The Ramsey Show - App - Can I Buy a Luxury Car? (Hour 3)

Episode Date: August 12, 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. Open phones at 888-825-5225. Anthony O'Neill, Ramsey Personality, number one bestselling author, is my co-host today here on the air. Again, the number, if you want to talk, 888-825-5225. Starting off this hour is Jose in San Diego. Hi, Jose. How are you?

Hey, I'm doing good. How are you doing? Better than we deserve. What's up? So kind of to explain my situation, I'm 20 years old. I don't pay any rent. I live with my parents. I'm working two full-time jobs, making about $3,800 a month. I only pay about $500 in bills. And I'm kind of stuck into what to do next. I don't know if to pay off my car or save up more money. I'm just wondering what would you guys do in my position? How much is it? You have a car?

How much are you paying a month for your car? I pay $192 a month. How much is on the car? $200 in insurance. How much do you paying a month for your car? I pay $192 a month. How much is on the car? Plus $200 in insurance. How much do you owe on the car? I owe $8,000. Okay. All right.

And then how much do you have in your bank account right now, in your savings? I have $5,700. $5,700. Okay. All right. So there's two things that I'm seeing here, Jose, is one, you're living at home and you're not paying any rent at 20. I'm not too, too upset with that, but I am having some concerns that you're not trying to really start practicing how to become a young man. And then the other part of it is you're making thirty five hundred dollars a month and um you have a car note so if if you're going to be at home living with parents you know without

no bills you should be 100 debt free and building towards that so the very first thing i'm doing with my money is i'm paying off all of my debt. That's the very first thing. No issues, no ifs, ands, or buts about it because you're in a position that a lot of 20-year-olds are not in. You know, so that's the very first thing, pay off your debt. But where you are career-wise now, is this where you're going to be at for the next four or five years? Is this a career destination for you? No. So I got the second job because i dropped out of college because my college turned into online only and i'm planning to come back when it's on campus and for now i just want to save money until school comes back and uh that's my plan

great what are you going to study? What are you studying in school? I want to do nursing. Good for you. Okay. So here's your goal. Anthony's right. Knock the car out and pile up cash to pay for college. Yep.

Pretty simple goal. Okay. How big a pile of cash can you possibly get to go to college? As big as you possibly can have. I'd love for you to have $100,000 piled up. Absolutely. And you can do that easily depending on when you go back and how long you work and all that but i mean first first next two months you're gonna pay off the car yeah then after that you can put four thousand bucks three thousand bucks aside that's forty thousand dollars

a year yeah and uh you you can have a pretty stinking good pile of money and pay cash for college when you go back i think that's and you get a nursing degree stinking good pile of money and pay cash for college when you go back. I think that's, and you get a nursing degree, and it's paid for in cash, and all the while you were driving a paid-for car. Ding, ding, life is good. Now, Dave, as a father, and I could be wrong here because I'm not a parent, so I'm asking a father, 20 years old, are you charging me rent? Because I know when I went back home, my dad said, hey, I'm not going to charge you a lot,

but you're going to give me something to stay here. Yeah. Well, I mean, you had a little bit of a different story. I did. So he's bringing you back in after he kicked you out. Yes. And so he's setting a tone with that. And I might have done that exact same thing in that setting.

Now, so, but like Denise stayed with us for three months after college. Gotcha. Before she got set up in her new apartment, we didn't charge her. Gotcha. But the rent was that she's going to be on a budget, she's going to live under our rules, under our roof, and she's going to pile up some money to get ready to move into that rental. Okay. And so behaving in an adult way that has a good trajectory is good enough rent for me.

Gotcha. Gotcha. But, and so this young man here i would let him stay there rent free absolutely knock that car out pile up pay cash for nursing that's a good this kid's going somewhere yes he's he's a sharp young man yes i agree you know uh now if it looks like he's camping out i'm gonna make it uncomfortable by starting to charge him rent right right i Right. I'm going to make it too comfortable around here. Because we do want you to leave.

I love the old picture, the analogy, and it is a fabulous one. The eagle builds a nest out of thorns. Out of thorns, yeah. From the thorn bush, long thorns, like three, four-inch big thorns. And when they build the nest, they point the thorns into three four inch big thorns and when they build the nest they point the thorns into the nest and then they fill the nest with down so that it's perfectly comfortable and the thorns aren't touching anybody and the little baby eagles are born and then as they grow the mother eagle starts pulling the stuff out because she was and it gets progressively

uncomfortable to stay in the nest because when you jump out of an eagle nest it's on the side of a cliff you you have not flown yet you have two choices splat or fly and so it has to be uncomfortable to want to leave in that situation. Yes. Right? Yes. Now, I'm not suggesting you splat your kids. That's not my point. Right.

