The Ramsey Show - App - Call Rented Money What It Is...DEBT! (Hour 1)

Episode Date: January 7, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. It is a free call at 888-825-5225. That's 888-825-5225. You jump in. We'll talk about your life and your money.

Andy starts off this hour in Kansas. Hey, Andy, welcome to the Dave Ramsey Show. Hey, Dave, thanks for taking my call. Sure, man. What's up? Well, I'm looking at retiring from the military here shortly. I've got 23 years in, and we didn't do the Dave Ramsey plan, but luckily we have pretty much been debt-free most of our marriage,

and the only thing we have is our house. So I've been trying to convince my wife to take some of our non-retirement savings that are in mutual funds and sell them and pay off the house, but it's a really hard sell and I guess I'm wondering if I'm just pushing too much

and I should just compromise and just start paying it off as much as possible each month. How much do you owe on your home? We owe about $160,000. And how much do you have in non-retirement mutual funds? About $800,000. Okay.

And what is her reasoning? she's she i think is nervous about the uh the loss of um the interest that we would gain from keeping that investment going how much do how much is your home worth uh it's worth about 340 okay if we're going to go with her theory, we would have to, in order to be logical, go refinance your home and borrow as much as possible on it in order to invest more in non-retirement assets. And I've brought that up. And she's not willing to do that. She's very hesitant. No, no, she's unwilling to refinance your home and borrow three hundred thousand dollars on it in order to put the money into investments right why because it's making so much interest that's illogical right yeah i know okay there's something wrong

with her argument she's gonna have to decide's got to paint or get off the ladder. Either we love borrowing money on our house to invest in retirement or invest in money and invest, or we don't. Right. You can't have it halfway. It's not logical. Right. It's bad. It's flawed. Trying to find a loving way to get across to her.

Well, I mean, it's flawed thinking. I don't have to be loving about it. It's just a discussion with my wife. You know, I mean, honey, you got to her. Well, I mean, it's flawed thinking. I don't have to be loving about it. It's just a discussion with my wife. You know, I mean, honey, you've got to decide. Okay, if you're going to make an argument about this, you've got to be willing to go with your argument. And the point I'm making is the fact that she won't borrow on the $300,000 on your home in order to invest more

says that she's not giving you the real reason that's what it says in other words her argument's not really her reason because otherwise she'd be going yeah let's borrow 500 000 on this house and put it all in investments it's not it's just not a real reason something else is going on somebody's gotten in her head somewhere uh that that's you know giving her this thought so here's the thing my proposal would be this honey let's pay off the house we've got six hundred and sixty thousand dollars left i think we'll be okay good lord you know right and if you hate having the house paid off in two years i promise we'll go

refinance it and borrow and put the money back yeah no that's a good argument i have never had anybody that paid off their home that hated it it's like i never had anybody that i convinced as a christian to start giving 10 that didn't say this is one of the smartest things i've ever done to begin to tithe it changed my life i've never had anybody go dave you just you know that suggestion was absolutely horrid becoming more generous or becoming dead for your absolutely absolutely horrible Dave Ramsey suggestions. You know, I mean, it's just illogical as crud, dude. So, I mean, you know, there's a part of being loving, but there's a part of sometimes you just argue with your wife, you know, because she's wrong.

I mean, Sharon, I listen to her. She's a Proverbs 31 woman. She's a virtuous woman, so I want to listen to a virtuous woman. So I have no lack of gain scripture says and so but there's sometimes that sharon is making an argument it has nothing to do with virtue she's just being an angry hillbilly and so i got to call her out on that i'm going hey angry hillbilly we're not this is not the virtuous wife we're having a discussion with here you're just pissed off and we're not doing that and so you know and i'm not

i'm not picking on your wife. I'm talking about doing my personal laundry on the air here to let you know I'm human. But the point is every couple has a discussion on this, and if she were doing cocaine, I'm not having a loving discussion with her about her cocaine. We're freaking stopping it. You know, now this isn't cocaine, but this is just illogical. There's no reason for it. So pay off the house. And if you hate it, darling, in two years, we'll go

refinance it and borrow even more on the house if you just detest being debt-free. And I've never had one go back on that. So try that. Maybe it'll work. I don't know. Sometimes you just argue with folk, you know. Phil is on the line in Oregon. Hey, Phil, how are you?

