The Ramsey Show - App - Changing Everything to Become Debt-Free (Hour 3)

Episode Date: July 11, 2018

The show about you

Live from the headquarters of Ramsey Solutions, 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. Thanks for being here, America. It's a free call at 888-825-5225. That's 888-825-5225. Matthew starts off this hour in Wichita. Hey, Matthew, how are you? I'm doing great, Dave.

Thank you. How are you? Better than I deserve. What's up? Okay, so we've been kind of we're in a position where we started the baby steps. That's a thousand dollars away. We've eliminated credit card debt. We still have about $70,000 worth of debt.

My wife just received, I guess, an inheritance of about 360,000. That's all in stock. There's a little cash and we don't want to mess it up. We're sick and tired and we just want to live a good life and help people have you cut up your credit cards uh yeah they're done okay we have one debit card and and that's it who left her the money who passed um her grandfather who was a World War II Korean War vet, he put it in an LP years ago. And basically, we took the dividends off of that so he could live. And he just passed last week. And we just want to make sure we're going to split the LP up, but we want to make sure we're not making a mistake in what to do.

So she's going to have $360,000 in stock? Mm-hmm. Okay. And there will be probably $40,000 or $50,000 in cash. That would just make the account that he had. Well, I mean, technically the proper thing to do would be to walk right up the baby steps with the cash. Okay. So we would pay off the $70,000.

That leaves me $290,000. I would build an emergency fund of three to six months of expenses. What's your household income? Right around between $90,000 and $100,000. Okay. So, I mean, we set aside $20,000 for your emergency fund or something. Something, let's just use that, leaves $270,000. Okay.

And do you owe any money on your home? No, we rent actually right now, leaves $270,000. Okay. And do you owe any money on your home? No, we rent actually right now, so that's my next question. Do you have children? Yes, we do. We have an 18-year-old that we've cash flowed his college. He's got a truck he bought and paid for. He takes care of it. So we're teaching them as well.

Good. And we have a 15-year-old daughter. Okay. So we need to set some of the money aside for college yes okay and um i'd start putting 15 of my income into retirement at that point um and i'd set some money aside for college and i'd pay cash for a house you get a pretty good you get a pretty good house for 200 grand and what you talking no for sure i totally agree but do i just lower my head and and don't touch the big chunk of money in the stocks and put that with somebody?

No. No, you buy a house. You buy a house and you pay cash for a house. And then just lower our heads and live like no one else. Take what used to be payments on $70,000 worth of debt, what used to be cash flow in college that was a problem, and now you've got the money set aside for college, and take what used to be a house payment or rent payment or what would have been out of a $90,000 income, a house payment, and you take all of that and you max out your retirements and you start investing like a crazy man.

And, you know, you'll have that $300,000 back in about four years probably. Okay, next question is, I've made bad decisions, got two leases. My wife's lease is up in three or four months. I guess the payoff on the lease is $3,700. Is that in the $70,000? Yeah, that would be if we bought that car, and I don't really want to. I think we can get rid of both cars that are worth about $50, and get ten thousand dollar cars or something like that i don't care what you get just pay cash for it okay and the 70 000 covers all that doesn't it it does but i still feel like

that i could reduce and drive something simpler instead of a twenty thousand dollar truck i could get like a seven eight thousand dollar truck and make work. I'm okay if you pay cash for it and you pay it all off and you end up with a paid-for home and you're maxing out all your retirements and you're living on a budget and you're giving and you're investing for the rest of your life and you got your kid's college taken care of. I'm okay if you drive a $20,000 truck making $90,000. We're just sick of it. We are totally sick of it.

