The Ramsey Show - App - Become the CEO of Your Financial Future (Hour 1)

Episode Date: February 21, 2020

Chris Hogan, Debt, Retirement, Home Buying, Budgeting 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, filling in for Dave, and I'm excited to be here with you. And we are excited to talk with you and to take your calls. So here's the deal. If you're out there and I know you've been thinking about a money question or looking for some guidance to be able to chase down progress, we're here for you. Now, here's what you do. You just pick up the phone and give us a call. The number to call

is 888-825-5225. Again, that's 888-825-5225 and call and let us know. Now, you can also find us on social media at Ramsey Show or you can hunt me down at Chris Hogan 360. Either way, we want to hear from you. And I also want to give a shout out to the YouTube audience that's watching the Dave Ramsey Show. They are always exciting and great comments. If you haven't plugged in over there, get over there and check it out. It's a great, great group. We're excited to take your calls today and dig in and to be able to make progress. That's what I want people to know. We have an opportunity to grow forward.

What we have to do is gain information and then take the right action. That's the deal. And I know none of us are where we want to be, right? And it's easy to glance back, but I want us to focus forward. Progress is available to anyone that's willing to give the effort and to make the sacrifices. So let's get to the phone lines here. I've got, looks like I've got Luke on the line in New York. Luke, how are you? Good. How are you? Oh, I'm focused and not finished, my friend. How can I help you? Hi. So I just graduated college and I have about $10,000 in student loan debt.

Okay. And I recently inherited a $40,000 brokerage account with various stocks in it. Okay. And I'm wondering if I should send you some of the securities in the brokerage account to pay off the student loans or use my income to pay off the student loans. Okay, Luke. I like you. How old are you? I'm 21. 21 years old, and you only have $10,000 in student loans, you say? Yeah, yeah.

I went to the school that was the cheapest. It happened to be an out-of-state school, which I know people don't encourage, but I got a scholarship, so I was able to go there. Very good. Keep your mouth up by the receiver, if you don't mind. So, do you have any other debt outside of that student loan debt? No. Okay. Proud of you. And so you look at this, and who did you inherit this brokerage account from? It was a trust that my grandparents set up. Okay. All right. So they obviously was very intentional for you

and leaving you this money. What is your income right now? $83,000 a year. $83,000. Wow. What industry are you in? I'm in the reinsurance industry. Okay. I'm an actuarial associate.

All right. So looking at this, I think you have an incredible opportunity with this inheritance that was left to you, Luke, to really start off on the right track. Are you familiar at all with the baby steps? Yeah, I am. Okay, all right. And so you've heard it. Where did you hear about them from?

Did your parents teach you, or did you learn about it in school? Actually, I started watching the Dave Ramsey show during my last semester in college. Okay, wow. So you've been plugged in. So you've listened to the show. What am I going to tell you? What advice am I going to give you? You know, the debt snowball.

Get out of debt if it's possible. You better believe it. Hey, listen to me, Luke. Debt is a threat, okay? It steals from you right now, but also your future. You've got a great opportunity to sit down with one of our tax EOPs, and I want you to walk through this so you can understand what's going to happen. As you cash out that brokerage account, you're going to incur some income that's coming into you. So you want to

be aware of how it's going to impact you on the tax side of things. But here's the beautiful thing. You've got an opportunity to skip forward in the process. You can not only attack that student loan debt and tell it to get out of your life, but you can also build up a six-month emergency fund and be intentional now and then start maybe step four, which is investing 15%. At 21 years old, my friend, I have no doubt that you're gonna be an everyday millionaire,

but I want you to remain allergic to debt, Luke. That means anything you do, I want you to do with cash. I want you to save up for a car. Again, if you've got a car already, I want you to set aside money each month for a replacement of that car. If you remain allergic to debt, there's no doubt in my mind, by 35, you can be an everyday millionaire. And I want to tell you that again because you've probably never heard that. You've probably never been told that you can do this. But I firmly believe in you, and I know that you can. So thank you for your call. Definitely attack that student loan