But this idea that it's comfortable and protected from predators as it should be, and then as they become young eagles, you start pulling that stuff out and you make it progressively uncomfortable until they make the leap and they spread their wings. I love it because an eagle that does not leave the nest is later known as a turkey. I agree. So great. And I ask that question, Dave, because, you know, when you look at the student loan situation, we look at the demise of today's millennials. I don't think it's just a student loan crisis or it's all on millennials. I think it's a parenting issue. Yeah, yeah. And so it's like, I think you have a lot of parents. Hey, you're 30 years old. You're 35 years old.

You can stay here and not have any kind of responsibility. So that's why I wanted to get your wisdom on that. Yeah, I think that's a different thing than a 21-year-old or an 18-year-old. I mean, if you got an 18-year-old and they're going to live at home and they go to college debt-free because they don't have a dorm bill,

hey, all day long, I'm not charging them them rent i want them to do that yes yeah so that again that's up they're engaging in something though that is good for their future so we're helping them in a different way but the so the purpose for charging rent as far as i'm concerned is the pulling out of the down to make it progressively uncomfortable yes but if we need someone to stay comfortable to get the goal accomplished then i can let them sit there for a little bit yeah and so and you know what my dad did with that money when i moved out he gave it back to me yeah that's that that's the guy that that guy is he's a great he's a world-class dad i was so upset i was like i could have kept the money

he said you would have spent it well there you go but i mean a lot of parents do that that's not unusual say you're going to pay me this and and then they you know gift it back to them later but they wanted them to get the habit of paying rent and as you said as a young young man to start your step into your manhood you start taking on your own bills yes sir but in this case we're going somewhere with what jose's doing and he. And I think he's got a great trajectory. Brilliant. So very well done. All righty.

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It's getting low. Some of you cashed out your 401K. You shouldn't have done that. The government passed a stupid bill. I mean a stimulus bill. And they lowered the 401k early withdrawal penalties. So people are doing stupid stuff like taking money out of their retirement. That's dumb.

Don't do that. Did I mention you shouldn't do that? It's there for one reason and that's for retirement. The only time you should even think about an early withdrawal is to avoid a bankruptcy or a foreclosure. If you've already withdrawn from your 401K, you can still put yourself on the right track to retirement. What you need to do is you need to have somebody on your team. Go to DaveRamsey.com slash SmartVestor,

and we'll help you find someone, one of the SmartVestor pros in your area. You select which one you want to deal with, and it changes everything. You get somebody in your corner that's telling you what you can do. Open phones at 888-825-5225. That's 888-825-5225. David is on the line in Chicago. Hi, David. Welcome to the Dave Ramsey Show.

Hey, Dave. Hey, Anthony. Thanks for taking my call. Sure. How can we help? I'm looking to make a luxury purchase, and I've been eyeing this purchase for a very long time. And I finally got a tool from my wife, and she's on board now. And now I just want your input to see if it's justified financially for us.

It's a luxury car that I've been looking to buy. What kind of car is it, David? It's a 2017 Rolls-Royce 2-door. Okay. What's it cost? It's $220,000. How much? $220,000.

$220,000. Okay. What are you making here? Combined, me and my wife, we make $550,000. Okay. And what's your net worth? We have about $2.4 million and that includes some of our house too. Okay. And then $2 million in mutual funds.

So your net worth is? About $2.5 million. Oh, $2.5 million. Okay. And we do have about, our house is worth $750,000, but we still have $300,000 remaining on the mortgage. Hmm. Okay. All right. Any other debt?

I just had to ask. You shouldn't, but I just got to ask the question. No other debt. Okay. Okay. Well, the rule of thumb is you shouldn't have uh items that are going cars items with things with motors in them that total up more than half your annual income this is close um and obviously these numbers are are ridiculous for most people they don't

face a half million dollar income they don't face a $200,000 car purchase. I wouldn't do it until I paid off my house if I were in your shoes. Okay. But I don't think the car is completely ridiculous. Yeah. It's close. I mean, it's kind of on the bubble. How much money have you got in savings?

Not counting retirement. Savings, we have about $200,000. Okay, and you don't have any money other than that that's non-retirement money? You have investments that are non-retirement? Just our house. Yeah, but you don't have a non-retirement mutual fund or stock portfolio or something like that? No, no.

