The Ramsey Show - App - Be Properly Prepared to Pay Off Debt (Hour 1)

Episode Date: July 12, 2019

Take control of your money once and for all. The Dave Ramsey Show offers up straight talk on life and money. Millions listen in as callers from all walks of life learn how to get out of debt and start building for the future. Check out the fifth most downloaded podcast of 2018!   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE     Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is The Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Chris Hogan, sitting in for Dave, and we're excited to take your questions, America. I know you have something on your mind, something money-related, and you want some guidance, or you want to understand something a little bit better. Well, guess what? We're here for you. All you have to do is give us a call.

The number to call is 888-825-5225. Again, that's 888-825-5225. Or you can find us on social media at Ramsey Show and feel free to send us a question that way. I always get excited to be able to come to you and hang out and really dig in and talk about this money stuff. There are so many myths out there, so many things that are going around that people don't understand exactly what's real and what's not. And I think the more clarity we have, the more we can start to really dig in and really

start to make some traction. For example, I got a question in on social media. This was from Deanna, and she asked, is it better to rent a home versus owning a home financially? I'm 23 and single. Okay, this is a great question, because oftentimes I hear people say, Chris, okay, I definitely know it's better to be able to buy a home and own a home. Well, in reality, it's all about if you're prepared for it. Listen, the last thing you want to do is dig in and to go buy a home and not be prepared.

I've talked to so many people that were frustrated and irritated because they either bought too much home or they weren't prepared financially. So that's why we say, listen, before you do this, you want to make sure you're following a plan. So Deanna, I want you to understand renting is not a negative thing. Renting allows you to be able to save up money so you can buy a home the right way. The last thing you want to do is to jump out and hurry up and buy a home before you're properly prepared. So let's talk about it, America. What does properly prepared to buy a home mean? Well, it means you first and foremost, you've gotten yourself out of debt. Now, this is best case scenario.

This is what I want you to focus on. That means you're attacking your debt, the credit card debt, the car loan debt, even the student loan debt, right? I'd love for you to attack all of that using what we call the debt snowball. List your debts out smallest to biggest. Make minimum payments on everything else while you throw everything but the kitchen sink at that small debt. Because getting out of debt is about momentum. And when you start to build momentum, you start to gain confidence.

And confident people make things happen. So I want you to attack your debt. Then I want you to build up a fully funded emergency fund. This is where you have three to six months of expenses tucked aside in a money market account because we want to keep it liquid so you can get to it if life were to happen. Then and only then do I think you're prepared to start to save for a down payment on a home. We call that baby step three B. This is where you start to save for a down payment. Now, minimum, I want you to have 10% down on a home.

Best case scenario, I'd love for you to have 20% because the main thing is you want to go in and put money down so you can be in control. Now, this is the only debt that I'm okay with you taking on is a 15-year fixed rate mortgage. Now, hear me with that. I said a fixed rate mortgage. That means your payment is not going to change because you know exactly what you're dealing with. And as you budget, you can go from there. So that's kind of the process. And I know a lot of people out there, they feel the urge. I had one friend tell me

several years ago, Chris, my parents are telling me I'm throwing away money renting. And you know what? As a former banker, I used to tell people that same thing. It's not true. You're not throwing away money when you're getting prepared or you're getting yourself out of debt. So that's the reality. That's the truth. And, Deanna, thank you so much. And as a 23-year-old, as a millennial, you're ahead of the game by even asking this question. So thank you very, very much.

Okay, I'm getting to the phones. I've got Kevin on the line in Indianapolis. Kevin, how are you? Doing well. How are you? Oh, I'm focused and not finished, my friend. How can I help you today? So I have a relatively easy question.

Should I pull out? I got an inherited IRA from my grandma passing a few months back. Should I pull the money out of that in full to pay off my debt and baby step two. Okay. I'm already on baby step two. Okay. You're on baby step two. First and foremost, I'm sorry to hear about your grandmother passing.

