The Ramsey Show - App - Cars Are a Financial Trap! (Hour 1)

Episode Date: November 10, 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 am Dave Ramsey, your host, Chris Hogan. Ramsey personality, number one best-selling author two times over, is my co-host this hour as we talk to you about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225.

Jose is in Tucson, Arizona to start us off this hour. Hey, Jose, what's up? Hey, how's it going, Dave? I am a big fan of YouTube. It's an honor talking to you guys. Well, thank you, sir. How can we help? Okay, so I just recently got, I am signing up for life insurance through Zender Insurance, and so I am no longer together with my son's mother. She is out of state, and I did not want to put him as a beneficiary. So my question is, I was listening to you, and you said that trusts are not really a good idea unless you have lots of money and it's kind of a trouble to handle them so i was wondering should i have

my sister or one of my siblings as the beneficiary and put them give them instructions on my will on how to provide for my child until he turns 18 now we do we do use a trust for this situation, but it's only formed upon your death. And so upon your death, the beneficiary is the Jose Sons Trust, or whatever you name the thing. That's the beneficiary on the life insurance policy. And then you have already designed the terms of the trust, how the money is to be invested, how it's to be handled for the good of him. And you can set your sister up as the trustee. Who would your son go to live with were you to pass away?

He would go out of state with his mother. Okay. He is almost four. Okay. Then, yeah, you would set your sister up as the trustee, and then you can put all kinds of terms in the trust. That's right. You sure can, Jose. You can control a lot. And the reason you want to do that is, you know, your sister can be the trustee with clear terms of what you're wanting,

but you would also develop what's called a contingency trustee. This is the person that would be the backup if something were to happen to your sister. Yeah, the successor trustee on that but the you know so you just you do your normal will and the will would state that upon your death a trust is formed and give it a name each trust needs a name um and uh and it'll be funded by this life insurance proceeds uh and then you you change your will when the child becomes old enough that you would just leave the money directly to the child, meaning like when he's 21. Right, right, okay.

Okay, so will and trustee. Okay, and if my brother would be the backup? Yeah, that'd be fine. It's just someone that you trust to carry out your wishes. Okay, and they would have to follow what my will says to the letter, right? What the trust says. Okay. Yeah, and if they don't, they would be liable to be sued by your son later.

Because they're going to act in his best interest according to the terms of the trust. For instance, when our kids were minors, Jose, that trust is no longer in our will because our children are grown. But it was said if something happened to both Sharon and I, we were married, of course, at the time, if something happened to both of us, the money would be left into a trust for their good, for the good of the three kids in our case. And it said things like the money is to be invested in four types of mutual funds with a 10-year track record. It's growth, growth and income, aggressive growth and international, like we do our investing. So we knew that the money would create an income then. And then the income off of the trust is to present X number of dollars to the person

taking care of the child. So you would send the equivalent of child support to the boy's mom, okay, to help take care of him. And then beyond that, we can take some of it. You can let a certain amount be there out of that, or you can do it however you want to do it. You can figure out a calculation. Then we said, you know, the only time money can be taken

out of the trust other than that is for a medical need maybe a car when they're a teenager and then college and then when after college when they graduate the money is the trust is to be turned over to them the money in the trust is to be turned over the child that's how ours was set up but we were very specific on the investing and and we were very specific on what the money could be used for, and then it's there to support the child in the growing up years. Yeah, you can have all kinds of control from the trust. I mean, you can set it up to where they get certain money, dollar amounts at certain ages. Dave, I remember I coached a lady years ago, and she, her and her husband had amassed a fortune around $5 million, and she determined that every had amassed a fortune around $5 million,

and she determined that every two years her kids needed to go back through Financial Peace University or they weren't getting their disbursement. And it was just one of those things. She wanted them to constantly be reminded of how to handle it the right way. Wow. And I told her, I said, you can rightfully put that in the terms. It's your money. Absolutely. You can do that.

I didn't do that, and I started Financial Peace University, but there you go. It's your money. Absolutely. You can do that. I didn't do that, and I started Financial Peace University, but there you go. It's not a bad idea. I like this. Melissa's in New York City. Hi, Melissa. How are you? Good, good. Thank you for taking my call. I've been following you guys for a long time, so thank you. How can we help? Question for you. My husband is retiring in the next six months, the mid part of next year. He's been at the same company for 35 years. He will be 55. My question is, is they're giving him two options, either a lump sum payout or pension payments. And we really are torn between the two.