So if he goes by this $200,000 car... You got no money. Yeah, you have no more cash, right? No emergency fund? It would just be the $200,000, yeah. So you'd have no emergency fund if you bought the car? You mean, oh, okay, no, no.

Yeah, so no. No, you don't buy the car, yeah. This car is not an emergency. So out of the $200,000 you have in savings, if I were in your shoes, what would I do? I think you need to get this car someday. Yeah. But I do i think you need to get this car someday yeah but i don't think you're going to get it now um and i don't mind i mean i think you're probably going to end up making more money and saving more money you've done a great job you have a fabulous net worth uh but driving that car and having zero money in the bank is unwise right so i want an

emergency fund sitting there three to six months of expenses. That sounds like $50,000 to $75,000, which leaves you $100,000 a quarter. Throw at your house. I'd knock my house out this year, be done with it, and then I'd save up and pay cash for this car next year. Yep. So you can do that next year. You can also pay off the mortgage. Yeah, I want to pay off the mortgage and have an emergency fund in place.

Because here's what it amounts to, David, okay? This is a toy. Yeah. Right. I've got some toys. I own several automobiles. I love cars, too. I'm a car guy.

So I'm kind of salivating over this purchase with you. I think it's a very cool car that you're talking about. But you want toys to be where you don't financially notice them like if i just set fire to that much money in my driveway would i still be okay the next morning that's what i mean by not financially noticing it and if you set fire to 200 000 in your financial situation sitting in your driveway you would notice it because you'd have no emergency fund and you still have a mortgage. And that's how my thinking works.

And so we work with a lot of uber high-end earners, some of them well-known people, some of them not, some of them athletes or music people or whatever. And sometimes people have trouble enjoying their money and then sometimes all they do is enjoy their money and so uh but like i was with a guy the other day that was he's made 15 million dollars last year income and he bought a 400 000 car now that's he can set fire to that much in his driveway and not notice. When you make $15 million, you can buy $400,000, right? And so you're not quite at that mark yet, and I want to get you there to where – because let me tell you what it will do.

From someone who's done it, okay, it will increase your enjoyment of the purchase when it is not putting anything at risk, when it's it's when it doesn't even show up on the emotional bubble it will increase your enjoyment i love that i can't wait for that day well you are enjoying it you've got a lot of you've done some nice things you've been on some nice trips you've got you know you've been making a great income and so you've had the same thing it's just what what what makes it hard to process these things are the emotions because when you start you know because you start going 200,000 i mean you can't who needs that 200,000 that's what starts going through your head well i know

i don't need it but i definitely want it but i want it but you know and some of the other some of the stuff you and i do yes other people do is um you know, it's just a zero. Oh, yeah. It's just a decimal point and a zero. But what you want is you want ratios on items that are not producing wealth to be small. Yes. And then you could enjoy them. Yeah. No, you're absolutely right, Dave.

I mean, when I went and purchased my first dream car here a few months ago, it felt so good to walk in there, pay cash, leave, and not think about, did I make the right decision? Yeah. Like, I wasn't stressed. I still had a large savings account. I was still, I mean, it just felt so good to do that. And that's a dadgum nice car. Yes, sir. That you're driving.

It's beautiful. It's a nice car. It's a beautiful car. And so it wasn't a cheap car no sir it was not but you're in a position that you could do that and it didn't it didn't cause your stomach to get tight didn't cause your throat to get tight not at all you know or or it and it shouldn't you know and so that's the the measure it's not of a there is no amount of car that is immoral. Yes. There is no amount of car that is moral.

There is no amount of car that makes you unspiritual and that God doesn't love you because you bought an expensive car. That does not exist. Yes. But there is a—but what indicates whether you're off or not is have you put yourself in a position you cannot be outrageously generous? Have you put yourself in a position that you're living on the line? You're right on razor's edge? Yes. Then that's unwise.

And if done in an extreme, you put your family at risk, that is immoral. Yep. Those that don't take care of their own household first are worse than an unbeliever. So, you know, and so, but some of you are out there judging everybody else's stuff. Some of you are judging him right now. And you need to get back to minding your own business. This is the Dave Ramsey Solutions, Jonah joins us with a question. Hi, Jonah. How are you? Hi, Mr. Ramsey. Thank you very much for taking my question.

