about here. But it could sound like this. Mom, you've got a real serious problem, and you go through the whole process of explaining all of that.

You're destroying your lives. We're not going to stand by and watch it. And so you're either going to, we're going to do this the easy way or the hard way, Mom. It's up to you. The easy way is you admit there's a problem and you relinquish control. The hard way is we're going to drag you before the judge and have you declared incompetent.

And that's the other end of the spectrum. And that gets really nasty. Really nasty. And you would just, you know, on the basis of, you know, she's elderly and she's out of control and she's destroying herself. She's a financial danger to herself and her loved ones. And so it's not anything to do with you protecting your inheritance. It's you've got to protect a place for your dad to live and her to live out their lives. Right.

Well, we're set financially. We have a beautiful life. I just want to make sure that she has a beautiful, you know, the rest of her and dad's life as well. Exactly. And this is not bringing joy to her anyway. Addictions never do. So, you know, you just got to, it's going to be a very, very hard series of things. But basically, you've got to go through every single account and take her name off of everything. And shut everything down, shut her access down.

She has no access to the checking account. It goes all straight to your dad's name. And you and your dad can watch over it, and you can take care of her. But when you've got 700 a week going out on a social media game, you've got a problem. I wonder what, and I guess this will be a matter of consulting the attorney, what it would mean to freeze her social security or freeze her account so that she can't take out any loans or credit or that sort of thing well i mean you can you can you can put a label on her credit bureau report that would show up if somebody she tried to pull alone um that just says you know she's been she's uh the power

of attorney's been assigned due to dementia or something like that and just put something on there like that that just you know without shamingaming her, but just take her abilities away from her across the board. But you can't do that without her permission or the court's permission. She's an adult. You don't legally have the right to, you know, assign all of these labels to you, Laura. I can't walk in and just do this to you. But if I cared about you and we were close i could drag you before the judge and judge with a series of evidence could

declare you to be incompetent if you weren't voluntarily willing to do that um but that's what needs to happen here you're right you guys are you and your dad and your dad's gonna have to really be more forceful than he's been i really sense he stands in the background and just kind of wrings his hands. And she's been kind of wearing the pants in terms of forceful personalities in this discussion. So that's getting ready to change. Because that's the only shot you've got at the intervention actually working. But again, I'm not a therapist. You guys check with somebody that has good family counseling. Maybe participate with them.

Maybe a pastor of their church. Participate. Someone that's got credibility in her eyes, that you can move her. The easiest path, by far, is for her to accept that she's got a problem and just voluntarily turn this stuff over. But it's a very difficult process you're entering into. I'm so sorry. Folks, the second fastest growing addiction in North America today is gambling. The internet has caused an explosion in gambling addictions. We see them in here every week with financial problems. We're looking at their financial

problems. The fastest growing is online porn. The addiction to that is by far, those two are explosively, quietly behind closed doors, exploding. I got a call the other day, and I thought it was worth talking about again. It was from a wife looking for life insurance for her family. She asked why I only recommend term life insurance instead of cash value plans like whole life. I usually explain how you overpay for coverage, earn a horrible rate of interest, and don't get your cash value when you die. But this time, I just had her go straight to Zander.com and get a rate. And then we compared that rate to the

whole life plan, and she immediately saw the huge savings. She realized all the things she could do with that money like paying down debt, investing in a smarter way. That made it real for her. It makes no sense to buy or keep a cash value plan when there are smarter, less expensive ways to protect your family. That's why I suggest that everyone go to zander.com or call them at 800-356-4282 and get a free quote that's zander.com or 800-356-4282 eric is with us in ogden utah hi eric welcome to the dave ramsey show hey dave how are you doing better than i deserve what's up awesome um my wife and i are are just starting to kind of look into some ways to make some passive income, and we stumbled across some guys that talk about buying and selling land wholesale, just like a plot of land, not a house on it or anything.