and get that stuff out of your life. That's fantastic. All right, I'm going back to the phones. Next up, I've got Morgan on the line. Morgan, how can I help you? Hi, I'm doing great. How are you? I am focused and not finished. You sound peppy today. I'm super excited to talk to you. Well, that's fantastic. How can I help you? So I have the opportunity to refinance my mortgage from a 30-year fix at a 4.625% to a 15-year fix at 2.875%. So it's a big rate reduction. However, we haven't been in the home very long and we didn't put much down because I didn't find Dave Ramsey until after we bought the house. But it might require us to pause the debt snowball for two months in order to cash flow the closing costs just in case the home doesn't

appraise where we need it to. Now, we think it will, but there is that chance. Okay. Now, tell me this. I didn't know if we should, yeah. Go ahead. How much did you purchase this home for? So, we purchased it for $180,000. Okay. And what was the value when you bought it? It was right at $180,000. It was right at $180,000. And you all have been in there how long? We've been in here a year and a half. Okay. All right. And so you think the value is what now? So we would need it to appraise at about 185. And I think there's a really good chance it will be there. But there is a chance it won't, just depending upon how homes have sold lately. Okay. All right. And you're right, as you look at that. I wanted to make sure that the numbers were making sense, you know, because people tend to think, Morgan,

that their home will appreciate like $30,000 in three minutes. And it's just not reality, right? And so you look at this, and so you're on baby step two. How much debt do you guys have right now? We have about $40,000 left. Okay.

And what is that? Break that down for me. Yep. So we've got $29,000 in student loans and $11,000 in a credit card. Okay. Okay, $11,000. And your payment would go from what to what? From the $30,000 to the $15,000?

It would increase by about $300 a month. Okay. And so you're saying you'd have to pause your debt snowball for about two months to make this happen? Potentially. So we would need to see what it appraises for and then figure out how much we need to bring in closing costs. Okay, great. So more than a two-month pause. All right.

And the cost of the appraisal is how much the bank told you? $450. Okay. All right. So you're looking at this, and I like where you all are, where your head is. And the reason is, is A, you're going from a 30-year mortgage to a 15-year, but you're also dropping your rate from 4.6 to essentially 2.8. So whenever you can get that 1% difference, right, and as far as your rate, that's a smart

move. So I like this idea. I like the idea of you cutting off 15 years of your mortgage, number one. Let's be honest. That's 15 years of that out of your life. So that's a positive. And your payment's going to go up 300, but you're saving 15 years. I like this plan, Morgan, and I want you guys to be intentional.

Let's get this appraisal and find out what the deal is, right? Talk to a real estate ELP if you haven't. Go to ChrisHogan360.com. Click on Dream Team. You can find one near you. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable affordable biblical solution to your health care costs?

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chministries.org. Hello, everyone. You are listening and watching The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave. And we love social media around here. And if you're not connected with us, I want to encourage you to. You can connect with The Dave Ramsey Show at Ramsey Show on all the social media platforms. And you can connect with me at ChrisHogan360.

But speaking of social media, I got a question in. This is from Brandy on Twitter. She says, my husband and I rent and want to do 100% down on a home one day. It would mean we would have to rent for another three to four years, and we've already rented for over 10 years. Is this too long, or should we go ahead and get a mortgage? Well, Brandy, I like that you guys have been intentional enough to save for this period of time. And I'm going to tell you, nothing makes me happier than the idea of doing 100% down.

Okay? Now, hold on, because people out there hear 100%, and they think, oh, 100% financing. No, no, no. No, no, no. 100% down. Okay. Now hold on. Cause people out there here a hundred percent and they think, Oh, a hundred percent financing. No, no, no, no, no, no, no. A hundred percent down. That means no mortgage ever exists. So if you all can achieve that goal in three to four more years, absolutely stay the path, stay the path and remain absolutely clear. Just be very intentional about what you all buy and be, keep your eyes wide open and make a smart choice. That's a good question. And proud. And renting, by the way, is not a sin. Renting allows you time to be able to save up money so you can buy a home the right way. So those of you listeners out there, I want you to be really intentional. Keep your eye on your prize, get focused, keep attacking the debt

and work in the process. The recipe works, my friends. Follow it to a T. All right, I'm going to get back to the phones. If you're out there and you've got a question, I want to hear from you. The number to call is 888-825-5225. Again, that's 888-825-5225. And call us. We'd love to be able to talk with you. Okay, I'm going to the phones. I've got Heather on the line. Heather, how are you? I'm fantastic. How are you? Oh, I'm focused and not finished. How can I help you today? I'm calling because my husband and I use the every dollar budget and found that we are every month $80 under. And he's been out of work for about eight months. And we decided that with my company,

I'm pretty steady. So we got one loan to start a business for him, which hasn't taken off yet, of course, because it's new. And then the other thing was that we took a consolidation loan. And when I found out that the interest rate was at 34%, I kind of stopped it and then called my 401k again. And I said, how can I, how can I get help? And they said, well, take a loan, take your second loan from your 401k, pay off the debt consolidation loan.