Okay. I know what we're leaning towards. Yeah, it's easy. It's really easy easy i say take the lump sum exactly and you roll it into an ira there are no taxes on it okay let me answer another question this is the stipulation now this is what brings us online his employer the stipulation with the employer is they will we in order to get that lump sum, we have to go through a financial advisor or a financial group of some sort. They're going to cut the check to that financial group or that financial advisor, whoever we choose. That's interesting. Well, that's what we want you to do anyway, because if they cut the check to you,

they have to withhold 20% on it, and the entire amount becomes taxable. Okay? So we do want them to cut the check to your new IRA, is what it is. It's actually not to the financial advisor, but it's the IRA that the financial advisor arranges, and it's called a direct transfer rollover. So how much is this lump sum, Melissa? Transfer. Sorry, rollover.

That's okay. A direct transfer rollover. Direct transfer rollover. Transfer. Sorry. Rollover. That's okay. A direct transfer rollover. Yeah. Direct transfer rollover. Okay. $1.7 million. Oh, that's amazing. Absolutely. Thank you. Way to go. I'm proud of you. We keep watching you very closely because the better the market does, the bigger the payout. And then he says that if it goes up, like if it does go up more so in like February or March, he's going to cut the deal right then and there because we can't neglect, you know, a couple hundred thousand dollars. Yeah, absolutely. And I think that even if we've made 1.5, I still think we would have taken it.

You need to take it. You need to take it every time. Here's why. Here's why. When he dies, they keep it. That's right. If it's in the pension. So it's a $1.7 million swing on the decision.

But even if it's $1.5 million, take it? Take it. Yes. If it's $0.5 million, take it. Easy man. Because it doesn't survive him. Yeah. And you invest it.

Get with a SmartVestor Pro at DaveRamsey.com, and they'll help you do that direct transfer rollover. This is the Dave Ramsey Show. I get the privilege every day to talk to smart, creative entrepreneurs doing great things for our economy. GRIP6 is no exception. BJ and the great team at GRIP6 know how to truly create smart products that are unique and makes everyone's life a little easier.

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in the U.S. Give these products as gifts this season. To get the Dave Ramsey special,, is my co-host this hour. Open phones at 888-825-5225. Dan is with us. Dan's in New York City. Hi, Dan. How are you?

Hi, Dave. Hi, Chris. How's it going? Thanks for taking my call. Certainly. How can we help? Well, me and my wife will be having a baby in May of next year. Yay!

So basically, I'm looking to get some insight on the best way and how soon to get the baby set up. Right now, I just have jotted down in front of me 529, opening an index fund in the baby's name, maybe putting the baby as an authorized user on my credit. How soon and of these things, which one should I go for? The last one, never. They should never be an authorized user on your credit you can't you can't form a 529 i'm sorry not as far as like you know giving them access to a card when they're older but just to have them build credit i don't want them to build credit

because i don't want them to go into debt okay yeah i mean i do fully understand your your views on credit cards but i was just wondering if that was like uh just something good for them you know no yeah you can't understand it because you're suggesting it okay okay yeah yeah yeah just wanted to uh no but for real that fico score all it measures is how much debt you have how long you've had it the type it is and the likelihood of them giving you more so i I don't want your kid to, I want you to grow up, I want them to be weird. I want them to never know debt because their daddy had his act together. So as far as the 529, he has to be born and you have to have a social security number. So you can apply for the social security

number after the child is born and then you can open the 529 or an ESA or an index fund. In all cases, you will be the custodian, and the account is open in the child's name, but you're in control of it. And so I would just start with the 529. I wouldn't fool with an index fund. Let's go ahead and get the 529 going as a good step. And that's only if you are at baby step five, meaning that you're out of debt and so forth. And Dave, I know I've heard you say this, but I want to reiterate for people out there.