We're just kind of wondering what your thoughts were on that. Well, if they're acting like they have some kind of system or something that they want to sell you i'll pass um basically real estate is real estate if you can buy real estate super cheap and sell it for retail you can make money on it right i mean that's not rocket science and so if you buy a piece of ground that's worth a hundred thousand for fifty thousand and you sell it for 90 you made 40 right um and so but so the the hook in all of those ideas and i did that for a living for a long time um and i still buy a lot of real estate but the hook in that is just finding the deal it's a needle in a haystack and that's okay the deals are out there but these guys that sell these systems on how to

get rich in real estate all act like you can just pick up the newspaper and dial four phone numbers and all like anybody does a phone newspaper but you can open up the internet and dial four phone numbers and voila you'll buy a house or a piece of land at a bargain and that's just a bunch of crap you're not going to and so you know if you can find a piece of ground at a deal in a market where people are buying land, you know, you can flip it over. Now, here's the difference. Land, raw land, is harder to resale. There's not as big a market for it as there is, you know, dwellings, condos and houses and duplexes and so forth. There's more of a market for that.

Much easier to resale 10 million dollar office buildings are harder to resale there's not as much of a market for them if you bought one at a deal so it's just a matter of you know what you're talking about but the way you describe that in your entering sentence made it sound like you've been to some seminar and that's a good way to get screwed right there it's a good way to end up broke so there is not a uh you know the process is you hunt and scratch and claw and appraise and you know the values and you reappraise and you really know that you're getting a deal and you pay cash for whatever you're buying in a market that is fast enough moving that it can be resold in a reasonable period of time but there's not as much market for raw ground big plots of ground even small plots of ground city lots you know those kinds of things subdivision

lots so there's not there's not as much of a market for that as there is a house on the lot and so you know it's a tougher it's a tougher flip uh but if you're in an area where land is just hot and uh and you you know you can get you can turn around get it sold that's fine and you can sneak up on a deal occasionally that's fine but um here's the numbers i here's what i used to deal with when i was doing this eric and i I it's been a long time since I personally did this but I bought foreclosures and I bought distressed properties for a living for five years and so I've I've actually physically owned a couple thousand properties over the scope of my real estate life and most of those were flips and my average was this and i did it for

a living and i was known by everyone in the community as someone that you could go to with cash i could close the property and you know five days three days you could get your money and stop a foreclosure i was you know i had connections in the banking the bankers that had property they were having to foreclose on they would call me uh you know the real estate people in the community knew me i had i had a whole network built up which increases your chances by the way but for every property that i stepped on the property with my foot and walked through the house or looked at the piece of land or looked at the apartment or whatever it was one out of 200 i bought so i spent all my time looking at deals that were not going to happen

that's the ratio so that's what i mean it pisses me off when these guys with these nothing down seminars all go well you just buy real estate you just you just run over there and you can and george just did it and in 24 hours after taking our seminar he bought this house and that's just a bunch of crap it just doesn't happen it's a complete fraud okay so don't fall for that kind of stuff but can you buy real estate at a deal sure you can buy jewelry at a deal you can buy cars at a deal you can buy art at a deal but you can buy cars at a deal. You can buy art at a deal. But you have to know the marketplace. You have to know the product. And you have to turn over a lot of rocks before something runs out.

And it's a numbers game. And that's where the money's made. So, Will is with us. Will's in Knoxville. How are you, Will? Good, Dave. How are you? Better than I deserve.

What's up? I've got a question. So I just started listening to you recently and wanted to get your also a farm payment or farm mortgage, as you call it. Is your home on the farm? No, it is not. Okay. And how much do you owe on the farm? I owe roughly $400,000 on the farm. What about your home?

About $135,000. Okay. and what is the farm for? Do you farm it for a living? Yes, yeah, I mean, I farm it to raise hay and such for cattle, etc., and for sale. Okay, so, but that's your full-time job? No, it's not my full-time job, no. So you raise enough hay to justify a $400,000 investment? Well, it seems to be at least paying the mortgage on it. Okay. I have a rental property on it as well that came with it. Okay. And you've got a lot of hay coming off there then.

You're cutting, what, three times a year then, right? Yeah. Yeah, at least three. Maybe four. Okay, good. All right. So you're a full-on hay operation. Because most people that say that, they don't make anything. That's why I was asking.

You know what I mean. People kind of play at this. But you're really working this thing. All right. And what's your household income, not counting the farm? About $250,000. Wow, good for you. Okay you okay well our baby steps are baby step one is a thousand dollars saved i'm sure you have that two is you become debt free except your

real estate okay and so we pay off the cars will be your next step all right and you do that real quick you make too much money of car payments that's silly then you need an emergency on the i'm sorry that was part of my question, I guess, on the car. So when I purchased the two cars, one for me, one for my wife, I had the money, but I decided that with the interest rates I got that I was going to just immediately invest it. No, you're kidding yourself. And so far it's worked. You're kidding yourself.