It's only a 5% loan through the 401k. And then take extra money so that you aren't in the red while you're waiting for your husband's business to catch up. But that put us at $80 short every month. And I'm still like, I've canceled all. I've canceled cable. The only thing I haven't canceled yet is our cell phones. And I'm about you know, about ready to do that too. But you know, it's scary. There's so much to do that. I just, we're stuck.

Well, you got a, you got a lot going on, Heather. And the first thing I want you to know is that I hear you. Okay. I hear you. And this is a frustrating time for several reasons. You've got some stress. You've got things happening. How much debt do you guys owe right now, all total? $43,000. Okay, and that $43,000, is that credit cards, student loans? It's student loans and the 401K loans. Okay, and how big is the 401K loan?

It was two of them together at $30,000. Okay. And how big is the 401k loan? It was two of them together at $30,000. Okay. So that total of $30,000 and then student loans at $13,000. Okay. Let's go back to another thing. You said your husband's been out of work for eight months. Yes. Why? He was trying to get back into the flooring business that he was doing and

it just wasn't picking up for him. And he's a really good chef. So we thought, Hey, let's, you know, let's do a catering business. So we started, um, we bought all the supplies with that first 401k loan. And, um, it just, you know, it takes time to build a business, which I understand. But in the meantime, we need to feed our kids. We've got two kids. Okay.

You have two kids. Yeah. What's the household income? What's your income right now? My income net is about 59. Okay. All right. Well, here's the reality.

You've got a couple things going on. You've got a budgeting type situation. More importantly, though, you got an appetite for debt. You can't borrow your way out of this stuff, and that's what you've been doing. You've been stealing from your future, taking from the 401k to try to clean up the mess now, and all it's doing is compounding. Your husband, in the idea of trying to start a business, I love entrepreneurs. I love business. I love people starting businesses. But here's the deal.

Right now, you guys have to feed a family. You have to take care of business. So he needs to go get a job, okay, not the job. I know he's preferring to be in the flooring industry, but he needs income coming in. As a man, that will change his spirit and his psyche to be able to have money coming in. Then he can start to work on the catering business on the side. So no more purchasing of equipment for the catering business. You could buy all kinds of things. And until you all are reaching out and you've got a need in the market or you've got people

that you can serve, what you have is a bunch of equipment that's sitting there for a large family cookout. Okay. And that's not what you're looking for. And so I want you to encourage him. Sit down. let's look at this. How do we get some money coming in here? And then the catering business is the thing on the side. That's the thing you're looking at. How do we go about this and how do you approach it? So I would encourage you as you're looking at your budget, you guys are probably still eating out and doing some other things.

The $80 you can, you can fix that, right? But the mindset is there's more money needs to come in, and that's the reality. And hopefully you can sit down with him and you guys can talk about that. And yes, he can still look to get into the flooring industry and the catering thing, but he needs a daytime job right now, and that's the reality. I need you to talk with him about it and care enough to tell him that so you can get some of the stress and pressure off of you. Right now, you're shouldering it all.

And this is not the time to try to start a business. You've got to feed your family. Then you look, how do we do this on the side and be able to grow it? And I've got several friends that are in the catering industry, and it is busy, and it's tough, and it's feast or famine. And so it's the mindset of where is business coming from? Where are the opportunities? And so have that conversation. You all look at it. You need to gain agreement on what's being spent. No eating out. I mean, you're going to have some creative

meals, trust me, lima beans and ramen noodles and all this other stuff, but we got to get down to bare basics. And we talk about that as the four walls, your housing, your transportation, clothing, right? Housing, transportation, clothing, and then food. And so food doesn't mean eating out. And I promise you, if you guys will tighten down, that's important. And these 401k loans concern me, Heather, for the simple fact of if you were to lose or leave that job, those can become due and payable very quickly, typically within 60 to 90 days. So that thing needs to get attacked so you can give yourself a raise because that's the best way to give yourself a raise is to get yourself out of debt. That's the truth.