Hello, Dave. Thank you for your work and your ministry. It's had a tremendous impact on our marriage, my life, and a lot of friends and family as well through us. So thank you. Thank you. I'm calling on behalf of my mother-in-law, though not us this time, 83 years old, and recently moved into a facility that she loves and is very happy with. It costs her about $4,500 a month, all-inclusive.

And my question is in relation to the investment of her resources. She has about maybe just under $2,000 coming in from some pensions. She's a widow and Social Security. And the balance is being funded with around $7,000 to $800,000 that she has to invest from the sale of her house and a few other things. The question is, the investment advisor that works with her, who's trustworthy, tends to talk around about a 5% return, will cover what she needs, but I've heard you talk more about 8 to 10, and I'm just trying to know what to shoot for, what's reasonable at her stage of life.

Well, if she makes a 5% rate of return and she pulls off $2,000 a month, she's going to have plenty. It'll last her in perpetuation mathematically. Right, unless it gets worse, yeah. I mean, if it's five percent that's forty thousand dollars a year on 800 grand and so you know that's 3 300 bucks a month plus the 2 000 she's got coming in is more than enough to cover what she's got so you know and and worst case if it didn't quite do that and let's just say you burned 800 000 to the tune of uh forty

thousand dollars a year how long would that go? 20 years? If you never made a dime on it. Right? Correct. If you just divide $800,000 by $40,000 a year, how long is that going to last you? 20 years. So she's okay.

She's going to be all right. I mean, I personally would, I mean, I appreciate her investment advisor being conservative. She's 80 and we don't want her scared or awake at night worrying about the stock market or something like that. I'm comfortable with a little bit more aggressive investing than she's doing, but I'm also comfortable with not doing it if it's going to freak her out. So you're fine. She's done a wonderful job. She's in good shape financially. She's able to take care of herself, which is one of our first goals for all of us, to retire with dignity. Are high health care costs getting you down? Are you confused trying to navigate your options?

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chministries.org. Marielle joins us from New Jersey. Hey, Marielle, welcome to the Dave Ramsey Show. Thank you so much for taking my call. Sure, what's up? So my husband and I are currently in Financial Peace University. We have completed Baby Step 1, and we are budgeting to pay for our debt with the snowball method. Good. However, one of the mistakes that we made was we leased a car, and the lease for that car ends in May.

And so in May, we need to have a new solution for my husband's car. We've agreed that we're not going to lease again. We want to buy a car that's used and all of this, but we're not sure how do we prepare for that while also considering our looking to pay off the debt in Baby Step 2. Gotcha. What's your household income? About $108,000.

That's good news. Okay. And how much do you need for him to buy a car? We were guessing about $10,000. Okay. And we have until May. Mm-hmm. And how much can you save a month towards that

if you don't do anything extra on your debt snowball right now? We can probably do about a thousand dollars um each month out of 108 wait what out of 108 000 you can only save 12 000 a year how much oh oh sorry i mean here i was thinking a month well i was thinking a month too that's only 12 1 000 a month is thousand dollars a year out of 108 is pretty puny um yeah no i think well right now with what with the debt that we have and with the like our mortgage and all of these things i think it's probably it could be a little bit more but we're just getting this started and so i was being very conservative with it and saying

it i mean the problem is is that that's gonna have you're gonna have four thousand dollars for your car in may uh-huh because you have four months right right so we need to probably save more than two thousand more than a thousand more like two thousand that's gonna give you eight thousand so i would what i'm saying is i would stop your debt snowball pay minimum payments on everything still do a beans and rice rice and beans lifestyle no eating out no vacationing put the kids up for sale and the dog and the cat up for sale everything's gone we're out of here okay hardcore and then i think you can save two thousand dollars a month you've stopped your 401ks right yep good okay and you're not