So far it's worked. I'm sorry? You're kidding yourself. You're not getting rich off of borrowed money on cars invested in the market. That's just a little math thing in your head that made it feel good. But if you have the money, write the check and pay them off today. Okay. Well, that was part of my question because I've had it,

and it seems to have beat the interest rate so far. But so what? That's not really your wealth building plan and you're screwing around so if i cut the check for them go ahead and get them off um where do you suggest uh my extra cash flow so to speak because a lot of my farm what i've uh as i've gone over the last few years i I've cash flowed some of the expenses, for example, for the farm equipment, etc. So I've tried to keep that a debt-free operation, which I've been able to do, of course. Good. Well, I would keep everything debt-free.

The reason I'm keeping everything and moving towards debt-free is all the data tells us from 30 years of doing this that people build wealth much faster when they don't have payments. It's a real simple thing. And you have a great income, and obviously you've done a great job. You're not bankrupt or something. You're not doing really extreme stupid stuff here or something. But you ask our system is to become debt-free, but the house is baby step two. And then baby step three is you have a fully funded emergency fund of three to six months

of expenses. And once you've got that, then I want you investing 15% of your income into retirement. That's baby step four. Five is kids' college, if that's applicable. And then six is we pay off the real estate. And in your case, I pay off my house first. It's a much smaller mortgage, and it would be nice to have your home paid for. You ought to do that fairly quickly, too.

You may have a pile of cash laying around there. We haven't talked about it, not counting retirement. If you do, just start writing some checks for cars and house. Let's get it all paid off and then let's tear into that $400,000 mortgage. If you were sitting there with all that stuff paid for, how would that feel? Awesome. We'll see you next time. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225 deanna is with us in kansas hi deanna how are you hi dave thanks for taking my call sure what's up my husband and i have been working the baby steps since this january and so far we've paid off eleven thousand dollars so we're pretty excited about that great um we we sat down last night to crunch some numbers

and it looks like we can be out of consumer debt by july of 2022 my question is why do we how much debt have you got a fair amount uh car loan credit card um home equity loan um about 80 now 80 000 What's your household income? About $100,000. Why are you taking so long? I don't know. I felt like we were making good progress. Well, the typical person that's following our plan would do that in two years.

Okay. We'll crunch numbers harder. My main question, though, is after we do that and have our emergency fund fully funded, it will only take us about two years to pay off our mortgage. We have two kids that are seven and nine. Does it make sense to, I know you really preach going in order, but we'd like to have that paid off just to get it over with. What would you recommend?

Should we just go ahead and go in the order? So what's the balance on your mortgage? It's about $65,000 right now. That's awesome. Well, that's going to be great. Yeah. Very cool. You can do that if you want.

I wouldn't. It'll take three years to pay off your mortgage instead of two if you follow the baby steps. Okay. And so it doesn't really change the numbers that much because we're talking about fifteen thousand dollars a year is fifteen percent of your income going into retirement a baby step four because you make a hundred right okay so for two years that's that's thirty thousand bucks and if you can pay off this house in two years that's thirty thousand a year you're doing this so that means it would take you three if you kept if you stayed

with the baby steps. So that's three years you've put in $45,000 at your young age. Now, as far as college goes, if you want to just touch that base and keep going past it, sometimes people will touch it lightly until they knock out a small mortgage like this, meaning you might start like $50 a month or something going into the kids' college and just so you can kind of check that box and move on past it. But I would say three years to pay off the mortgage instead of two and stay with the 15%. That's what I would do.

And I want you out of debt as bad as anybody you've ever heard of. It's all I do. So, hey, thanks for the call. Ryan is with us in Oregon. Hi, Ryan. Welcome to the Dave Ramsey Show. How are you doing today? Better than I deserve. How can I help?