We've seen you live and we're just sick of it we are totally sick of it we've seen we've seen you live and we're just ready we're ready to do this you can do whatever you want to do but you know i want to give you permission to drive a decent car um because you're well on your way to be a millionaire okay at this stage because we just wanted to be a blessing you will you can be and you you know it's okay i mean there's nothing nothing wrong with the ten thousand dollar truck it's not a bad thing you're not doing anything wrong nothing wrong with the twenty thousand dollar truck when you make 90 though and everything's paid for okay so one way you can kind of do an acid test against this too is say all right you knew her grandpa she knew her grandpa when everything is paid for the house is paid for there's zero debt we're investing

steadily the kids college is taken care of there's emergency fund in place is grandpa in heaven smiling does he think that's cool he's doing backflips yeah he's elated he that tells you you know that tells you did the right thing you did the right thing okay for two reasons one is he's a guy that somehow managed to leave her 360 000 so he wasn't too bad with money but number two you're honoring his memory by doing something he would have wanted you to do with it which is use some dadgum common sense right right because that's who he was and so you know you're doing the right stuff so all i did there though man was i just walked you right up those baby steps,

and you know them, don't you? I do, I do. I just wanted some reassurance. Yeah, it's all dialed in. So, you know, what I'm saying is by spring, you live in a paid-for house. Okay. The kid's college is completely set aside. You're 100% debt-free, and you have your emergency fund in place,

and you're maxing out all of your retirement accounts, and you're living on a budget for the rest of your life so that you invest now, in addition to that, a house payment that you don't have, so you're going to invest it. Just not having a house payment will make you a millionaire. If you invest what used to be a house payment, that turns you into a millionaire. You see what I'm doing? Yeah, it's amazing. Yeah, you're going to be there, man.

And this guy has, this grandpa changed his family tree because you guys have some sense. And you're not going to waste $360 360 000 like some stupid lotto winner or something you know you're actually going to apply the money in a wise methodology that's going to you know bless your children his great-grandchildren and you know here we go again and you guys are starting to become that family old man v Vanderbilt started it, right? Old Man Rockefeller started it. Somebody got to start it at your place. Old Man Ramsey started it right here.

I'm now the old man, right? And that's the thing. So that's how you look at it. Well done. Well done. You got your head on straight. It's an honor to talk to you. Folks, Summer's here.

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It's awesome. All these kids want to learn how to run businesses. Folks, the real estate market is on fire all over the country. If you're looking to buy a home and you need a mortgage, don't sell yourself short by going and getting a typical pre-approval. That's a false sense of security, and it's just not good enough in today's fast-moving market. Instead, call Churchill Mortgage and get their certified home buyer program. I'm telling you, it's a game changer. Churchill helps my listeners become fully approved before they go house shopping. In other words, Churchill does upfront what most lenders wait to do at the last minute. This gives you an advantage over other buyers and helps you close really fast.

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Welcome to the Dave Ramsey Show, Hector. Hey, Dave. How you doing? Better than I deserve, man. What's up? All right. I just want to say really quick that I'm really grateful for what you do for everybody. I mean, it's been a blessing finding you. Thank you, sir.

So I'm stationed in Warner Robins in the military. And I'm trying to, after doing financial peace with my wife, obviously I saw the benefits of it, and my wife and myself got on the same page about everything. I mean, it's been amazing. So I definitely want to keep that going. I want to show other people what, you know, what this is all about. And I'm always talking about you, by the way, everywhere I go. Thank you.

People are starting to think I'm crazy. But I try to go through my unit to pay for the Financial Peace University and, you know, several months later, they still haven't done it. And I'm starting to think about paying for it myself. And I guess, what would you do? Check with the chaplaincy. To Financial Peace University, we have a military edition that is taught all over the world in the military, and some different branches have money set aside for those kinds of things, and some of it runs through the chaplaincy.

Some of it you can get the base commander to approve it, those kinds of things. But we're approved by all the different branches, but then you get caught up in the military red tape, like you say, whether you can actually end up getting the money or not so i would talk to your chap your base chaplain and see what they are doing and uh talk to commander and see if you can't get some some movement there uh but we do have the military version get in touch with our military guys here at the office and they can help you walk through that process my you know the last last thing, I mean, it's an option, but it's way down on the list that you pay for it for everybody else.

You know, it might be you just start the class and just invite guys to come and they pay for it. You know, or maybe you agree to pick up part of it just because you care about it or something like that. You can do that. But I would recommend that you spending your money to send everybody else through would be one of my last choices. I would try almost everything else before I did that. I appreciate your heart, Hector. If you hold on, actually, I'll have Kelly pick up, and we'll make sure you get connected to our military team here

that works with military all over the world. Aaron is with us in Columbia, South Carolina. Hi, Aaron. How are you? Hi, Dave. I'm great. I'm a little bit nervous. I might be the first patient you've lost.