Thank you. Yeah. How much were you left in this IRA? $20,000. $20,000. And talk to me. You say you're on baby step two. So, Kevin, I already know you're speaking the lingo.

You're attacking debt. So, how much debt do you have left? There's $7,000 student loan, $4,400 on an auto loan, $3,700 in credit card, and $600 for a personal loan. Okay. And so you... So if I take... Go ahead. Go ahead, my friend.

I was going to say, so if I take out the whole amount i'll have to pay the 22 tax on it and so i'll lose 4 400 and i'll have uh 15 600 and then i'll just that'll pay off all my debt except a hundred dollars yeah now that is fantastic and so how long ago did you decide to start to get serious about getting out of debt? I found you and Dave Ramsey about less than a month ago. And I already read the total money makeover. It took me about two days to read it. Oh, wow. So you dug in on this and got serious. Yeah, very serious, very fast.

Yeah, you really did. What caused that? What caused you to stumble upon our information? Just looking over the numbers and my credit card and seeing how much interest keeps coming or charged to the card every month. That's exactly right. How old are you, Kevin? 27.

You're 27 years old. What's your household income? About 65. Okay. So you, I mean, you are absolutely right. When you sit, you start looking at these credit card statements and you start to look at that debt and you go, I'm working so hard, but I'm working hard to bring money in to take care of debt. So money's going right back out. So Kevin, yes, I definitely would do that. Utilize that,

that gift, that inheritance that, that your grandmother left you and use that to clean up the debt, attack it, everything but a hundred dollars. And listen, my friend, as you pay off the student loan,

the credit card, and, and, and, and you close out that credit card. I want you to be focused on cash moving forward because as you take that stance, you've got an opportunity to really stay clear and understand as I go forward, I'm going to be very certain about my financial future. You see, Kevin,

what you did was make a decision. And it's amazing, America, when you start to look at those numbers and you start to do the math on it and you realize, hold on a minute, I got a whole lot of money leaving me. I got a whole lot of money that's going out and I'm working really hard. And you take that stand for yourself. That's when things start to change and you start to see things a little bit different. So, Kevin, thank you very, very much. And talk about being intentional. This young man dove in and read the total money makeover in two days, America.

That's somebody that's definitely focused and not finished. I got another social question in from Darren on Facebook, and he asks, What do I do when my contributions are the max the IRS allows to my retirement accounts, but I'm not at 15%? Should I stop investing and focus on baby steps five and six? Okay, this is a great question. Now, first and foremost, as we help people tell them to get out of debt, build up an emergency fund, and start to get serious about investing, 15% is the key. But listen, Darren, if you're not at the 15% and you're already at the max, bring your

401k, shift over to Roth IRA to complete the rest of the 15%. Thank you for that question. That's really important to know. You've got an opportunity. And 15%, people, that's the Mac. That's where you want to be at with investing because it still allows money in your budget to do the other things you need to do,

saving for college and attacking the house. This is The Dave Ramsey Show. We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million active members. I'm talking about people who come to LinkedIn to make connections, grow their careers, and discover new job opportunities. In fact, 90% of LinkedIn users are open to new opportunities,

but not actively scanning job boards. This means LinkedIn Jobs gives you access to an entirely different demographic. Don't wait. One hire can change the direction of your company. Post a job today at linkedin.com slash Ramsey and get $50 off your first job post. That's linkedin.com slash Ramsey. Terms and conditions apply. Hello America, this is the Dave Ramsey Show. I'm Chris Hogan filling in for Dave. And we're excited to be with you.

But I want to hear from you. I know you've got some money questions on your mind or something you want to discuss related to you pursuing your journey to becoming an everyday millionaire. Well, here's the deal. I want you to give us a call. If you've got a question or something on your mind, I want you to call us. The number to call is 888-825- 5225. Again, that's 888-825-

5225. Or you can find us on social media at Ramsey Show. Feel free to just send us a question in right there. We'd love to talk with you. Alright, I'm back on the phones here. I've got Cliff on the line from Houston, Texas. Cliff, how are you? Doing great. Chris, how are you doing? Oh, buddy, I'm focused and not finished.