I'm telling you. Okay, I'm going to go back to social. We had fun with that last one. This one is from Instagram. Melissa says, my husband and I live in California. He's in PA school right now, but we are considering moving to another state when he's out to get a lower cost of living. Are we crazy, or is this something that I would recommend? So, okay, so moving to another state for a cheaper cost of living.

Listen, I like the mindset of thinking about expenses, but there's a few things to consider with this. What's the job market, and how long are you planning to be in this area you're moving to? For example, you can run the numbers, but is this a place you all want to be? Do you have family and friends there, or is this a place you all can call home? So that's going to be really important. The other thing to consider is the cost of the move. Whenever you're moving, I mean, that can be a pretty serious expense. So I would ask you guys to do some research to really look at this and understand what jobs are lined up to be able to get there. And so you hit the ground, and you're able to start making some progress right off the bat.

As you move to a new area, I recommend people to rent for six months to a year. You need to learn the lay of the land and find out what side of town do we want to be in and the schools and things of that nature. So keep doing your homework, go into it with your eyes wide open, and let's make a wise decision. This is The Dave Ramsey Show. We'll be right back. Hello, everyone. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave. And we were just talking with George on the YouTube channel. We were talking about my show, The Chris Hogan Show, and he was asking me how it's a little different.

And on my show, I do some different segments. I do a Did You Know where I try to give a stat or something that maybe people didn't know or something from my book, Everyday Millionaires. But I also do a Panic to Pump segment where people who are feeling panicked about something have an opportunity to be able to reach out and we can talk about it and I kind of coach them right where they are. Or maybe they're pumped because they're celebrating something and they need somebody to be able to high five or talk to. And that's always a lot of fun. You can follow my show.

It's on YouTube as well, so you can actually watch me and my different hairstyles and the different facial expressions that I make. But you can also find it on Apple Podcasts, Google Podcasts, as well as SiriusXM. But I also do a segment on there where I talk about articles. And I love it because my VIPs, those are the listeners, they love to find articles to send me to get me riled up, right? And so they'll send things in because they either want to hear me rant on something or talk about it. But I ran across an article that some people sent, and I wanted to talk with you about it. This is from Motley Fool. The title of this is Five Ways to Avoid Financial Disaster.

Well, you can imagine. This grabbed my attention. I was like, well, I want to see what these people have to say. And looking at this, Motley Fool doesn't always align with what we talk about. Not always. But every once in a while, they get something right. And this one is really good advice. Watch.

You're going to start to hear a theme. Managing money is all about common sense. But as you and I know, common sense isn't always common. Right? There are some crazy people out there. But how do you five ways to avoid financial disaster? Number one, the article gives these five. Have an emergency fund. Hmm. Two, be insured. Make sure you have coverage on yourself. Three, get out of debt. Obviously, you and I know debt's a thief. It steals from you. Four, live below your means. That's pretty

straightforward. Five, save and invest for retirement. Now, I read these and I go, boy, they sound eerily familiar. Almost sounds like it's us giving this advice. I don't know. Pretty sure they're listening because the advice we give people, it actually works. So I like this idea, five ways to avoid a financial disaster. I couldn't agree more. An emergency fund is a cushion between you and life happening. It's imperative to have. So once you have that $1,000 starter emergency fund, and you then get yourself out of debt, you want to build up a fully funded emergency fund of three to six months of expenses. Now that's the key. You want to have that just sitting in a money market account,

and it's liquid for you to be able to get to. But living below your means. This is a typical mindset where we have to understand regardless of what you make, you want your lifestyle to be a step below that. Where you don't want to have to depend on a paycheck. And unfortunately, as you all know, 80% of people are living paycheck to paycheck. Let me break that down for you. That's like eight out of 10. So what you think of 10 of your friends, according to this statistic, eight of the 10 of them are living paycheck to paycheck. And if you want to bring it closer to home, think of your family members. And then it gets serious and you start to realize this is something that's real. And so I want to encourage all of you out there that are listening to continue to be intentional as you walk through these baby steps. This is a process that works and has changed millions of lives, and it has an opportunity to change yours as well. And some of you are already in the process and you're pushing. That's great.