We'll find out. I doubt it. What's up, man? My wife and I are in Baby Step 1, and we have two vehicles. The first one we just paid off this past week due to the normal loan term running out. And it also happens to be the same month when it's time to renew our car insurance. And so I'm wondering, since this car has paid off and has a very low value, I've gone out to Kelly Blue Book, and the low ball value is about $1,800, and I think due to physical damage, it's worth even less. The rate difference between including comprehensive and collision on my vehicle and not is about $500 over the six-month period.

Really? For an $1,800 car? Between two different insurance companies. And my wife used to work for a PNC agent, and they quoted really high because they were including all these extras, like medical payments and comprehensive and collision. It ends up being $500 between the two companies of a difference. And I just don't see the need for the comprehensive and collision on my Jeep. No, you don't.

Not at $500, if that's really what it is. With a $500 deductible. Yeah, so $1,000 is, you know, the first $1,000 is gone out of your pocket one way or another, right? Out of the $ so no i think it's are you sure the collision only the collision only is 500 difference no no no it's that's that's only part of the premium but with all of it together and the five thousand dollar medical and roadside assistance the premium i'm able to get the difference is 500 but that was the big part of it that was okay yeah so i mean yeah on 1800 car you don't do roadside assistance.

On an $1,800 car, you don't do all this other stuff. But you do need liability on it, and you may want to buy the collision. You need to price out the collision completely separate. Well, they won't give it to me. The one I quoted, they won't give it to me without the comprehensive, so I'll have to do it separate. My van is still under. They don't sell insurance without comprehensive...

Without the collision? The online progressive quote, when you turn off the comprehensive, it doesn't give you any options to select collision. Okay, go to DaveRamsey.com, click on EOP for PNC, you'll get an independent insurance broker there, and then you can have like an intelligent conversation with a person and find out what's really going on with the insurance on the Jeep.

But, you know, what you've got to do is you're mixing several things together here to make this decision that I don't like. If just the collision alone, just the collision on an $1,800 car, makes a $500 difference with a $500 deductible. You would not do that. That doesn't make sense. But I don't think you got those numbers right now that I've talked to you a little bit further. I think you're mixing these things up because you're trying to just look at this convoluted online process that you're dealing with.

So jump online, talk to one of our ELPs, and break it down. I actually had this happen on an old jeep i had a while back that was down at the lake house and it was worth about three grand and the collision on it was substantial and um and i just didn't carry collision on it but i generally the collision is usually worth it in most cases so i just look at at it and I say, what's the value versus the risk I'm taking? And that's what you're doing with insurance. You're transferring risk to someone else. And so, you know, I still carry collision on my cars because when I run the numbers out, it's worth it to transfer the risk on the car.

But you've got to really get solid, broken-out information to make that determination. You've got to have liability on there, period. I mean, in most states, that's the law anyway. Tracy's with us in Richmond, Virginia. Hi, Tracy. How are you? Hi, Dave. How are you?

Better than I deserve. What's up? My husband and I have two kids, and we are trying to figure out, well, we just found out that we are pregnant with twins. Yay! Yeah, so we are super excited. Is that number three and number four? Number three and number four, yes, sir. So we started Financial Peace back in January.

My mom and dad gave it to us for Christmas,. We started out at $35,000 in debt, and we are at $16,000 now. We're on a roll. We feel like we're doing really good, but I am having a hard time with whether or not I should quit my job and stay at home. What do you make? I make $30,000. What's she make? $30,000. What's he make? $70,000. Okay.

Daycare with four kids, you're not making a ton after $30,000. No, you're not, and that's what we're kind of thinking. But, yeah, I wasn't sure if I should just try to have... And your desire is to stay home? I would love to stay home, and my husband would like for me to stay home too, but I just feel like there's opportunity of growth in my job as well, and I'm torn. The question first and foremost is what does Tracy want to do?

The second question is can we afford to do it? And if Tracy wants to stay home with the four kids, then let's start working towards what have we got to do to make that happen. So the twins are going to be delivered when? We're thinking around Thanksgiving. Okay. All right. And how much progress on the remaining $16,000, if you guys go bananas,

can you make on that between now and Thanksgiving? I think we're going to be able to have it paid off by Christmas. Okay. So you're debt-free, and you have $70,000. If you come home, you're debt-free with the $70,000 income, right? Yes, sir. And we need to build the emergency fund up, and then we need to start investing and moving on. Run your budget out as if you were living only on his check coming home.