How can I help you today? Chris, I just have a quick question for you. My wife and I are in baby steps four, five, and six together, kind of working that plan. Good. I've been with Edward Jones for a couple years now, and I've had a good buddy of mine court me to join Northwestern Mutual, and I've had some meetings with him, and pretty much at a point where we are ready to move forward with that. But they have two different type of advisory programs

and just kind of wanted to get y'all's opinion on that. Sure. Talk to me. What do they have? What are they talking to you about? I think there's one called an advisory program or just a brokerage account brokerage account being just like a set fee per year um i think it's 100 maybe 150 bucks a year something something similar to that and that's uh and that's their their one plan where kind of we were in control with with them and then they have another uh program where they charge a percentage of your portfolio

i believe it's a sliding scale depending on how much you have but uh just wanted to get i know dave recommends using it using a professional uh for your investing and what we're doing but just just want to get y'all's uh opinion on uh using using the fee-based type of a program or versus a percentage of your portfolio. And I'm just looking at long-term over, you know, plans to be a millionaire one day. So I didn't know if you guys recommended using that type of a fee structure all the way through. Very good, Cliff. Tell me this, my friend.

How old are you and your wife? I'm 38, and my wife is 30. Okay. And do you guys have kids? We do. We have two kids. Okay. And do you guys have kids? We do. We have two kids. Two young kids. How old are they?

One is about to turn three next month, our daughter. And we have a son that is going to turn two in December. Okay. And you all's household income is about how much? It's sliding i'm on a i'm on a uh a salary plus commission uh but anywhere from 150 to 170 okay all right and so who you've been working up till now what you've been working with have you been pleased with the results are you why are you looking for a change um my advisor from uh my advisor from ever jones actually left, and this other guy, I went to high school with him.

He's been kind of slowly but patiently kind of waiting on me to make a move, and like I said, been courting me. So anyway, so far we've had some great discussions. We've been very open to him about our beliefs, which is the same as you guys' beliefs about not getting into whole life. In the very beginning, he was pushing whole life a lot and other types of stuff. And we told him that we're doing y'all's plan, and he's pretty much backed off. But now we're having to make this decision here in the next couple of weeks

on what program to go to. We've already got all of our funds moved over from Ever Jones to them, and now we just need to weeks on what program to go to. We've already got all our funds moved over from Ever Jones to them, and now we just need to decide on what program to go with. Gotcha. And what's your net worth right now? Just over $200. Okay. Okay.

So you guys are focused. You understand the direction you're going. I'm going to tell you, I like the idea of the professionally managed side as well. Being able to look at this and someone to be able to help guide me to get to my goals. And I think it's important to have, you know, Cliff, it's amazing to me that when like if we have car issues, like we'll go to a mechanic. If we have teeth issues, we'll go see a dentist. But on the financial side, too many people are resistant or reluctant to have a conversation

with a professional to be able to guide you. And so to me, it's less about where they work. It's more about the individual that I'm dealing with. And there are pros and cons on this side. So I like you going. I'm going to suggest you go the route of the professionally managed. This is one of those things where you and your wife going in together, you're aware you can stay connected and you've got somebody that's kind of in the, in this with you to be able to walk with you.

That's what we do. And that's why we recommend our smart investor pros. But the main thing to me is, is that you said this as a friend and I really want to caution you on this to just look and have your eyes wide open that as you guys are sitting down, you and your wife, and you're talking about your, your nest egg and what you're down your dreams, that we need to be really aware that someone's going to take this as serious as you are. And oftentimes with friends, if you've ever done business with friends, it can get weird at times. And it can't be weird because this is your financial future. As you said, you've got a three-year-old little girl and a two-year-old little boy.