getting tax refunds right um i'm not sure about that okay if you are you need to adjust your w2s but you got a tax refund to calculate into this if you got one coming okay so what i'm trying to scrape together five to ten thousand dollars buy him a car by may and then let's kick this thing into gear because by the way that's going to help you got rid of a car payment yeah no exactly and that's why um i just wasn't sure how it would play in addressing the debt that we have and accumulating additional debt but that makes sense i don't think you're gonna have you know you're either going to borrow some money for another car which i don't want you to do or you're going to delay your debt snowball a little bit here a couple of three months while you pile up some cash to get you to do, or you're going to delay your debt snowball a little bit here,

a couple of three months while you pile up some cash to get ready to do the car deal. Then we can move on from there. Now, of course, any money we can squeeze out of this budget that we haven't found yet or any extra income we can find or anything else we've got to sell that we can sell to cause this whole process to accelerate, that all goes into the equation. But the faster we can get $5,000, $6,000, $7,000, $8,000 for him to have a car, the faster we can start kicking this debt snowball down the hill. But until then, I'm with you. You've got to get ready because it's going to be either or.

You're not going to be walking. That's not reasonable, not making $108,000. But I want you to really tighten the screws down on this budget. I'd love to see you do $2,000 a month and sell some stuff and whatever else, extra work or whatever. And that puts you in the $5,000 to $10,000 range on the car by May when you turn the keys in on the stupid fleece. And there you go.

Hey, thanks for the call. Good question. Hey, for those of you that haven't heard it in a while, not picking on her at all. She's doing the right thing. She's thinking exactly the way we want you to think, especially you're in Financial Peace University. Everything's going the right way. But I get questions all the time from people that are new to this whole stuff that we're teaching. We teach people not to borrow money because that gives you control of your largest wealth-building tool.

When you don't have payments, you have your largest wealth-building tool, your income. You're not giving all your income to someone else. If you drive through a major city, you will see life insurance buildings and banks in the skylines. Santa Claus did not build those. He lives in the North Pole. You built them by giving the banks and the life insurance companies your money. And by the way, they kept it. So that's what's going on here.

It's a transfer of wealth, you to them. Stop it. And so when we get you in that that mindset then we have to look at card payments car payments are a mantra of the middle class lower class people sometimes take out car payments but they usually get completely screwed over at the tote the note lot or the high interest rate ripoff subprime or something like that but middle class people tend to buy new cars while they're broke that go down in value like a rock. That's where Chevy got that, like a rock. It loses its value like crazy, and you're financing it and have a payment on it.

Oh, and then a few years ago, we got more sophisticated. No, we got dumber. We got more and more stupid, and we fell for it again. Now 78% of the cars that leave a new car dealer's lot are leased. Leased. Now, let me tell you what a lease is. It's called a closed-end lease. You're paying a payment monthly against the value of the car. You're renting the car. At the end of the closed-end lease, there's a residual value, a lump sum that is due if you want to keep the car. And so you pay $542 a month on it for 30 months, and then you have the opportunity to pay $17,400 to keep the car, or whatever the

number is. But that's how it works. Or you can turn the stupid car in at the end of that time, and you have effectively rented the car. No, you didn't. You rented the money that the car represents. When you rent money, that's called debt. Now, you can call it a lease if you want to call it a lease, but you're renting money, which means I can take that stream of payments, that 30 payments of $549, I can take the $17,500 or whatever the numbers are that are at the end of the closed-end lease, and I can put them in my calculator, and I can put in the present value of the sticker price of the car, the MSRP, which is how this is calculated. It's not a bargain.