And look at a budget or two, a pretend budget, a trial budget, right? Okay. As if that was happening today, not counting the $16,000 in debt because it'll be gone. But run your budget out and get comfortable with that. I think you're coming home because I think you want to, and I think you're going to be able to afford to because of what you've done in the last year, paying off all this debt, and you've learned how to handle the money and make it behave. Congratulations. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance.

Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income, and I recommend 15 or 20-year plans for most families. Stay away from cash value or return of premium plans. They're just a rip-off. Disability insurance is just as critical. How are you going to pay your bills if you're unable to work? Disability is the leading cause of bankruptcies and foreclosures, and that's why I send you to Zander Insurance. They've been helping my listeners find the right plans at the lowest cost for almost 20 years. Call 800-356-1780 or visit zander.com and compare online. That's 800-356-1780 or zander.com. From Rochester, Minnesota, Peter and Jessica are with us. And it says on my screen, you guys are debt free.

We are, Dave. I love it. Well done. So how much have you paid off? How much have you paid off? We paid off $150,000. And how long did that take you? 11 months.

11 months. And your range of income during that time? It was about $125,000. Okay. What do you guys do for a living? I work for the federal government and farm part-time, and Jesse works at a retail greenhouse. Very cool. Good for you. What kind of debt was the $150,000? We were normal. We had a little bit of everything, $80,000 on a business loan, $40,000 on a home equity line of credit. Then the rest was a combination of cars, a tractor, a UTV. Okay. So you didn't even make $150,000 during the 11 months. How did you pay off $150,000?

We sold stuff. Oh, a bunch of stuff. What was the biggest thing you sold? We sold part of a business that paid off about $80,000, and then we also sold a tractor that sold off another $40,000. Oh, wow. So $120,000 on those two licks, huh? Yep.

Wow. Big deal, man. That's a lot of movement there. Amazing. What happened 11 months ago that put you on this journey? Well, we'd have to go back a little bit farther before that. Before that, I have anxiety and depression, and it really kind of hit a low point.

I'd say eight months before we started, and at that point we decided we were going to change anything and everything in our lives um to help get me better and so i got some help and then um when i was low enough we started on the debt-free journey and have never looked back from there okay cool so um you got some good quality instructions some good coaching counseling and help and on top of that you got rid of all the financial stress right that'll help and when we made the last payment it was like a huge weight was lifted off my shoulders, and it's been a huge difference. Well, well done.

Congratulations. Well, Peter, you got radical, man. You sold everything in sight. Pretty close. The dog was worried. I bet. I bet. I mean, when a farmer sells his tractor, it's a big day.

Yes, that was a hard one to part with emotionally, but we did it. I bet. Yeah, it was hard. There were tears, but we had some good support staying in there. My brother stood there and was giving us hugs saying, you can do this. It was a hard day and a good day. Well, it got you where you want to go, and now without any debt and $125,000 income, you can start saving and building some of these things back, right?

Exactly. And this time you'll own them instead of them owning you. Well done. Well done, you guys. What do you tell people the key to getting out of debt is? For me, I say it's two things, being intentional and then understanding contentment and being happy with what you have. Yeah.

Amen. Amen. You really did have to grapple with that to sell all this stuff. That's a very important point. Okay. What about you, Jessica? I would have to say that you have to track your spending. We use the EveryDollar app.

And then you also have to have some grace that if you make a mistake, you forgive yourself and pick right back up and keep going. Yeah, that's a part of your healing, wasn't it? Yep. That grace thing is a big deal with yourself. That's a really big deal. Well, congratulations, you guys. Did you have a lot of people, your brother cheering you on, obviously, other people?

Yes, we did. Good. Very cool. And they showed a picture a minute ago of you guys obviously here in the studio at one point, because I got my picture with you. It just showed up on the YouTube channel. Yep, we were there just a couple weeks ago. Okay, very cool.