If someone is in debt and they're considering adding to their family, are you telling them to wait until they're out of debt before they add to their family? No. I know that. I just wanted you to say it again. We don't pick marriages or babies based on whether we're in debt or not. Right. But in all cases, whether you're married or not, whether you're having babies or not, you need to be working your way through a plan to get out of debt and build wealth in every case. So that's what we're going after.

And so in Dan's case, it's pretty simple. The only thing I would do of the three things he was asking about is I would do the 529 and get that started if you're at baby step five. The great news is he's obviously going to be a great dad because he's thinking about all these things. He's intentional. And overall, the best thing you could do for the kid is to get through those steps. Like keep working the plan yourself and don't do anything that puts you going backwards at all.

That allows you to make progress for yourself and this baby. Congratulations, Dan. That's awesome. Mitchell is in Chattanooga. Hi, Mitchell. How are you? Good, Dave. Hi, Chris.

So over COVID, I became an insurance broker, and I found Art Williams, and through him I found you. And my question is, I've never been a 1099 contractor, but I'm also still working part-time as a W-2 employee, and I don't know how I'm supposed to file for both or file one at a time. I don't know how to start with that. Well, I'd probably get a tax professional to help you do it, but it's fairly simple. As a 1099, you're self-employed, and it's a sole proprietorship of a business.

And so you have the W-2 portion of a standard tax return, and then you just fill in what's called a Schedule C. And Schedule C lists the income onto 1099 and any expenses associated with your business. And the difference is called profit and the difference is taxable. Okay, great. That's all I wanted to know. Thank you so much. No, Mitchell, thank you for reaching out because a lot of people are going to find themselves in that situation, Dave.

When we at one point had 58 million people unemployed, you know, had people that are working hustles and side hustles. And so you start to get these tax forms in, keep them in one place, but you want to reach out and deal with a professional that can guide you the right way. And I know our tax endorsed local providers, these are people that are in this game all the time and they know exactly what they're doing. Yeah, that's what I do, Mitchell. I just check on one of those because here's the thing, you may be able to write off some things that you don't know about and you may not be able to write off some things you think you can.

And so it's worth it if you've got a Schedule C, if you've got some self-employed stuff to get a pro on it, just click ELP at DaveRamsey.com and those guys will help you get that done. But it's a fairly simple process. It's basically a little profit and loss statement is what the Schedule C is. It's your income for your business minus the expenses for your business equals the profit or the taxable income of your business. Ricky's in Louisville, Kentucky. Hi, Ricky. Welcome to the Dave Ramsey Show. Thank you.

Hi, Dave. How are you? Great, man. How can Chris and I help? Well, I made a mistake, and I had bought a car. I'm a little more on than it's worth right now, and I'm trying to figure out the best option to, because I'm working on baby step one,

and I'm trying to find the best option to, I guess, get rid of the car without having to voluntarily surrender it so I can get a $1,000 car to roll with and save my stuff up and pay my debts off. Okay. So how much do you owe on the car? Right about $11,000. And what's it worth? Looking at Kelly Blue Book, it came out around $6,000.

Did you roll over another car loan on top of this loan? I did not. Did you roll over another car loan on top of this loan? I did not. How did you overpay that much for the car? I think I was just desperate to get a car, and I wasn't really looking at what I needed to do. So the Kelley Blue Book was a trade-in value or a private sale value? To be honest, I'm not 100% certain on that one. I think it was, I can't tell you, to be honest.

You're looking for private sale, which is more than trade-in. Trade-in is what a dealer will give you for it. And so what is your income? Eight fluctuates right now. I'm on a 1099 income, but I'm averaging probably about 800 a week on that. Okay. You know, you're so far upside down. If this number is accurate, if that is the actual private sale number,

and you're $5,000 or $6,000 in the hole, 50% on this thing, it's only $11,000. You're making $50,000 a year. I would go ahead and just pay it off. I would just put it in your debt snowball and attack it and get it paid off because I don't think trading out of it is going to do you that much good. If you trade out of it, you're moving from a $5,000 car to a $1,000 car, and you've still got a $6,000 debt because you've got to borrow the difference.

That makes sense. So by the time you do all of that, I just pay off the $11,000. Yeah, just get it out of your life, Ricky. Dave, he had to have looked at the trade-in. I mean, that just sounds too far off. That or he got screwed. I mean, I don't know which it was. Well, that's possible. It's too far off. That or he got screwed. Well. I mean, I don't know which it was. Well, that's possible.