And then I can figure out your cost of capital, translation, your interest rate that you paid in order to lease the car. On average, with Ford Motor Credit, Lexus Motor Credit, General Motors Credit, Chrysler Credit, Toyota Credit, do I need to Chrysler credit, Toyota credit. Do I need to name all the credits, okay? I mean, when you put it in the calculator, it comes out 14.2% on average. But by the way, they don't tell you you're paying a 14% interest rate. They don't have to, because you're not technically borrowing money, you're renting money.

And so it doesn't fall under the federal truth and lending act and so you don't get one of those little one page confusing sheets that shows you the effective apr that it does if you actually borrow the money from the bank or from one of those credits but you've been renting money you've been borrowing money now you know why 78 of the cars leave the lot now with a car fleece it It's a fleece. You got fleeced like a sheep. Bad idea, okay? 14.2% sucks. Get a clue, okay?

This is a bad idea. You know why all those cars leave the lot car leased? Because it makes the car dealer and the car company more money. And so they have trained you people like a bunch of cattle, a herd. We got a lot of animals in this rant here, okay? But they've trained you like a bunch of cattle to where you quit asking how much. Rich people ask how much. Broke people ask how much. Broke people ask how much down and how much a month. What are my payments? And then they say stupid things like, oh, I can afford that,

which means if there are no bumps in the road, if my career never takes a left turn, if nobody gets sick in my family, I might be able to make the payments. Because this month, while everything's perfect, I think I can pay that payment. This is stupid, y'all. This is straight up stupid. You know why people lease cars? Because it's almost nothing down. It's more a month and it's a higher interest rate. But it makes the car company money and they're really good at selling it.

And they look at you like you're an unsophisticated dote if you don't lease a car from them me i'm an unsophisticated dote with tens of millions of dollars because i quit giving it to those idiots this is the dave ramsey show Thank you. Well, this is the month when people decide if they're actually going to do something to change their lives. If you're sick and tired of being sick and tired, one thing you could start with is our biggest selling book. About 7 million copies have now been sold of the Total Money Makeover. It's been number one on the Wall Street Journal for the past 10 weeks. Thank you guys. And the book came out in 2003, by the way. But the good news is I don't say anything that I have to change. So it's always the same. Live on less than you make, get on a

budget, work the baby steps. I do it every day, and I have for 30 years, but it still works. So if you want to get started, the Total Money Makeover is on sale right now for $12.99, and you can get that at DaveRamsey.com or call the Ramsey Concierge Team at 888-22-PIECE, 888-227-3223. Julie's in Wisconsin. Hi, Julie. How are you? Hi, Dave. Thanks for taking my call. I'm doing good. Good. How can I help? I have some tax debt that I need to get paid off,

and I'm in babysit two. My question is that I'm defaulted on a couple of my credit cards now that I have to have the minimum payments automatically taken out, that kind of ate into my budget. So I know that you put the taxes at the top of the baby steps snowball. Now do I get my two credit cards paid up to the minimum before I do my IRS, or do I put those later? How much tax debt do you have? About $17,000. What is your household income?

I make about $75,000 a year. Okay. And the $17,000 is all back taxes? It's from last year. So it's a tax return from 2019. And you're making an agreed monthly payment on that? Yes. I'm on a monthly payment. And that's being

withdrawn from your checking account automatically? Correct. Yes. How much are they taking out? The IRS is about $200 a month, and then I have state tax for two states, actually, and those $24.40, or I'm sorry, that's the total. So $125 is the minimum, and then just, I think, $25 for the other one's the minimum. Okay, so $500 is coming out for both of these, roughly. Right, yep. Okay, but you make $75,000 a year. So you're, quote, current, unquote, on the back tax payment plan

because they're withdrawing it from your checking. Right, yep, I'm current on the back tax payment plan because they're withdrawing it from your checking right yeah i'm current on the taxes yeah yeah so to answer your question i would get current on the other bills how far behind are you on the credit cards uh just a couple months okay yeah let's get current let's get current on those before you start paying your debt snowball. Okay. And that answers your question, right? And then your first order of it paying extra on will be the smallest of these two tax bills, three tax bills. You've got two states and one IRS.