Good deal. Hey, so we've been kind of following. We went through FPU last October, and we've been doing pretty good. The only thing that we really have had any loans and stuff on have been pickups or vehicles. I've got $20,000 left on my pickup, and I have got 20,000 left on my pickup and I have 10,000 sitting in the bank. And the reason for that, because I know I'm supposed to put it on there, is because my job is going to be ending here in about three to four weeks. And then my car, my cheap car that I just got back in August to drive back and forth to work, the engine just blew out on me, and so I'm going to need to replace that. I drive between 100 and 150 miles a day to commute to work, so I have to have something that's going to be somewhat reliable, and we only have one other rig at home

for my wife in town. What's your new job? So a new job I don't have exactly yet. I'm a union electrician, and so I'm in construction. So as soon as I get done here, I'll go back on the books, and I'll probably be back working, I'm going to guess, within two to three weeks or less. So I don't anticipate being off long. And so I figured what we'd do is we'd throw all the money that we had that was above what we were going to use on the car, and $1,000 for the emergency fund, we'd throw that on the pickup once I had my other job and started going with that again.

So you're running three cars, right? No. Actually, I only have one right now. Okay, so the pickup. Correct. That's the only one running. So that stays at home with Mama, and you drive the miles on the old car? Correct.

I got you. And right now I'm currently driving my mom's car. And your household income is what? Between $100,000 and $150,000. It kind of depends on the year with the jobs and stuff. It'll probably go down slightly this year because I'm in a foreman position right now that will probably not happen at the next one just because it's going to a new place. Gotcha.

Okay, so here's what I would do. You're right. I would pick up a little car that we're going to pay cash for out of your $10,000. I'd land the new job. How much would you recommend spending on a new car? As little as possible right now. I mean, a couple grand probably. Okay.

$2,000 or $3,000 maybe, something like that. The good news is you make good money. And so if I'm in your shoes, it's going to sound like this. I'm going to buy a $2,000 or $3,000 maybe, something like that. The good news is you make good money. And so if I'm in your shoes, it's going to sound like this. I'm going to buy a $3,000 car. I'm going to sit on the rest of the money until I land the new position two weeks after you get on the books, right? Then you know what you're dealing with in terms of income, household income. Correct. At that point, we push play again on the baby steps.

And you take everything out but $1,000 and throw it at the $20,000 truck debt, and then you hit the $20,000 truck debt with your beans and rice budget hard. You're living on nothing, and you knock that thing out very, very quickly with your good income. Then you build an emergency fund of three to six months of expenses. At that point, I'm going to save up a little more money beyond the emergency fund and move up in beater car. Move up from a $3,000 car to a $10,000 car and pay cash for it. Okay.

That's all going to take you about two years. Okay. Okay. Okay. Well, I wasn't sure if it would be smart to get a little bit better car and make sure that I'm getting to work. No, you're getting to work. A $3,000 car will get you to work. Okay.

And we're not talking about it will take very long here. That or you need to sell the truck, Juan. It's up to you. Well, that's the only debt we've gotten. At that point, I use it too much. I know a lot of people don't use a truck for what they're for, but I use it constantly. So pay it off. Yeah.

And pay it off by buying a cheaper car. The more money you spend on this car, the less you're going to throw at the truck, the longer you're going to have the truck debt. I'm not good with that. If I'm you, I'm not, because I want to win with money, and this truck is not winning with money. It's heading the wrong direction. And we can't sit around and act like this is okay.

It sucks. You need to be out of truck debt. You make way too much money to be this broke you make 120 000 a year and we're having a discussion about you buying a three thousand dollar car you should not be in this position you work too hard to be this broke and so quit acting like it's like okay because all your friends act this way it's not okay it sucks so work your way through this dude push your way through it you can do it you can do it and you're gonna be really glad when you get out the other side of it i promise you kevin is

in california orange county hi kevin how are you i'm good dave how are you today better than i deserve what's up okay so just to give a little background about myself i'm um i just turned 27 i'm on baby step uh four um i don't do five because i'm single and um i don't yet own a home so i'm not on six now i've been saving for a down payment on a home and i have about 85 000 saved way to go oh thank you and my uh real dream is to own a home by age 30. Now, I live in Orange County where prices are very steep. Yes, they are. And I was wondering, because of that, I was wondering if there's any way into your rule about the 25% take-home pay when purchasing a home? My rule is not a random rule. My guideline comes from the idea that the best way to become wealthy is to get out of debt as fast as possible.

Right. Just because you live in Orange County doesn't mean you get a pass on math. Of course. And so math still works there. And so, you know, what's your household income? You're doing really good. Oh, thank you. I make $75,000.