It's very possible. But, listen, you throw your shoulders back, start to get intentional, and, you know, you're already looking, Ricky, at ways of bringing in money. You keep hustling. Just get this thing out of your life, but just take care of it, right? You want this thing to continue to run so you can continue to make money. Yeah, that's exactly right. Open phones at 888-825-5225. Chris Hogan, Ramsey Personality, is my co-host today here on the air. Chris,

I think cars, we don't talk enough about cars. They are, I love cars. I'm a car guy, but they are a financial trap. Oh, my goodness. And, Dave, not only is it a trap, but it can catch you at the most inopportune time. I remember back years ago, PD, pre-Dave, I did this stupid. I went looking. Y'all ever gone looking? You just go browsing. You didn't intend to buy, but you go looking, and guess what comes home with you?

It's like petting a stray dog. It'll follow you home. It'll follow you home. It'll follow me home. The vehicle came and a payment. So guess what? I don't go look now. I don't browse. So be careful what you look at, because you can do some stupid.

I go to buy. That's right. There's a difference. Cash, baby. Cash. Is king. This is the Dave Ramsey Solutions Lobby. Alpha and Jacint are with us. On the debt-free stage. Right here in the Ramsey Solutions lobby.

Alpha and Jacint are with us. Hey, guys, how are you? Hello. We're good. Welcome. Where do you guys live? Las Vegas, Nevada. Nice trip over to Nashville, huh?

It was nice. Well, it's good to have you guys. And here to do your debt-free screams. How much have you paid off? So we paid off combined $130,000 in three years. $130,000. Okay. Now explain this to me.

Combined. You were. So we were not together. I started my debt-free journey in 2017. And then I met Alpha a few years back. And so I finished paying off my $90,000 in May of this year. And then he paid off his $40,000 before we got married. It started in January.

Okay. And when were you married? October 26th. So we have two debt-free screams. Yeah. Officially. All right. Alpha, did she encourage you to get started?

Tell the truth. So to be honest, how it went was i i you know when you're a man you want to throw things out to see if you can get her to start thinking about marriage and get a response yeah and before i can even get the words out my mouth she says i'm not marrying you with that whoa just like that so it was more than encouragement it was it was uh inspiration it was more than encouragement. It was inspiration. It was a whole lot. It changed my life a great deal. Serious carrot right there, dangling right there.

Man, I'm telling you. Very cool. How did you get so feisty about this money stuff? Well, you know, I had some life happen to me in about 2014. And then when I came to in 2017, I said, I have a decision to make. I can keep going the way that I'm going or I can get back on track because I actually knew being in debt was never a good idea. I actually saw Dave at Central Christian when I was about 18 or 19, started the book more than enough and got to the integrity part. And I thought it was so good.

I just stopped reading the book. But the plan was in the back of the book. So so I, you know, I got off track. I didn't have a plan, got into debt and then kind of came to in 2017 said, okay, it would be really nice to be debt free. And then I thought, when would it be nice to be debt free by? I was like, well, let's see if we can be debt free by 30. And so I made the decision and then I started creating the plan because in 2016, I only made $17,800. So I ended up tripling my income within the next year because of the decision and the focused intensity.

Okay. So let's break these down to start with. Just say you paid off by yourself before you're married. How much? Over $90,000. 90,000 bucks. And that took you how long? Three years.

Three years. Okay. And your range of income during that time? From $17,000 to over $60,000. Wow. And what do you do for a living? I'm a licensed marriage and family therapist and a whole bunch of other things. Very cool. And your $90,000 was what? Student loans and credit card debt. Okay. Very cool. And then then Alpha, you paid off 40. Just under 40, yes. And you did that in about just a few months, right? Correct. I started in

January and I was complete by August. Okay, so eight months. All right, very cool. And your range of income during that time? Anywhere between 28 and then I ended making 65. Cool. And what do you do for a living? I'm an educator and a whole lot of other things as well. Okay. All right. Lots of side hustles with the two of you. Absolutely.