You're serious about the things you're wanting to accomplish. And so I just want to caution you to make sure that this individual that you're dealing with, A, is qualified to help you get to where you're wanting to go. And is it going to be weird working with a friend in this direction? Now, I'm only cautioning you with this because it depends on your all's level of friendship. If you guys can do this and you're dealing with two mature people, it's not an issue because it's business. And at some point, you may decide that you need to move from this individual to someone else. And as long as nobody's getting their feelings hurt and there's not an issue,

then I think it's okay. But if you think this person is going to get bent out of shape or there's going to be an issue later, then I would caution you to not do that because I don't want your friendship to be at risk because of your financial future, because this is a big deal for you and your family. And so walking through it, I want to know how are they going to work with me? How do I get to access them? If I have a question, how many times are we going to meet? And I like the idea of meeting quarterly to have a conversation, to review things and to be able to walk through and understand, hey, are we on track or are we off track? So I like this mindset and this awareness. And America, if you're out there and you're going, wow, Hogan, I need somebody like that. Well, listen, I want you to

go to Dave Ramsey dot com and look for a smart investor. These are pros that are all around the country that that we know they're going to treat you the right way. We know that they're not looking to sell you anything. They're looking to help you get to where it is you want to go. So I definitely strongly encourage you, if you've not had a review of your 401k or just looking at your overall investing strategy, that this is definitely a connection point you want to make

and you need to make and you need to make. Okay, I'm back on the phone. So I've got Blake on the line in Atlanta. Blake, how are you? I'm doing well. Thanks for asking, Chris. How are you doing? I'm focused and not finished, my friend. How can I help you? Yeah, so my wife and I want to purchase a home in the next two to three years or so. And we wanted to know if it's okay if we stop contributing to our Roth IRAs for the next two to three years or so. And we wanted to know if it's okay if we stop contributing to our Roth IRAs for the next two to three years to save up money for a bigger down payment so that we can get the 20% down and not have to pay PMI. Okay. So talk to me, Blake. Tell me, where are you all?

What baby step are you on right now? We have a fully funded emergency fund and we've been contributing 15% to retirement. Okay, very good. And did you guys go with a three-month emergency fund or a six-month? It's probably about four to five months. Okay, all right. So, yeah, you've got money there. You guys are investing.

And so have you saved anything toward the home down payment as of yet? Currently, we have a little over $2,000, and then we have about $12,000 in our checking account right now as well. Okay. So looking at this as you guys are budgeting, here's my deal, Blake. How old are you and your wife? We're both 25. Okay. 25 years old. Where did you guys learn about money?

I started listening to Dave Ramsey when I was in college about five years ago. That's fantastic. And not only did you listen, you started to apply. But I would say this, Blake, I want you guys to be able to save for the down payment. I like that focus. I even like the goal of you guys trying to get a 20 percent. So you're not messing around with PMI. But here's what I don't want you to do. I don't want you to stop investing. See, you guys are 25 years old. You're putting yourself on a path to become everyday millionaires. What you need to do is to be very intentional about the amount of home that you buy, that you're really clear on that dollar amount. But I want you guys

to tighten your budget. Look for other ways to be able to save up for that down payment. And yeah, it might take a little bit longer, but I'm going to tell you this. You're going to keep your money growing. You're going to stay focused. You're going to continue to see compound interest work for you. And as you guys continue to chase down that dream, I know you can do it. I know you can do both at the same time. Because you're focused, my friend, because you're not finished either this is the

Dave Ramsey show One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way.

Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in for Dave. And we're taking your questions. I know you've got something on your mind that you want some clarity, just to shed a little bit more light on. Or maybe you've got one question that's going to help you to go faster, because I know it can. When we get the right information in the hands of the right people, great things can happen. So that number to call if you have a question is 888-825-5225.