You save some serious bank. Well done. Yeah, here's the thing. Buy a house with your good, huge down payment that you can put on a 15-year fixed and pay it off in 15 years or less, and you will become a millionaire much faster doing that than you will rationalizing and buying a more expensive house that makes you where you can't breathe and you become mathematically what we call house poor and it it basically ties your ankles together while you're trying to run a race and you don't want to do that average house

price in america right now is about 219 000 average house price in orange county is about 600 it's almost threefold the national average that's what you're facing. But with your income and your ability to save, as good as you're doing, I think you'll be buying a house, an average house right there. This is the Dave Ramsey Show. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples free shipping and with the new promos they run every month you'll save even more use the magic word the promo code ramsey and you'll get the best deal today's questions from michael in oklahoma

dave would it be a good idea to use money from a 401k loan to buy a new trailer house outright we live in an old trailer that needs a lot of work i don't think it'd be a good idea to put a lot of money in an old trailer uh when we need a newer one to live in i could just pay myself back with interest what do you think well you're doing two dumb things together i wouldn't do either one okay number one i don't buy trailers the reason is is they go down in value mathematically it's a car you sleep in it's a big item that you put a lot of money in that goes down in value so it wouldn't do that if your old trailer is trashed out then you can sell it move it off and get a construction loan build a house on your lot if you own a piece

of ground or on your land if you own a piece of ground if that's the situation or sell the whole thing trashy trailer and piece of ground and go buy a house but at least something's going up in value then uh and so i do not do not recommend mobile homes for that reason they go down in value and some of you folks are buying like $100,000 mobile homes. It's like buying a $100,000 car. What's it going to be worth in 10 years? $10,000. You know? It's going to go down like a rock. That's what happens.

And so, no, I would not do that. The second thing is, in no circumstances did we ever tell you to borrow on a 401k. Ever. Here's why. Two major problems you to borrow on a 401k, ever. Here's why. Two major problems when you borrow on your 401k. Major problem number one is you unplug the good investment in mutual funds that you should have been in, making you 10% or 12% rate of return, and you pay yourself 5% or 6%, and it feels smart because you're paying yourself interest,

which is exactly what you said. It feels smart, but it's not smart because you're getting five instead of you're paying yourself five. You're paying interest, but you're getting the interest. So that's kind of like one pocket to the other. It's not like you're gaining money here. You're not really gaining any money. It's like putting a payphone in your own house, you know, doesn't do any good, right? So you're paying yourself the interest that doesn't work any good right so you're paying yourself the interest that doesn't work and you're missing out on someone else paying you two or three times that it doesn't work so so that's problem number one problem number two is when you leave your company

and you will leave your company when you die when you get a better job or when they fire your butt you will leave your company one of those three ways 100 of the time so when you get a better job, or when they fire your butt. You will leave your company one of those three ways 100% of the time. So when you leave your company, if you have that 401k loan outstanding, it is considered by the IRS an early withdrawal on your 401k, and you have 60 days to repay it. If you do not repay the loan in full in 60 days, they hit you with a 10% penalty plus your tax rate. If you're in a 30% tax bracket, that'd be a 40% hit on your butt.

You're going to lose $4 out of every 10. It's going to hammer you. The worst possible time to have to come up with a big pile of money to pay off a loan is when you just got laid off or when your wife would have to come up with it when you die. So never, that's like complete sentence, never borrow on a 401k. Never buy a trailer. How many nevers do we have to put in the sentence to say

never borrow on a 401k to buy a trailer? That'd be like never, never, never, never, never, never, never, never, never, never. There'd be two checks in the sentence to say, never borrow on a 401k to buy a trailer. I'd be like, never, never, never, never, never, never, never, never, never, never. There'd be two checks in the stupid column. That's what you'd be doing, okay? And that's why. Angela is with us in Panama City. Hi, Angela. Welcome to the Dave Ramsey Show.

Hi, how are you? Better than I deserve. What's up? I am just getting started. I found Financial Peace Re revisited at a yard sale for 50 cent good you got a deal indeed it has put a fire in me though and i need to know where to get started i love it way to go how long ago did you read it uh yesterday the whole way through in one day.

Wow. I couldn't put it down. Well, I am so honored. That's my very first book that I ever did, and you got a hold of it at a yard sale. That's hilarious. I love it. That's fun. Well, so good start.

In that version of Financial Peace, and there's been like six versions because it's been updated over the years, did it have the chapter on the baby steps? No, it didn't. Okay. I'm going to send you the newer book called The Total Money Makeover that outlines the baby steps. What we figured out after that book was written years later was that we all need a very detailed, clear path on how to get from where you are to where you want to go. And we call those baby steps.