So you've got $17,000 with the IRS. How much do you owe these states? $24.40 and $7.62. Okay. So $7.62 is the first order of business, then $24.40, then $17,000. Then you start the first order of business, then 2440, then 17,000. Then you start the rest of your debt snowball. You clear these taxes.

Now, the reason we clear taxes first is because the IRS has almost unlimited power. It's amazing what they can do without even going to court. They can just start taking crap. I mean, it's amazing. That's why I call them the KGB. And so some of you aren't on even old enough to know what the kgb is but um the uh and they have real high interest and real high penalties as well but yeah let's get you current on everything and then as you squeeze

money out of your budget working extra lowering your lifestyle selling stuff all that kind of thing we'll start attacking the 762 the 2440 and then 17 000 then start working the, lowering your lifestyle, selling stuff, all that kind of thing. We'll start attacking the 762, the 2440, and then the 17,000, then start working the rest of your debt snowball. Other than the taxes, how much debt have you got? I have about 70,000 total. And you make 75. So what are you thinking, a little more than two years? Yeah, two years was the plan.

Okay, so that's $3,000 a month. Yep, I'm going to be working more and just selling everything I can. So you're game on, girl, huh? I'm game on, yeah. I'm going to try to get to FPU this year, but right now I'm just totally game on. What did you say? I'm going to try to get to FPU. Oh, you haven't been?

I haven't been. Oh, game on, girl. Game on, girl. Goes on. Game on, girl. Goes on me. You're going as my guest. Oh, thank you.

You're wired up, fired up, girl. You're who I like to help. You're getting it done. Thank you. No whining out of you. You don't have to call the ambulance or anything. You're just getting stuff done. I want to help you.

Okay. Thank you. You're getting it. How old are you i'm 40 awesome awesome you're a rock star kiddo hold on uh kelly will pick up and we'll get you signed up for financial peace university uh you call me back and do your debt-free scream in under two years i want to hear about it you're incredible get her done ellie is with us ellie is in arizona hi ellie how are you hey dave, how are you? Hey Dave, good, how are you? Better than I deserve. What's up? So I had a question.

My former employer never stopped contributing to my HSA and they recently sent me a form to sign so that they can take back that money. So I was wondering what your suggestion would be. Should I go ahead and sign it?

How long did this go on? Since April. So how much did they put in your HSA? A little over $1,000 extra. That they want back. I never used my HSA. You know, if I was that incompetent, I'd be too embarrassed to ask for it back. I know.

It's not the first time they made errors on my hsa so i'm not surprised yeah this would be an incompetent large corporation would it not no it's actually a smaller company oh really their hr is not the brightest yeah apparently yeah that's pretty stupid yeah well i you know you it's not your money, you know. So, yeah, sign the form and let them take that money out. That's fine. But should I – is there a way that they can just, like, add that to my annual pay that they paid me instead of me signing the form and then me having to get something from them next year for this? I'm sorry, you still work for them?

No, I don't. That's what I thought you you said so how would they add it to your pay um i don't know oh you're just gonna you want them to give you a thousand dollars like just no not give it to me because i mean it's already in my account yeah no i mean they gave it to you it's not you didn't earn it it wasn't expected it was a mistake and so if you get to keep it under any scenario, that's them giving you an extra $1,000. That's what I would do if I was that incompetent because I'd be too ashamed to do otherwise. But I'm not sure these guys have that kind of backbone. Okay. So I think you're going to give them their $1,000 back.