Again, that's 888-825-5225. Again, that's 888-825-5225. Or you can find us on social at Ramsey show. But I want to let you know people, people all the time ask me, they say, Chris, I, I love hearing you. I enjoy hearing you. And I said, well, listen, I have a show. The Chris Hogan show is available on YouTube, Apple podcasts,, Google Podcasts, as well as Sirius XM. And I have a lot of fun.

I take callers on the show. I'm giving people information. I rip articles from the headlines and kind of give guidance and do rants on those. But I wanted to let you know, three of the recent podcast episodes that I have are, on the 10th I I released how to juggle multiple financial decisions. You know, oftentimes you can, you're trying to make decisions on what do I do and how do I go about this? So I talk about it. Then there's also why money gives you more options.

I've got an episode that kind of walks through that understanding of options and how we can put ourselves in a better position. And also the third episode that's up, a new one, it's never too late to get started on your financial journey. You see, I firmly believe that we get to make decisions for ourselves. We get to decide what we want and how we're going to go about it. And so I want to encourage you, if you've not been to my website, go to ChrisHogan360.com. You can find out more about the Chris Hogan Show. Also, I've got a couple free tools over at my website that can really help you on your way, especially as it deals with retirement, with the RIQ, the Retire Inspired Quotient.

It helps people understand how much do I need and what do I do. Then I also have a free investing guide that can really help you to understand how do you become an everyday millionaire? Well, you've got to invest your money the right way. So that's a free PDF that's available as well. Again, ChrisHogan360.com. It'll get you to those and you'll have an opportunity to really dig in. And don't hesitate to share that information. I think as we share information with our family and friends, it's a good thing because it helps us start to really apply the information that we're learning.

And it helps us to make a difference. All right, I'm back to the phones. I've got Benjamin out in Salt Lake City. Benjamin, how are you? start to really apply the information that we're learning, and it helps us to make a difference. All right, I'm back to the phones. I've got Benjamin out in Salt Lake City. Benjamin, how are you? I'm doing good, Chris. How are you? Oh, I'm doing well, my friend. How can I help you today? Well, to be honest, so you can understand my situation, it's mostly a lack of experience. I'm 21 years old. I got married this last year, and me and my wife have a honeymoon baby on the way, and I have a really intense desire to provide for my family the right way, the secure way, and I don't have any excuses. I just need to be honest with myself, and I'm in more of a pickle than I'd like to be. But I kind of need your advice as far as even accomplishing baby step one, which is, I believe, get out of debt.

Is that correct? No, sir. Actually, Benjamin, baby step one is just getting $1,000 saved up. Okay, I have that. Okay, you have that. So great. So you are on baby step two, which is attacking debt now. Okay. Yeah. And this is where I'm calling you from is I was like, have that so great so you are on baby step two which is attacking debt now okay yeah and this

is where i'm calling you from is i was like oh we only have three thousand dollars in credit debt um two thousand to my wife's um loan or student loans and a thousand dollars in my credit debt which is worse but um uh i was honest with myself and i was thinking in in all honesty, debt-free means debt-free. And I have a, well, I got a $30,000 loan on a 2018 Dodge Journey. And I rolled, and the reason it was $35,000 is I rolled $10,000 into it. And all in all, it saved me 200 bucks a month worth of gas that my big old truck cost me. But I'm now, what, $25,000 more in debt. Right. And to be honest, I don't have any excuses that way, but it is the biggest financial

depravity we have in our lives. And to be honest, I don't even know where to start about fixing it as far as getting into a different vehicle or any strategies or just to get out of debt, if that makes sense. Okay, no, it absolutely makes sense, Benjamin. How much is the payment on this truck? It's $500. It's the Dodge Journey I traded in the truck. Okay.

It's put $10,000 negative equity on top of the car. Okay. And so it's $500 a month. Okay, all right. And so you're looking at this and you're acknowledging, you know what, you're looking backwards and you're kind of beating yourself up. Okay. And I want you to stop because what you've done right now is you've looked at it and you realize, hey, I made some mistakes. Now I'm going to fix this thing.