Okay. Very cool, guys. So that's the $130,000 is the $90,000 and $40,000 combined. Yep. But they were done separately, and then we tie the knot, and you got married in October, you said, right? Correct. Wow.

Very cool. This is so fun. I'm assuming this wedding was done debt free. Oh. Okay, alright. Never again. You said never again. She wouldn't marry him if he had debt. She ain't getting married on debt.

You don't even need to check that. I'm proud of you two. Seriously, I mean, just the level of focus and what you did and the amount of time, it paves the way for you now. You know, you've got opportunities in front of you instead of debt and obstacles. Man, amazing. Yes.

Very, very cool. Yeah, the snowball's rolling in the other direction now. So watching the account stack up is actually kind of amazing. You know, you have to blink your eyes a couple of times like, wait a minute, now all the money we were throwing on debt is now ours and now we you know we hope to save to pay for a house cash so sure pretty ambitious on this end you got it you can do it okay now i'm interested a marriage and family therapist is in love and still draws this hardcore boundary not marrying you till you got rid of the debt. Why? Well, you know, I really wanted to be weird, if that makes sense, personally.

And then in joining my life with another person, I would hope to be with someone who could match, you know, match my level of intensity in some way, shape or form. And so to me, it's kind of being able to accomplish something before we even get married. So that's our first accomplishment as a couple is going into our marriage debt free. And I grew up with, you know, a lot of really supportive, great family. And I want to honor the people that came before me and leave a legacy for the younger people behind me. Because when I was seven or when I was 27, I didn't have kids and I wasn't married, but I thought, what's the best way to prepare if God, you know, blesses me in that position? And so I thought, okay, well, right now I can do my best to get myself in a good situation so that if I join with someone else, I can go

in as prepared as possible. And so, yeah, that's really what it came down to. And now I am married and have a bonus daughter. So it kind of worked out. Okay. All right. So, Jacint, you have a daughter from previous? Alpha has a daughter. Alpha.

I'm sorry. I got that. I'm sorry. It's not our daughter. Okay. Right. She's your daughter. Okay.

Is she with you? She's here. Okay. And what's her name? Her name is Adama. Oh. Oh, she's beautiful. Okay. And how she with you? She's here. Okay. And what's her name? Her name is Adama. Oh, she's beautiful. And how old is she? She's eight years old.

Okay. Very cool. Awesome. So has she been practicing a debt-free scheme? Does she know how to do this? Yeah. We had her prep. Maybe a little bit. All right. Very good. All right. So tell us, what is the key to getting out of debt, each of you? Sticking to the plan, staying focused, staying determined. It's interesting because there were times when I had lots of money coming in, big checks, five here, 15 here, and I'd bring it home and I'd look at it

and then Jacint would call me and say, okay, you got this money, what are you going to do with it? And you know there's all kinds of things you can buy. Oh, yeah. My TV's down. I need to get tents on the car. She's like, just put the whole thing on the debt. And sometimes at first that's very difficult.

Yeah. It's very difficult. Yeah, it is. So once I got over that hump, that broken mentality, that neglectful way of thinking with money, it was kind of easy after that. Once I put that first big lump sum down, everything just followed through then. And I'm thinking about my offspring. I'm thinking about the future. I'm thinking about what we want to accomplish later as well.

I don't want to get married. I got to get rid of this debt. Absolutely. Extremely motivated. accomplished later as well. The thing about, I don't want to get married. I got to get rid of this debt. Absolutely. Extremely motivated. It's funny because I, one day he was talking about adding on more side hustles and I was like,

what are you talking, what are you talking about? And he's like, can you be quiet? I'm trying to marry you. He's like, so he was so focused and I was like,

oh, oh, that's what you're doing. And I haven't even told him that when he said he was going to pay off his debt and gave the deadline, I, it wasn't that I was skeptical in that I didn't believe he could do it.

But it was just he paid the majority of it in like two, three months. So I think that, you know, what you've mentioned about focused intensity times God is unstoppable momentum. And the things that happen when you make a decision and commit yourself to that are incredible. Like you can't even make the stuff up. Amen. You guys are a powerhouse, man. You guys are heroes. I'm so honored to meet you.

Very, very well done. Very well done. And I like that phrase, neglectful thinking. I had to abandon that neglectful thinking. That's a powerful phrase. It really is. Well done. All right.