Yeah. But they can't adjust, like, my annual income for that amount since they already gave it to me oh you well you wouldn't pay taxes on it hsa is pre-tax oh that's true okay so it's not going to affect your tax bill yeah the only problem i've got is i don't want them taking more than they want than that than they're due out of your account and since they've proven that they don't know how to do basic addition and subtraction i'm worried about that yeah i already made the calculations and they did they submitted the wrong amount so i'm going to have them wanting to take more than they said of course they did of course they did yeah it's not your money

give it back to them it doesn't it doesn't hurt you on your taxes and let them take it out. But control the scenario like you're doing because they're not to be trusted. Because there's one thing worse than crooks. It's really dumb people. They're scarier than crooks. Incompetent people at this level, you get screwed more by them than you do by crooks. Because crooks you can kind of see coming sometimes melissa is in idaho hi melissa welcome to the dave ramsey show dave i'm so excited to talk to you i'm a big fan i'm honored how can i help

well um so i have a lot of life changes coming up i am getting getting married in May. Yay. And thank you. And I've been working for the last couple of years. I'm 23 and I make about $74,000 a year. Good for you. And I've saved about $20,000 above my emergency fund. So I guess I'm in maybe step 3B. You are. But my question is, so my fiance has a little bit of school debt. It's about $12,000. Mm-hmm. Right now. I'll tell you what, I'm going to make you hold through the break so I can hear the whole story and give you a proper answer. Sorry about that.

I'm a slave to commercials. This is the Dave Ramsey Show. All right, we're talking with Allie in Illinois. Hey, Dave, how are you? Good, how are you? That was you I was talking to a minute ago, wasn't it? I'm doing good. No. No, got the wrong person.

I'm sorry, putting you back on hold. Who was I talking to? Where did my caller go that I put on hold going into the break? I'm losing my dadgum mind. Idaho. Yeah, it was Idaho. It was Melissa. That's it.

Okay, I got it. That's okay. Thanks. Sorry about that. Yeah. All right. Melissa, now you're there, aren't you? Yes.

That is you. Okay, good. You're 23 years old, getting married in May, $74,000 income, you've got $20,000 in savings, and your fiancé's got $12,000 in student loan debt. Is that what you told me before the break? Yes. That was you. Good.

Okay, good. I'm back in the lane then. Good. All right, so cool. So your question's what? My question is, he has about four more years of school, which includes graduate school, to become a physical therapist. And so as we're talking about money, he wants to pay off the debt, but he thinks that since it's not gaining any interest or anything, then we can just kind of have that amount of money set aside in a savings account and then pay it off once he's fully done with school.

We're planning to cash flow the rest of his schooling. Good. Okay. Number one goal is cash flow the schooling. Number two goal is to become debt free. So if you have a plan to cash flow the schooling and the plan does not include using all of the $20,000 you have saved in order to do that, then when you get back from the honeymoon, pay off his student loan.

He's wrong. Okay. Hey, listen, if you want to play footsie with debt and try to figure out some way you're going to beat debt your whole life, you're going to end up broke your whole life. The best thing you can do with debt is treat it like a snake. They all bite. They're all poisonous. Kill it.

Even little student loan debts that don't accrue interest while I'm in PT school. Now, get rid of it. Be done with the concept. Don't allow it back in your house. Beat the snot out of it. And that's what I would do. Now, so, in other words, we're going to use your fabulous income that you have at 23 years old making $75,000 a year. That's awesome.

What do you do? I am a technical solutions consultant for a printing company. You are killing it. Awesome. And great income. I mean, and so we're going to use your great income and his part-time work while he's going to PT school and cash flow him out, right? Mm-hmm.

Okay. Yeah, let's do that. And so when you get back from the honeymoon pay it off does that make sense it does yeah um yep definitely okay so can you get him to do it i i think so um he knows that i'm like a dave ramsey, and he hasn't really been, you know, he's not been bad with money, but he definitely admires that about me, so I think I can show him this clip and convince him. Yeah.

Well, regardless of Dave Ramsey, you were way ahead of him. I mean, so, yeah, he should look to you for advice on this. Not to do it all for him, but we're going to do it together. But the concepts you've been using have been more successful than the concepts he's been using, regardless of whether you got them from me, right? Sure.

The fruit is there. I mean, the fruit's on the tree. You've got positive results. He's got negative results financially. So, I mean, this set of behaviors creates this result. This set of behaviors creates that result. Kind of like what you do every day, and really what he's going to be doing every day as a PT.