Sure. What's up? So in a little over a week, I'm going to be starting my college experience, and I'm in a very fortunate position to where I'm receiving $100,000 towards my college cost. Way to go. Thank you. However, through a number of merit aid scholarships, that four-year total is going to be about $50,000, meaning the residual is kind of up there. And that's my question is, in the four years that I'm in college,

what should I do with that $50,000 that remains? Where are you going to school that? Ole Miss. What are you studying? Chemical engineering with a potential double major in Mandarin Chinese. Of course. My goodness gracious.

Wow. Okay, that's fun. Well, here's the thing, Johnny. The amount of money you could make investing $50,000 pales in comparison to what your degree is worth in the marketplace. So you are a better investment than a mutual fund is. Now, granted, we don't need that $50,000, we don't think, for you to graduate without debt. But if the merit scholarships drop for some reason, this $50,000 sitting there not invested um it is uh or not trapped in something is worth more as an insurance policy on you getting through school without that than any amount of money

would make so let's say it made 10 sure okay so you'd make 5 000 bucks okay and you So you'd make $5,000. Okay. Yep. And so you'd make, in four years, you'd make $20,000. Correct. Which isn't spit compared to what you're going to be making. Absolutely. That would be my hope. Yeah. Well, I think that's fairly predictable with you, sir. So, you know, what you could make on that is not as good as making sure you get through debt-free.

So if you want to just park it in a mutual fund or in a money market account, you can. If you wanted to put it in a low-risk, low-volatility mutual fund of some kind, that's fine. But you could still lose some of it. I would not put it into a retirement account. I would not put it into a super long-term thing because then you're going to be tempted, if you get in a squeeze, to borrow instead of using that money. And again, you're the magic sauce, not investing. Investing long-term will become the magic sauce, but it'll come from your income that you're going to create.

So pretty incredible situation you got yourself into. Thank you, sir. This is neat. Your mom and dad did a great job. Obviously, with that much merit scholarship, you you got yourself into. Thank you, sir. This is neat. Your mom and dad did a great job. Obviously, with that much merit scholarship, you did a great job. So those are academics, a lot of them. Yes. Yeah. Okay. Very cool. So what is the deal with the Mandarin Chinese? You want to go on the mission field or something? No. So that's actually through a federally funded program at Ole Miss, this flagship Mandarin program. And so I've studied Chinese since middle school.

And it just so happens that as I was searching for college, that program popped up. And I was able to go there, visit them, and had a really good impression. And it seems as if they had a good impression of me and so but i mean you didn't have there wasn't like mixing that with chemical engineering in some way that you had a certain goal it's just you've enjoyed the language exactly oh okay all right that makes that makes sense i thought maybe the two together were taking us somewhere i didn't know what you were doing okay might might be international business of some kind, but, uh, wow. And, uh, what a great language to know in today's world too. So very cool. What a sharp young guy, man. Thanks for coming by. Thank you very much.

Open phones at 888-825-5225. Yvonne is with us in Baltimore. Hi, Yvonne. How are you? Hi, Dave. Thank you for taking my call. Sure. What's up? Right now, I'm in a mess because my mother, I had to stop working because my mom contracted dementia. She went into the hospital as herself for eye surgery and came up with dementia. She needed full-time care, so I'm retired. So I had to stop working to take care of her. And when I stopped working, I lived on credit cards. Since then, I have racked up $11,000 worth of credit card debt.

And I'm trying to get it together. So I called Consumer Credit Counseling. I called some debt negotiation programs. And I'm just not comfortable because they've won a lot of money. They try to give you a plan, but still they're making a lot of money off of me. I called one guy at National Debt Relief. He said they could help me cut 50% of the debt. Are you current on these bills?

I'm not current since Corona. I was doing monthly payments up until Corona. So you're three months behind? Three-month break, right, exactly. Probably now five months behind. Okay. I paid everything up until March. Okay, because that's the way these things work,

is they have you not pay the bill, and then they go in and try to settle in bulk, settle with a lump sum. So give me an example of one of your credit cards. How much do you owe on it? The highest one I owe would be Capital One. That's $5,000. Okay.

If you are five or eight months behind with Capital One and you call them up on a $5,000 balance and you offer them two, they'll probably take it. Oh, really? And that's how these programs work. Is there an offer like that? That's how these programs like that that's how these programs work yeah they take the money from you monthly until they have two thousand saved up after they collected all their dadgum fees out of your ear and then they then then they uh take the two

thousand and they offer to capital one to settle it now guess what that does what that's that messes up your, but your credit's already messed up. My credit's already jacked up, right? I'm trying to get it back together. Yeah. So you can work the exact same program with no fees. It's a hassle, and you're going to talk to some mean people called credit card collectors, and you're going to have some arguments to work your way through it.