And I think I know you can. So tell me a few details. Outside of the $2,000 student loan, $1,000 in credit card debt, and this Dodge journey, do you all owe on anything else? I owe nothing except for that we are having a baby this December. And so that will definitely go into stuff. But we have insurance, and it's going good that way. Okay, very good. Well, congrats on getting married, and congrats on the baby coming. Yes, it's going to change your world a lot, a whole lot, but in a good way.

So how old are you, my friend? You're 21. How old is your wife? 21. She's 20. She's 20. And what's your household income? So it's $2,300 after all of the taxes, and I think it was like $3,700 before taxes.

Okay. All right. And are both of you working outside of the home? We are both working outside of the home, but she will not be working. I think she brings in like $200 a month maybe with what she does right now. Yeah. And that's not the money I just told you about. That's not including her.

Okay. All right. Very good. So this Dodge Journey, what do you think this thing is worth right now? So my S-Tilt was bought with 18 miles on it. Worst bill you could find. We got it. Let's see.

It has 13,000 miles on it now. I honestly, your best guess would be better than mine. OK, well, I tell you what we can do is we don't even have to guess. I want you to go to KBB dot com, Kelly Blue Book dot com and to start to look and to get a feel for it. Now, here's here's where where things get come in, Benjamin. All right. Number one, you guys are going to have to make a decision that you're serious about cleaning this up. All right?

And getting out of debt means I'm attacking smallest to biggest. So you're going to be doing the research on this and doing some legwork, but you guys are still staying focused on attacking the $1,000 in credit card and the $2,000 in student loan. Okay? So we're going to smallest to biggest, but I want you to go to kellybluebook.com. Find out what this car is worth, resale value. And then I want you to reach out to the loan company you have it with.

Find out a 30 day payoff on this vehicle. Now doesn't mean you're going to pay it off in 30 days. It's just going to allow you to understand this is what you got to pay to walk away from this loan. And the reality is, is once you understand what it's worth, and then you look at what you owe, okay, now we got to figure out what can you get it sold for. Now, the mindset in looking at this, it starts to help you understand mathematically what's going to have to happen. Oftentimes, you're not able because you rolled over a truck payment inside of this thing. And so you may not be able to get what it's worth. And so from there, understanding that mindset, it helps you to understand that we are going to have to come up with X amount of dollars to be able to help us get out of this.

Now, that means what you can sell it for versus this amount that you save. Or I've even had people go talk with a credit union to get a very short-term loan to allow you to get out from under this $500 payment. Okay, so again, short-term. I'd much rather you look and understand kind of the math first and foremost so you and your wife can decide the direction you're going to go as you get ready to attack this. Now, but I like the spirit. I like that you're looking at this and you understand that, hey, I'm going to clean this stuff up, right? I've got a baby coming. I'm just married.

You've had a lot of changes, but I'm going to tell you this. The change you're talking about making right now by getting out of debt, that has a legacy effect. That's got a ripple effect, my friend, and I just want you to really keep that in your forefront. Start to talk with your wife about the dreams you guys have, not only for yourself, but for this little one that's on the way. And then you'll start to just start to believe because you all have an opportunity without a shadow of a doubt to get this debt cleaned up and paid off and out of your life.

And the child will never know about it. They'll never know what mom and dad did to make the sacrifice to make that happen. So you and your wife stay focused. I'm going to send you the Total Money Makeover, Dave's best-selling book, so you guys can see how other young people have done it because it's possible, my friend. It is possible. This is The Dave Ramsey Show. We'll be right back. Hello, America. You are listening to The Dave Ramsey Show.

I'm Chris Hogan, filling in for Dave. And if you've got a question, I want to hear from you. I want you to call me. The number to call is 888-825-5225. Again, that's 888-825-5225. Again, that's 888-825-5225. Or find us on social at Ramsey Show. You can also find me on social media along with all the other Ramsey personalities. I'm at ChrisHogan360.