How can you go faster? What can you do to continue to chase down progress? That's where you have to think different. All right, we're going back to the phones. If you've got a question, I'd love to hear from you. The number to call is 888-825-5225. Again, that's 888-825-5225. Would love to hear from you.

All right, I'm going to the phone lines now. I've got Martha on the line. Martha, how are you? Great. Thank you for taking my call. I appreciate it. Yes, ma'am. How can I help you?

Okay, I have a question for you. My husband is looking to retire within the next year. He'll be 55 next year, so he's looking to retire, and then he would opt in for me to get a surviving spouse if and event he passes, and I'll continue the payments until I die. So now the question is, we are really torn between taking the lump sum or going with pension benefits. Okay. Did they tell you a dollar amount on the pension? Yes.

It would be about roughly $5,700 a month. Okay. Payments. Did they tell you a dollar amount on the pension? Yes. It would be about roughly $5,700 a month. Okay. And so are you familiar, Martha, with the baby steps? Yes. Okay. Well, I hear a lot about it. Okay. What debt do you have right now?

We own everything pretty much free and clear. The only thing we have right now is a car payment. Okay. And how much do you own that car? Uh, $10,000. Okay. All right. And what's your income right now?

Right now between both of us? Yes. A hundred and 170. Okay. All right. So looking at this, as you have that option, I'm going to tell you, my preference and suggestion would be to take the lump sum. And for that opportunity, what you have is now you'll be able to control more of what you're investing in.

You'll be able to sit down with a smart investor pro and sit and look and go, okay, hey, here's where we are, here's what's going on, and the investment accounts that you all will have together will actually be in both your names. So it's not an issue of a survivor benefit now. You guys are both going to have that lump sum and you're going to sit down with someone at SmartVestor Pro and look at how you're going to invest this. And so it's going to be really crucial. But I like this idea. Now you all can understand your goals and the timing and what it is you're trying to accomplish. So that's exactly what I would do.

Unfortunately, some people out there aren't given that lump sum opportunity. So, Martha, I would definitely take that, move forward, and be very intentional with your game plan. Now, speaking of, people ask me all the time about investing. And, you know, I talk about this all the time because it's imperative. You've got to make sure that you're putting money away for retirement. Bottom line is people are relying on Social Security and I need you to hear me. The government can't count. And the last thing you want to do is to try to count on them. Right now, Social Security is set to become insolvent by 2035. Now, I know I just used a $10 word there and you might be looking at me and going, Hogan, what's insolvent mean? Broke? Like broke. That's what insolvent by 2035. Now, I know I just used a $10 word there, and you might be looking at me and

going, Hogan, what's insolvent mean? Broke? Like broke. That's what insolvent means right there. And so what we can't do is pin our hopes on that. We've got to make sure we're helping ourselves. So it's really important that you engage with an investing professional to be able to guide you along the way. Now, some people will say, oh, Hogan, I can invest on my own. I've got Google and YouTube. Listen to me, okay? You do not want to rely on that, all right? I used YouTube the other day to try to fix something on my vehicle. Right, that didn't go well. I ended up reaching out to a professional.

Number one, you don't need me with tools in my hand. That's a dangerous thing. But anyway, you need a professional in your life. So I'm going to stop you right there and tell you, when you start investing, you're going to realize you want someone that's dedicated to your future, just like you are, someone to be able to guide you. And so that's why you need to use a professional. I tell people, I want you to become the CEO of your financial future.