It's the same thing. Behaviors create results. And so you need to decide which behaviors you're going to engage in, all that kind of junk. So, hey, very cool. Very cool. Hey, thanks for calling in. Open phones at 888-825-5225. Now it's Allie's turn, and I can't even push the right button.

Good Lord, what is wrong with me? You think I've never done talk radio. Allie is in Illinois. Hi, Allie's turn, and I can't even push the right button. Good Lord, what is wrong with me? You think I've never done talk radio. Allie is in Illinois. Hi, Allie. I think it's your turn. How are you? I'm doing great. Thanks for having me on.

Certainly. Again, how can I help? I am working on baby step number two with a snowball, and I last month ran into a small medical emergency and didn't have the money to fund that small emergency so I opened up a two thousand dollar medical credit card and that card has no interest for six months but it's not the smallest thing in my list of debts. So I was wondering if I should pay that off first since there's no interest, or should I start from the bottom with the smallest one and work my way up to it? How much debt do you have total?

Right around $82,000. Woo! And what's your household income? $83,000. That's good. Why couldn't you cover $22,000 and make it $83,000? Bad handling. Yeah.

Okay. Well, what you need to do is, as my friend Anthony O'Neill says, you have to take debt off the table as a possibility when these things occur. There has to be another way to solve it other than boxing yourself in yet another corner, painting yourself in yet another corner, and that kind of thing. So not what I would do. Let's see. How many debts do you have in front of the $2,000?

Two or three, all under or near $1,000. Okay. So $5,000 is not going to be paid off. You're not planning on paying off $5,000 in six months making $80,000? Well, I was wondering if I should tackle that one first. I understood that, but my point is all the things in front of it and it don't total up but to $5,000. You're going to knock it out before six months anyway.

How much are you planning on paying off a month? On that one? No, on debt, on debt in general. How much extra on your debt snowball? Mm-hmm. Well, I'm working a side gig, which I didn't add into the $83,000, which is like $1,500 a month. Mm-hmm. So how much are you going to pay extra on your debts a month making $105,000? Well, I hope that probably $2,000 a

month. That's what I'm trying to shoot for right now. Yeah, that's pretty puny making $105,000. That's only $24,000 out of $105,000. What are you doing with all this money? Paying bills. You don't have your budget done yet. Yeah, no, I actually just downloaded the EveryDollar app yesterday. Yeah, you're just getting started. You're just getting started. When you do your EveryDollar budget and you get it all laid out, you're going to see what I'm talking about. Here's the numbers, okay? Let's walk them through. You make $83,000 plus $1,500 a month is another $18,000. That's actually $101,000, not $102,000, not $104,000. I was close.

I'm sorry. I'm messing this up. Anyway, it's $101,000. $101,000, counting your extra gig. So $101,000, how much can you pay? If you only pay $2,000 a month, that's $24,000, how much can you pay? If you only pay 2,000 a month, that's 24,000, right? So that leaves $76,000 or we don't know where it went. So when you start doing your budget,

you're going to find that you can probably do 3,000 a month, and you're actually going to pay this all off in a very, very short period of time. You're going to pay off the first things in that snowball, including this medical emergency item, probably in two months. So it's going to be inside of six months. Okay. Okay. So you need to get your budget done and tighten everything up, and let's get, you know, bigger numbers flowing at this.

I like you make good money money and you picked up a great side gig and and and so everything's great here very well done good stuff appreciate you calling in open phones at 888-825-5225 a budget is people telling their money what to do instead of wondering where it went if you worked for a company called You Incorporated and your job at You Incorporated was to manage money for You Incorporated and you managed money for You Incorporated the way you manage money for you now,

would you fire you? If the answer is yes, it's time to make some changes. It's time to get on a plan and manage the money like you're a responsible freaking adult. As if it was your job and you were going to get fired. Be faithful in the little things and you'll be given more to manage That's how this stuff works for Allie For me And for you This is The Dave Ramsey Show

This is James Childs, producer of The Dave Ramsey Show Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.