And we have an opportunity. I tell you, there's a whole gang of us here. I've got Rachel Cruz. She's got the Rachel Cruz Show. You can find out more about it by going to rachelcruz.com. And we've got Anthony O'Neill, who's encouraging young teens and adults to make good financial decisions. His website is anthonyoneill.com. And of course, we have the Entree Leadership Podcast, which is helping to build leaders all around the country.

You can learn more about them by going to EntreeLeadership.com. And then Christy Wright, who's helping women in business, you can go to BusinessBoutique.com for that. And then we also have Ken Coleman, who's helping people with their careers. And you can find him at KenColemanShow.com. So we're all here trying to help people in all facets of life and to really, really dig in and to try to help people make progress. It's so important. And we all need encouragement and we need the right information. And again, I know we can do it. So I'm getting back to the phone. I've got Agnes on the line in New York City.

Agnes, how are you? Hi. Good. Thank you. Thank you for taking my call. Oh, you're very welcome. How can I help you today? So I'm calling regarding my parents. They're immigrants. They're in the U.S. for about 15 years, and they're 65 years old. They're hardworking people. They don't have any debt, but they don't own a home, and they have very little savings. So I'm trying to advise them on saving up a little bit for retirement,

but I'm having a hard time, and I could use some help with that. Okay. All right. So your parents are 65 years old. Agnes, how old are you? I'm 30. You are 30. And when you talk to your parents about this, are they receptive to it, or do they resist?

They don't resist, but I think they're a little bit scared to invest and they have sort of little hope that they can make this happen. Right, right. So they're scared of investing. And I think one of the big things to do is, as you have these conversations with them, is to encourage them. Fear is a real thing. But what I have found, Agnes, is that we tend to fear things we don't understand.

And if they don't have an understanding of it, then, yeah, it's natural for them to be fearful. So all that to say is you may not be able to accomplish this all on your own. You may need to get them in with a smart investor pro or an investment professional, has the heart of a teacher, someone that's truly trying to help to kind of help guide them as well. Yes, I've tried mentioning to go to a smart investor pro, but I think their main fear is that they, as you said, they don't understand investing and they think that it involves a major risk. And the little that they have, they're holding on to it, but in't understand investing, and they think that it involves a major risk. And the little that they have, they're holding on to it.

But in a savings account, it's not doing much. Okay. All right. So how much do they have in the savings account? I wish I knew. Okay. That's okay. I would say between $50,000 and $100,000, but I'm not sure.

Now, and you and I know that money's sitting in a savings account. That money's sleeping. Okay? It's not working for him. And what I would do is tell them this. Ask them if they remember what the price of gas or food was about five or 10 years ago. Right. And we all know the cost of things, Agnes, have gone up, haven't they?

Right. Because that's called inflation. And so if they don't grow their money, they're not going to be able to keep up with inflation. So we want money to grow, not just hang out. So what I would do is just, again, have another conversation. And I'm proud of you, Agnes, first and foremost, for talking with them about this and helping them start to see that the stock market is truly a lot like a supermarket. Okay. Now, listen, there are things that you can buy in the supermarket that are good for you. There are things you can buy in the supermarket that are bad for you. The same is true with the stock market.

There are things that you can invest in that are good for your financial future. There are things that you can invest in that are risky for your financial future. The main thing is, is we have to put it in things we understand and allow the money to be able to grow. So, Agnes, here's what I'm going to do. I'm going to send you my book, Retire Inspired, because I called it America's wake-up call on retirement. Too many people are thinking Social Security is just going to save the day. But I'm also going to send you Dave's Total Money Makeover, his best-selling book, because it's got stories of people in there that were also like your parents that were resistant and reluctant. But once they started to understand things, they were able to