You know what that means? The chief everything officer. Oh, I like that. Put that on a sticky note, right? You're the CEO, and you want to get people on your team to guide you along that path, but you can't delegate your future. You can't just hand it off to someone and let them go handle it. You got to be plugged in and involved. And if you're married, I want you and your spouse both to sit down with a smart investor pro and really have a conversation about

it. Now, here's what you can do. You can go to my website, ChrisHogan360.com. That's ChrisHogan360.com. Click on the Dream Team button. And from there, you'll be able to get connected to a SmartVestor Pro in your area by putting in your zip code, and you move from there. And I'm going to tell you, it changes the game because you have an opportunity to have a conversation with someone. And that's a big deal. And I want you to hear me. They're not there to judge you. They're there to help you. So regardless of where you are right now, don't shy away from that. You've got an opportunity to sit down. So just grab your 401k, your 403b, your IRA statements and go in there and sit down. And I'm going to tell you, people have told me, Hogan, I thought going in there, they were going to judge me. I thought it was like going to the principal's

office. In reality, it's totally different. Not the people that we work with. They're there to help you. And so I want you to make a list of the questions you have about where you are and what your investments are doing and sit down and talk with them. Watch what happens. You're going to walk out of there with knowing you've got someone in your corner. And I'm going to tell you, that's a game changer. We all need the right people in our corner. The right people with the right information at the right time can make progress happen. This is The Dave Ramsey Show. Thank you. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave. And I just had a chance to go out in our lobby.

And boy, we are visited by all people, like from the eastern seaboard today. I've got Washington, D.C., West Virginia, Massachusetts. Absolutely fantastic. And if you're ever here in the area, I want you to come by the office. We're in just south of Nashville. You can have an opportunity to visit Baker Street Cafe. Melissa over there will take great care of you, have cookies and some coffee, and just get a chance to relax and

see the show as well as the bookstore. So we welcome you here. All right, I'm getting back to the phones. If you've got a question I want to hear from you, the number to call is 888-825-5225. Again, that's 888-825-5225. Going to the phone line here, I've got Jeremy on the line. Jeremy, how are you? I'm good, Chris.

How are you today? Oh, I'm focused and not finished, my friend. What's on your mind? Good. So I need some advice, man. I am married two months today. Oh, wow. Yeah.

And my wife and I were in our early 40s. This is my second marriage and her first. Okay. I've been through FPU before. She is not. However, we're into the program a couple of lessons together. She's on board, you know, doing the budgeting and that's snowball. She's excited about, you know, all of that. What she's nervous about is having managed her own money for 40 years, you know, combining incomes, you know,

having like a joint account. Um, she's really uneasy about that. So my questions would be, you know, what advice or motivation would you have for me or for her? And secondly, if it maybe takes her some time to get comfortable with that. Um, I just know it's going to be a lot harder to do a budget when you're working with different paychecks and pay dates and all that kind of stuff. Hey, let me ask you this, Jeremy. What do you think her biggest hesitation is? I think it's just that she's still nervous thinking that maybe a budget is restrictive. Okay.

I kind of think that's what it is. And her mind being told what she can and can't do because, again, she's managed her own money for 40 years, and I get that. But I think that's her. Okay. No, no. And it's good that you understand those two things. Let me ask you, you guys, two months of newlywed, how much debt do you all have now as a family? It's not bad.

It's about $40,000 total. Okay. What is that $40,000? Break it down for me. So she has a $10,000 car loan. I've got about $16,000 in student loans. I have about $4,000 change in IRS. Okay.

And then from my divorce, I've got like some attorney's fees and stuff like that. Okay. Okay. And what's the household income for you all? So thankfully, we both just kind of got some bumps recently. So we're about 91,000 base. Okay. Okay. But with that, I've got some child support I'm paying out of that too.

Right. But you all are in agreement about attacking the debt, correct? Correct. Okay. And you all are in agreement about the budgeting side? Yes. Okay. She's still a little nervous about it.

Okay. But yeah, she's still a little nervous about it um but yeah she's in agreement okay and and she has not gone through financial peace university with you no so we're actually um a couple lessons into it together right okay together okay good that's good i'd have a conversation uh you're right i mean she's had 40 years on her own um can have some nervousness. I mean, you, you know, I mean, you as well going into a second marriage, you had nervousness about being married. Right. But you knew you had found the right one. And so I would I would have a conversation with her. Talk about this, because when you guys went down the aisle and you said, I do. And she said, I do. It's now what we do.

And so now having that mindset of that bill paying thing together, it's important. And again, the control factor, I hear that a lot. A lot of people think, well, if we do the budget together or combine accounts, then this person is controlling me and that person. No, not at all. It's about you all doing the plan together. So I'm glad she's going through Financial Peace University. Sounds like you guys need to have some more conversations because the joint account together is going to be absolutely necessary. Because otherwise, you're operating like two separate entities, and you want to collaborate, and you want to go together. And you can let her know.