It's not one phone call done, but you can work your way through this. It's only $11,000. When are you going back to work? I don't know. My mom, her dementia is progressing. It's really progressing, and I don't know. I don't know. How are you keeping the lights on and buying food?

I'm retiring, and I get a small pension. How much? After taxes and health care, I get about $1,400. And then your mom's Social Security? My mom gets Social Security. She gets about $600 Social Security. So you have a $2,000 budget. The two of you live in there.

Right. Okay. And then my mom has a lot of bills. That aren't getting paid either? Right. Okay. That's why I said I'm in a mess. Who's paying the rent? And I have so much going on mentally that I just wanted to just pay

one bill and consolidate everything. That's why I started calling... Well, you can't afford to do anything right now. By the time you guys eat and keep the lights on and pay your house payment or mom's house payment because you can't be evicted right now, you're out of money, aren't you? Yes, always in the negative. Yeah.

I just don't know where to turn. So you're running full-time care with her? Yes. Baby girl, you got your hands full for sure so i do say a prayer for me i will i will so if mom's dementia does not turn around it will probably eventually result in her passing is that correct i i hate to say it but yes yeah i'm sorry to say it, but yes. Yeah, I'm sorry to say it. I'm trying to see where your future is, and I don't want to be cold about that.

I'm trying to figure out when it is you can get your income back to be able to address these issues. In the meantime, I think these credit cards are just going to sit on the sideline until you're able to get your income back. Okay, because I want to go back to work. I just can't. I know. I'll work. I wasn't accusing you of being lazy, honey. Right, I know. I know.

I want to go back to work, but I just can't. Yeah. Well, what I'll try to do is call some of the credit card companies and see if they'll work with me. Do you have any money saved? No. Okay. No money saved. They see if they'll work with me. Do you have any money saved? No. Okay. No money saved.

They're not going to work with you then. You don't have anything to offer them. Right. That's what I'm saying. Yeah, you've got to have something to offer them before you can get settlements done. But when you get where you can save up, scratch up a little money, then we can go there. So, wow. I'm sorry.

Yeah. Hey, hold on. We're going to put you in Ramsey Plus while you're at home there, and that will get you through Financial Peace University and get you on a budget and help you walk through this. We'll walk through this with you, and we'll pay for it. This is The Dave Ramsey Show. our scripture of the day proverbs 4 25 let your eyes look directly forward and your gaze be straight before you. Martin Luther King Jr. said,

If you can't fly, then run. If you can't run, then walk. If you can't walk, then crawl. But whatever you do, you have to keep moving forward. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they'll remake your blinds.com they have a 100 satisfaction guarantee means even if you mismeasure you pick the wrong color they'll remake your blinds for free you get free samples free shipping and with the new promos they run every month you'll save even more use the promo code ramsey to get the best possible deal and today's question comes from Anita in Florida. She visits DaveRamsey.com to ask,

my interest is 5% on two of my federal student loans of $83,000. I consolidated when I graduated. I could qualify for two to maybe 3% mortgage loan. Would you recommend I refinance my current mortgage for 15 years, same as I have left and added an add to it. My current student loan. I have one hundred and one thousand dollars left in my house. My student loan repayment is for 25 years. I've been paying for 12 years and it's just not going down and keeps restarting when trying

new programs currently in an income based repayment plan. I don't see an end goal. Well, here's the thing, Anita. No. Okay. I'm not going to recommend that you add debt to your house. Okay. This means you're going to go back to baby step number two.

And when I go back, you're going to stay in baby step number two. And you just can get aggressively attacking your student loans now if you can refi your interest rate your home down to 15 years would sound like you have that left uh and a lower interest rate i don't know dave she has 15 years already on it now she's fine there yeah that's what i'm saying thinking about that now you're fine but no i do not want you to refi to put your student loans on top of your mortgage that that's a few foolish move in my opinion yeah the the a student loan is forgiven upon death a student federal student loan is a federal student loan is forgiven upon disability a mortgage is neither of those. So you lose those two benefits when you move it to a mortgage. Plus now you put your home at risk for an additional $83,000.

And foreclosure is what happens if you don't pay that. Now, so Anthony's first instincts are absolutely correct there. The thing I don't like what I'm hearing is 25 years, and I don't like hearing that you're on an income-based repayment plan. And so what I would challenge you to do is say, okay, this is $83,000. We don't have much information about your current situation, like your household income. But we have people do debt-free screams every single day on this show who paid off more than $83,000. Yes.