move forward with confidence. So I want you to keep having those conversations with your parents, but I want you to also connect them, get them to go see a smart investor pro, and you may need to go with them. You may need to go sit in on that meeting with them. And they, if they don't want you in the meeting, you can wait in the waiting room, but we've got to break them past that, that hump. We've got to get them to have in that conversation because what we don't want to do is waste time. Time is precious when we're talking about growing money. So Agnes, I'm going to keep praying for you. I want you to continue to have those conversations with them, encourage them. Okay. Encourage them. And when people that are fearful, when they have people that are around them that believe

in them, that guide them, but you tell them, Hey, mom and dad, I want you to be able to live your retirement dreams. And we've got to get this money working for you and just keep having those conversations. And I'm telling you, it'll pay off and you get them moving in the right direction, but don't get frustrated with them. And just always remember, you're always going to be their daughter. And so you've got to kind of find what works for them and kind of go in that path to connect with them to get them to be willing to go have a conversation, because that's truly

all you're trying to do. Agnes, thank you so much for your call. And I wish you well as you continue to work with your parents. All right. Next up on the phone, I've got Elaine on the line. Elaine, how are you? I'm good. How are you, sir?

Oh, I'm doing fantastic. How can I help you today? So I have a question about 401Ks because I just changed jobs. All right. And my last job had an absolutely fabulous 401K. They matched 100% of your contributions up to 6%. Okay. And you were fully vested from day one.

Good. up to 6%. And you were fully vested from day one. At my new job, they only match half a percent of what you put in up to 3%. So if I put in 6%, they'll put in 3%. But the kicker is you're not fully vested for four years. And so is it worth investing in the 401k if I'm not sure if i'm going to be at the company for the full four years to get that vested balance okay so let's let's let's agree on this elaine let's first and foremost the other job that you were on obviously their 401k structure was a lot better right okay that's good so when you you've already left that job so we want to make sure we do something with that money first which is roll it over into an IRA. All right?

Yeah. Okay, we've got to get that done. So that money follows you and allows you some options. This next job that you're on, how long do you see yourself there? I'm hoping I'll be there at least four years, but I'm in health care. And from what I've seen myself and my friends do is most people stay at a company for about two years before they move on. But here's the deal. I don't think what you want to do, the mindset is, is that you're focused on growing money. So you're allowing compound interest to work for you.

So are you out of debt? I have about $5,000 in debt that should be paid off by the end of the year. Okay. What kind of debt is that, Elaine? A thousand of it is a credit card and 4,000 of it is a car loan. Okay. So you familiar with the baby steps? Yeah, I just started.

Okay. I'm proud of you. Beginning of this month. Yeah. Okay. Well, I'm proud of you. So here's what you would do. So you're right now, are you eligible for the new 401k at the new job?

Yes. Okay. I don't want you to do it yet. Okay. Because what I want you to do is to attack this $5,000 in debt first. Okay? Okay. And then I want you, after you get that $5,000 taken care of, I want you to build up a cushion,

an emergency fund of three to six months of expenses, and you're going to allow that just to sit in a money market account. That's cushioned between you and life happening, Elaine. And then once you have that in place, then yes, I want you to start investing in the 401k. Okay. Okay. And I'm proud. Hey, how did you, you just said you started at the beginning of the month.

How did you hear about us? Oh, I've been listening to Dave forever. It was more of the, I was trying to get my spouse on board. Oh. And so it took a little bit to get him on board with this plan. Hey, how did you do it? What was the thing that got him on the plan? We had a night where he had come from a conversation with his dad

where his dad berated him for not contributing to his 401k. Uh-huh. And he was like, I make make money but i have no idea where it goes and i was like well let's sit down let's make a budget let's see how much debt we have and let's get it started the baby steps fantastic and kind of sat down and explained it to him that way he's like oh okay and so we sat down and did the first bit of july yeah that That's fantastic. Well, thank you. I'm proud of you for getting your husband on board. I want to thank James Childs, our producer,

associate producer Kelly Daniel, and of course you, America. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.