Adama, you ready? You ready you ready you ready all right alpha and jacent i'm just going to total it together we heard the story they did it separately but now they're together 130 000 paid off in three years his portion in eight months making 17 to 60 for her 28 for her, $28 to $65 for him, from Las Vegas, Nevada. Count it down. Let's hear a debt-free scream. Three, two, one. We are debt-free!

Yeah! Yeah! Fantastic. Very well done. Fantastic. Man, that's incredible. Very well done. Man, that's incredible. It really is. They are powerful. My goodness.

It just shows you, Dave, the power of making decisions and the right people around you, what you can make happen. Yep. Good stuff. It is. Man. Watch out for them. They're going to make some stuff happen.

This is The Dave Ramsey Show. We'll be right back. Chris Hogan Ramsey personality is my co-host today here on the air. Open phones at 888-825-5225. David is with us in Chicago. Hi, David. Welcome to the Dave Ramsey Show. Hey, good afternoon, Dave and Chris. It's an absolute pleasure. Absolutely.

How can we help, brother? Hey, so I work for a large manufacturing company with locations throughout the U.S. and I aspire to be in management. And the company culture is to every three to five years go to a different division and a different position and role. And so with that cadence, I am debt-free, but I'm looking for some guidance on renting versus buying as you're climbing the ladder of a career. Most of the time with a three- to a five-year range, you would buy. The only thing you don't want to do is to buy in a market where the – I mean in a city where the real estate market is stagnant.

And so, you know, like, for instance, if you're going in and you say, well, I've got a four-year window at this city, you would ask the real estate agent for some indicators of how hot the market is. What's the, in the neighborhood that I'm looking in, in what's the dom the average days on the market how fast does a house sell and if you hear 28 days and you got a real hot market if you hear 280 days it takes nine months no we're not that's a slow stagnant market uh in that case and the other thing you want to ask them about is about appreciation during that time how much is the house going to go up in value or how much much of homes in that area, in that neighborhood, gone up in value?

They can pull those stats from the MLS very quickly. It's not hard to do. And so if you've got, usually they run together, by the way. If you've got a real hot market and the houses sell quickly, then usually you have a good high appreciation, the things going up enough per year that you'll make enough on the house to not only pay the expenses but make a profit. And, of course, if you live there five years, then that's it. If you ended up changing jobs and staying, then that's it too.

So you're owning the house the whole time. Now, if you're going to be there only two years, you're going to find some markets where you're not there enough to – the house won't go up enough in value, you'd end up losing money selling it, even if it was a hot market. Right. Yeah. And David, the other thing I'd remind you to do, and this is what's gotten a lot of

people into trouble, is as they buy a house and they move because they're transferred, they try to hold on to that house and then have it as a rental property. Well, again, you don't want to go that route. So the thing I would tell you is to make sure if you are going to be there over that two years or that three-year window, just make sure you sell said house before you move on to the next one. Okay. Yeah, that sounds good.

I've had that idea before, so that clears that up. Yeah. Very good, man. Hey, thank you for the call. That's some good questions. He is. He's thinking. Sam's in Baltimore, Maryland. Hey, Sam, welcome to the Dave Ramsey Show. Hey, thank you for the call. That's some good questions. He is. He's thinking. Sam's in Baltimore, Maryland.

Hey, Sam, welcome to the Dave Ramsey Show. Hey, Dave. How's it going? Better than I deserve. How can we help? All right. So the short and sweet of it is I have a car. I'd like to sell it, buy something in cash with the proceeds of the sale of the vehicle

because I have some positive equity in it, and then use the money that would have went to monthly payments for the next three years to pay down debt and to go towards retirement. The problem is my wife doesn't want me to do that. Your wife doesn't want to get out of debt? Well, her opinion is we're going to get out of debt quick enough without having to do that, and she thinks I'll be unhappy if I get rid of my car. I kind of agree with her, but also I think logically

and watching your show over the last couple weeks just got you in India. It makes more sense to get rid of the car. How long have you been married, Sam? 11 years. Okay. And what other debt do you have outside of the car? So we have $25,000 in credit cards. We have a debt consolidation loan that's about $15,000.