You were apprehensive about some things as well, but you were sure about her. I want you guys to be assured in the plan that you're working together. It's going to give you a great opportunity. Thank you for your call. All right, back to the phone. I've got Jay calling in. Jay, how are you? Hey, Chris.

I'm doing pretty good. How about you? Oh, I'm focused and not finished, my friend. What's on your mind? My question is, I'm in the middle of a divorce, and I've got a substantial 401K, and and I got a substantial amount of debt also and my question was basically uh there'd be a QDRO distribution to my student BX I'm wondering should I use an opportunity to pay off all the debt with the QDRO or should I just hold on to it and try and pay it off myself okay what is the do you know the total dollar amount?

Of the debt? Yeah. Yeah. That's at 192,000. Okay. And how much of that is associated to the divorce? Oh boy. Uh, you know, pretty much that's all of our combined debts.

That's not a half and half. That's debts. Okay. That's not half and half. That's everything. Okay. All right. And what is your income right now? About $125,000. Okay. $125,000.

And how much do you have in your 401k right now? About $472,000. Okay. So looking at this and walking through and understanding what's going to be associated to you and what's going to be assigned to her is going to be absolutely crucial. And obviously her distribution, that's going to happen based on the settlement and whatever you guys come up with as you walk through mediation or whatever the judge requires. But as far as you touching the rest of yours from your 401k just to attack the debt, I would not. You're making $120,000. You've got an opportunity to be able to look to see what it is that you owe and have that mindset of not only do

you want to take care of your now, but you also want to take care of your future. A lot of people fail to remember that. That's why you're putting money away in a 401K and a 403B, because that later becomes your paycheck. And so we don't want to stop compound interest from growing. Compound interest is a bad mother scooter. It helps money to grow, and it allows you to be able to see, and this stuff's starting to move and move, and we don't ever want to stop it. And it's just like planting a bush. I would not plant a bush and a year later go out and rip it up out of the ground to see how much it's growing.

And so I want to leave it there. I want that bush to grow, and I want your money to be able to grow. So I think you've got an opportunity to dig in. You're going to have to tighten your budget. You're learning life all over again as you budget for yourself and understand your expenses. And so you'll have an opportunity to recoup whatever you've lost. You've just got to have this mindset of it's not going to happen overnight. And I would encourage you just to stay very intentional with what you're doing

and stay focused because you're not finished yet. Thank you for your call. All right, next up, I've got Cheyenne on the line. Cheyenne, how are you? Hello? Well, I guess she did not want to talk to me. Okay. I mean, that's just bottom line. It happens sometimes. Sometimes the voice turns people off, I guess. I don't know. It's not like I started singing or anything. That's hurtful right there. All right,

let's try it again. Let's see if she's there again. Let's see here. Cheyenne, are you there? Okay, that's strike two right there. I'm not doing that no more. That's just bottom line. We're not doing it. We're not talking about it. Someone said to me, I got a question and they asked me, Chris, why are you so insistent about life insurance? Okay. And I want to talk about this for a couple of reasons because people get this confused. Life insurance is to be able to replace your income if something were to happen to you. And we tell people you want to go with term life insurance. Okay, term life insurance covers you for a set period of time. So you have a set dollar amount for a set period of time. Dollar amount, we tell people 10 to 12 times your income. So you take your income, write it

down, multiply it by 10 or 12. That's the dollar amount that you want to have in term life insurance. However, people say, well, Chris, I'm getting it through my job. Is that a good thing? Here's the problem. Portability. If you lose or leave that job, that insurance doesn't follow you. And now you've got a situation. So it's best to not get it inside of your job but to get it outside of your job.

And we talk about Zander Insurance as a great option for you, but you want to be mindful of that and understand what you have because you've got to protect yourself as well as your family. Well, listen, I want to thank producer James Childs and thank Amanda Rogers for helping me out here on the call screening. And I want to thank you, America, all of you for tuning in and listening. We appreciate you, and we want you to come, all of you for tuning in and listening. We appreciate you and we want you to come back.

This is The Dave Ramsey Show. Hey, it's Blake Thompson, senior executive producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the app store and download it today.