Good, good. Well, congratulations, you two. Very, very well done. Got a copy of Chris Hogan's book for you, Retire Inspired. And we want that to be the next chapter in your story where you become millionaires and outrageously generous along the way. Well done, you guys. Peter and Jessica, Rochester, Minnesota, $150,000 paid off in 11 months, making $125,000 a year. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! This is how it's done. Love it, love it. Well done. Well done, Love it. Well done. Well done, you guys.

Well, I'll tell you what. A large number of these debt-free screams talk about the way they got out of debt. And she said it. You know, in your every dollar budget. Do you know what she meant when she said that? Well, that means they're one of the five million people, couples, families, households, that is using every dollar. The world's best budgeting app. The most robust and elegant budgeting app that's out there.

And it's just exploded. I mean, we just launched it a couple years ago, and it's 5 million people on this thing. Pretty amazing. You can download it for your iPhone. You can download it for your iPhone. You can download it for your Android. You can use it on your desktop. And you can do your budget in about 10 minutes with EveryDollar. And we strongly recommend you guys jump on and get that done.

So make this the month that you take control. Do it. Go over there to EveryDollar.com. EveryDollar.com and get your budget going, people. It's part of the formula of what it takes to win. Lucy is on Twitter and says, Dave, how come you never consider bankruptcy if individuals are deep in a financial crisis? Well, a lot of different reasons, Lucy. I don't yell at somebody if they've been through a bankruptcy.

I've been through one. I'm not proud of that. But in my 20s, I borrowed way too much money. And that's what started this whole movement of ours is we quit borrowing money and we had to learn how to handle money after we went broke because I was stupid. Now, not everybody that files bankruptcy does it because they're stupid, but I was. And a lot of times the stuff you get yourself into is stupid. Larry Burkett used to say that financial problems are not the problem, they're the symptom. You're disorganized, immature, impulsive, don't know how money works, greedy.

You're something that causes you to make a series of decisions that puts you into bankruptcy court. And bankruptcy court does not fix the thing that puts you there. It just fixes the debt. You're still there after bankruptcy with all of your problems. I was still there with all of your problems. I was still there with all of my problems. And so bankruptcy is, in a very real sense, treating the symptom. That's problem number one with me recommending bankruptcy. Problem number two with me recommending bankruptcy is it's a life-altering,

life-scarring decision, and it's a decision you should make on your own, not because some guy on the radio told you to. It's in the same category as divorce. You should never go through a divorce because someone else told you to. That's a decision you need to come to because it's a life-altering, life-scarring process. It's not something you'd wish on anybody that you care about. And I wouldn't wish bankruptcy on anybody that I care about. And so I will not have someone say I filed bankruptcy because Dave Ramsey told me to.

And so that's why I don't say, hey, oh, go just go file bankruptcy. It's because a lot of times it doesn't fix what's going on. Number two, it's life scarring. And I don't want you having had me make that decision for you. You make that decision on your own. I'm going to love you wherever you are. I'm going to walk with you. I'm going to tell you the truth, and I'm going to walk with you. And the third reason is a lot of bankruptcies are filed that didn't have to be.

There's a lot of times there's a way out. And people just get beat up and beat on and lose hope. And they just can't see the way out. And so that's another reason I don't jump on bankruptcy is the answer. But I'm not against bankruptcy. I just don't, I'm not mad at you for filing bankruptcy. It's like I'm not mad at you for filing divorce. I just wouldn't wish it on you because it's a horrible thing to go through.

Hey, this is Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors. Some of these guys are just scum. But then there are the collectors that are just plain crooks. These are the guys that take it a step further and they violate the Federal Fair Debt Collection Practices Act on a daily basis.

They're breaking the law and they need to be stopped. The truth is, debt collection is the most abusive, out-of-control industry in America today. But you don't have to put up with it. If you have collectors calling you multiple times a day, calling you at work after you've asked them not to, cursing or threatening you in any way, then you need to visit CollectionBully.com. These folks will connect you with an attorney who I know can help you. These attorneys know how to stop collection agencies from bullying and threatening you anymore.

Collectionbully.com. Go to collectionbully.com today. That's collectionbully.com. Our scripture of the day, Proverbs 3, 5, and 6. Trust in the Lord with all your heart. Lean not on your own understanding. In all your ways acknowledge him and he will make your paths straight ella fitzgerald said it isn't where you came from it's where you're going that counts i heard condi rice say that so that saying's been going around a lot. Okay.