I will say this. We have about $30,000 in inheritance that we should be receiving in the next month or so. So that's essentially going to knock it down to about $10,000 left. We have a really good income also. So we make about $235,000 annually. What do you owe on the car? So the car, I owe $32,000. My multi-payments are about 690. I could sell it, and the value of the car is about 50, so I'd have just under about $20,000 to buy something used. Why do you have so much supposed vehicle equity?

Did you put a lot down on this thing, or did you get a great deal? Yes. Well, both. Yeah. Put a lot down on it. I'm pretty decent at negotiating, and um yeah put a lot down on it and i had quite a bit down okay uh so let me get this straight after the inheritance comes in you have a thirty two thousand dollar car payment and you have a ten thousand dollar debt forty two thousand and you make 250 uh two thirty about 235 okay my wife also has a car that's $30,000.

That's a 0% interest rate. We just got that. We actually put quite a bit down on that as well. So I figured I'd throw that in the picture too. Okay. So do you have any other debt other than we've heard so far? It was like $1,000 she still owes for student loans. That can be paid off pretty quick.

And we have a surplus every month of like around $5,000 after taxes and gas and groceries and bills and stuff. So that's what I'm saying. We can pay these, the loans down, but I'd rather, even if we didn't have any debt, I'd rather take that extra money every month at $690 and put more towards retirement. Okay. Here's what I'm hearing. You're not doing a detailed written budget and both of you are not

agreeing on it because you're just taking broad swings at these numbers as I'm asking you these questions. That's number one. Number two, she and you are not on the same page on how important it is to get out of debt, and there is no intensity. It's just something you're kind of wandering along poking at. I absolutely agree with the second thing. The first one, we do actually have a pretty good budget. Well, you suck at it then because out of $235,000,

you only found $60,000 freed up. I know. You need to tighten that puppy up. That tells me there's no intensity. You are right about that for sure. Yeah, that's what I meant. That's why I thought you didn't have a budget because that's not enough. I mean, you should – here's the thing.

If you guys – I think if you were intense and both of you were dialed in and you were willing to sacrifice, I'd say you keep both cars, pay them through. You're going to be done really, really fast. It's only $70,000 out of $235,000. You should have that done in like nine months or eight months. And then, yeah, I wouldn't move down out of that car making that kind of money. I'd stay right there in that car. And you like the car.

You did say that. So I would agree with her then i do not agree with her not being intense on getting out of debt and thinking you're going to wander your butt out of it in the next three years making a quarter of a million dollars a year so her suggestion with her lack of intensity don't go together so you need to decide which one you're going to be if you want to be intense and focused and be done with it in seven or eight months keep them both and pay them off and both of you roll up your sleeves and get on beans and rice and get this mess cleaned up and then you've got more than 790 you got her car payment your car payment no payments all of that

to invest and you move right on up into baby step you will free it up and that's really what you ought to do yeah but if you're going to wander around in this crap for three or four years and just be you know half butt doing it then you know yeah sell the car sell it all sell her car too yeah but i think you know sam you sitting down and talking with her and finding out what's the hesitation what's the thing that's going on and and really get connected. Like, you guys, you've got too much of an income coming in to be wandering around in this situation. And here's the problem. If you don't put some guidelines in place, you guys will add a boat, a motorcycle, and a bigger home in a matter of years. And you look up, and you will really be wondering what happened.

So it's time to wake up, buddy. You guys get connected. This is Turn Up the Heat. You guys are going to get on the same page on that part of it and because the problem is you're running out down two different tracks and so you're coming to two different conclusions and and that you know that's what's happening so there's there's not a right or a wrong answer in in this moment the right answer is when we get on the same track that's going to give you the you're going to have a parallel conclusion then yeah and uh you'll both be going yeah sell the car or don't sell the car i don't think you need to sell it i think you need to get

both of you get intense both of you get sacrificial and just get the dadgum mess cleaned up that's what i would do if i were in your shoes hey man we appreciate you listening thanks for calling in chris hogan good hour thank you sir it was fun james childs our producer kelly daniel our social producer and phone screener i I'm Dave Ramsey, your host. And we'll be back. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes or head to DaveRamsey.com.

Thanks for listening.