You can get anywhere if you take one step at a time. You can eat an elephant if you eat a bite at a time. And what seems like overwhelming becomes very doable when you say, do this first, then this second, then this third. Okay, the baby steps are you first save a thousand dollars baby step one two is you start getting out of debt everything but your house listing all your debts smallest to largest i know the debt snowballs in that book listing your debts smallest to largest and attacking them in that order and then once you're out of debt everything but your house

you put your emergency fund in place of three to six months of expenses then you start saving 15 percent of your income towards retirement then kids college then you pay off your house you put your emergency fund in place of three to six months of expenses then you start saving 15 of your income towards retirement then kids college then you pay off your house and baby step seven has become very wealthy and give a bunch of it away that'll take you about a decade to do all of those steps give or take seven to ten years and you'll be probably on your way to being a millionaire at that point we also have the class called financial peace university and it comes with a one-year online membership where everything's online including our best the world's best budgeting tool which is called every dollar it's 129 to go through this class the one-year membership is free the every dollar app connected to your bank is free as a part of that. Would you like to go through the class as my gift? Oh, definitely.

Are you married? I am married. Can you get him to go with you? Absolutely. He has to. He has to because if not, you'll just be mad at him all the time. We have six children. I want to get things right for them.

I love it. I love it. I love it. I love where you are, and you've got a bargain on the financial peace book at the yard sale. Now you've got a bargain on the class because I'm giving it to you. Your life is good. Hold on, and Kelly will get you signed up, and you guys attend the local class. It's nine weeks long, and then you've got the one-year membership to everything going on in there inside the thing. Hey, if it's summer and you guys are thinking about vacations,

the average cost of a family vacation is about $1,200. It's $4,600 for a family of four. What if you saved $1,000 this summer instead of spending it? What if you then started to pay off your debt? What if you finally said, I've had it like she just did? See, I love where she is. That's why I gave her the class for free because she's going to go do it. That's why.

I don't mind helping people that are going to go do it. I love helping people that are going to go do it. For 25, almost 30 years now, Financial Peace University has taught almost 6 million people not only how to get out of debt but how to invest, and you can be next. And see, now it's such a bargain because we include every dollar plus in there, which is $129 a year just for that. Okay, and that connects to your bank, and it's the world's best budgeting tool that about six or seven million people are using that thing right now.

And all the live streams from all of our live events are part of your membership. You can watch the live stream from anything that we're live streaming. We've got trusted financial coaches online there that will answer your questions. You've got bonus content. And after you finish the class, you can go through the next class, the Legacy Journey or Rachel Cruz's Smart Money, Smart Kids class, teaching parents how to teach kids. Hey, there's no more excuses.

That one-year membership is included for all of that and, of course, the nine-week class. You can start changing your family tree right now during the summer. And there's classes everywhere. So just learn more about Financial Peace University. You can go to DaveRamsey.com or you can call us at 888-22-PEACE, 888-227-3223. For those of you who have been through the class in the past, the first four lessons are new. And in August, we'll be launching the ninth lesson. The last lesson on giving is new,

the Outrageous Generosity lesson. The Great Misunderstandings Now called Outrageous Generosity. And we previewed that to the coordinators on a stream last night on Facebook and live. We had about 100, 150 here in Franklin come and view it in person. And the new giving lesson, the new generosity lesson lights out amazing. And not because I taught it, but because the team put a great job building the content out.

I did an okay job teaching it. But you've got to see it. The content will make you cry. It will make you want to be generous, which is why we do all this, right? So if you've been through Financial Peace, you may want to come back, join the membership. You can do that as a rejoin real inexpensively, and you can go back through Legacy Journey. You can see all these streams. You get every dollar plus in there.

So you alumni, yeah, this is the Dave Ramsey Show. Hey, guys, this is Clay Thompson, senior executive producer of the Dave Ramsey Show. Did you know over 15 million people listen to the Dave Ramsey Show. Hey, guys, this is Clay Thompson, senior executive producer of the Dave Ramsey Show. Did you know over 15 million people listen to the Dave Ramsey Show every week? And a lot of those people listen to one of over 600 radio stations across the country. To find a station near you, head to DaveRamsey.com slash show.