So it sounds like you may have an income problem. Yes. Extra jobs and or career changes, shifts, and what can we do to get your income up to where you don't have a 25-year plan, where you don't have an income-based repayment plan? Because here's the thing, $42,000, so what, $3,600 a month for two years, and you're out of debt. Now, that's a lot of money if you're not making any money but if you changed your income and you know young man we had on the air a while ago yep uh in a different hour yep paid off 47,000 in 13 months he was making 78 and when he started working on this he started working on his career and he got his income way up from 78 up to 125. And then he paid off $47,000 in 13 months. Do that two years and that's 83,000, right? Yeah. And guessing Dave, she graduated from college. So

I'm thinking she's making no less than 45, 50. Well, we don't know what she's doing. Yeah, we really don't. We're guessing, but I guess I am guessing also based on the hopeless sense of 25 years and the hopeless sense of income based repayment and the hopeless sense of those two things mean I'm going to be in debt my whole life. We have to break that. And the way we break that is we start putting three thousand dollars a month on this and you are done in two to three years. Absolutely. And that's from extra jobs and or career changes. I think this is more of an income based problem, income based problem and mind based project.

Yeah. Yeah. Budget in mind. I was, cause their last sentence says, I don't see any, I don't see an end goal. Yeah.

So you have to see it before. So you can believe it when you believe it. Now you get on the budget. Now you get your income up. Well, that's exactly the way to work yes sir so uh but you know it may mean that uh you know i talk to people all the time and what amounts to is they they took a position in a career field or they took a position

uh say for instance i talked to a lady with an accounting degree which has the ability to make 60 70 80 thousand dollars a year but she wanted her heart she wanted to work for a non-profit and so she's making thirty thousand dollars well she's under utilizing her income potential and so that choice is what has her trapped yes yes she can clean up the student loans and then work non-profit or she can clean up the student loans and then work non-profit or she can clean up the student loans and work and volunteer at a non-profit while she keeps an eighty thousand dollar a year job yeah you know and volunteer on the side for that that kind of a thing so what you've got to do is you just have to think through what choices have i made that have put

me in this situation i i almost always can find some way to help you get your income up, and that is half of the equation. It's income and outgo. These are the only two parts of it. Ann is with us, and Ann is in Atlanta. Hi, Ann. How are you? Hi, Mr. Ramsey.

How are you? Better than I deserve. What's up? So, I'm 48 years old, just got married four months ago, and have very little money in my retirement. He doesn't have a retirement fund. My daughter is coming to our last semester in college, and I'm facing $70,000 of parental loan debt. I don't know if I should focus on the parental loan debt, put a pause on the traction I was making with my retirement fund. I have a Roth IRA and I contribute right now $500 a month to that IRA, just trying to get back on track with retirement. So I just don't know what

direction I should go in because retiring with no money frightens me. Good. That's going to make you do something about it. So what's your household income now that you are married? Sure. Good question. So I make $125,000 a year. He is self-employed, but he relocated his home renovation business to Atlanta to marry me. So he is starting over. Okay.

What did he make in his old city last year? Sure. Last year he made $100,000. Okay. So he'll be back there pretty quick. He knows how to do that. So you're going to have a $225,000 household income. Hopefully, yes.

Yeah, you will. So how can we not pay off 75 000 real fast with that now that you say it that way that seems easy you'll be living on i mean once his income comes up and as his income is coming up i mean like for instance this year if he made zero and you paid off 75 000 125 minus 75 in that 50 hello yes yeah okay 125 minus 75 is 50 and so you could live on 50,000 and you'd be debt-free in one year and that gives you plenty of time to build retirement with a two hundred and some thousand dollar income going forward okay because i've been i've been fortunate i've kept my like credit card debt is only five thousand i have a car it's only four thousand left on the car so i've been keeping that debt as low as possible now you need to clear your debts because that's your shortest

path to wealth okay and so we teach you to work the debt snowball and be debt-free everything but the house first. Right, Anthony? Yes, sir. Everything but the house first. Go ahead and line up from smallest to largest. So get that cleaned up and you'll be all right. You know what?

I'm going to send you a copy of the book, The Total Money Makeover as a wedding gift. And it'll show you exactly what to do step by step. That'll get you going. Anthony, good job today. Hey, thank you, Dave. That puts this hour of The Dave Ramsey Show in the books. We will be back with you. Before you know it, in the meantime, remember,

there is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.