I've quoted Condi about 20 times in the past six months on that. But she was asked, you know, what did she learn from her? What did she attribute her in the interview that was done at Entree Leadership Summit? What did she attribute her unbelievable accomplishments to? And she said her parents and her upbringing. And she was raised in Birmingham, Alabama, in a segregated neighborhood. And she said, the people in my neighborhood, my parents included, said, education is the answer.

Don't let other people set your worth for you. When you use racism as an excuse, this was Condi quoting her, it gives someone else power instead of holding the power yourself. Just because somebody is a racist jerk, don't give them power, in other words. And she said, my parents told us all the time, it doesn't matter where you're coming from. All that matters is where you're going. And she ends up National Security Advisor, Secretary of State. Her intellect is just unbelievably intimidating.

She's so nice, but she's one of the smartest human beings I've ever been in the same room with. Unbelievably well-read, well-spoken, poised, absolutely incredible. So, yeah, I'm going to be quoting Condi for a while because it makes me feel smarter when I do it. Yeah. Doesn't matter where you're coming from. What matters is where you're going. You know, you could say that about your neighborhood. You could say that about your family.

You could say that about whatever you're going to say it about. You could say it about your stupidity. Like, you know, I was a millionaire by the time I was 26, starting from nothing. But I was stupid. Borrowed up to my eyeballs. Bank got sold to another bank, called our notes. We spent the next two and a half years of our life losing everything we owned.

We were sued and foreclosed on and finally bankrupt. By the time I was 28 with a brand-new baby, a toddler, and a marriage hanging on by a thread i was broke could have stayed there could have just said okay that's my identity i'm the guy that filed bankruptcy because a lot of times when you're a victim of your own stupidity or a victim of something else it's easy to make that your identity isn't it all of us have that well you know but the neighborhood i grew up in this little man can't get ahead you don't know about people like me you don't understand people like me i was in new york speaking a while back and the audience was basically united nations i mean there was every possible mix of person in the audience you know it wasn't the united nations it wasn't where i was speaking but i mean just was every possible mix of person in the audience you know it wasn't the

united nations it wasn't where i was speaking but i mean just a it was a real mixed wonderful audience it was a lot of fun and this woman comes up afterwards i was cracking up of course i'm a southern hillbilly right stuck in the middle of new york city doing this thing and this woman comes up she goes you don't understand i said what do i not understand she goes i'm puerto rican and i said what's that got to do with the price of beans and she said puerto ricans have to have new cars i said what i said you think that's a puerto rican disease i thought it was a hillbilly disease i thought cajuns had that disease i thought i thought everybody of every color every background anywhere had that same disease it's not a puerto rican disease kiddo puerto ricans have to have new cars give me a

break but isn't it interesting how we self-identify and we say our group can't get ahead because our group does this i'm a millennial i can't get ahead i'm a baby boomer i can't get ahead. I'm a baby boomer. I can't get ahead. I'm over 50. I've got ageism. I can't get ahead. Nobody hires anybody in the 50s. Well, so start a business, goob. This is America.

I mean, have you not learned anything in those other decades up to now? Of course you have. Go do something. See, you're not stuck. It doesn't matter where you're coming from. All that matters is where you're going. I love that, man. That'll preach right there.

All right, Nancy's with us in San Francisco. Hey, Nancy, how are you? Hello. Hi. I'm going to try to contain myself because I'm very excited to talk to you. How are you? Well, I'm honored. How can I help? Okay. We haven't opened one of your books. I just stumbled across your YouTube video where you say to run like a gazelle. And after that, I started listening to your podcast and that was a month

ago. Wow. So thanks to you, my husband and I, we sold our land, and we're going to use that money to pay off all of our debts. Wow. Yes, but here's the thing. We made a couple of mistakes. One of the mistakes was I'm going to say this out loud. I bought a $40,000 beautiful Jeep the week that I was laid off from work. So that was two years ago, three years ago almost, and I didn't go back to work.

I stayed at home, had a couple more kids, and now I'm a stay-at-home mom. Gotcha. How can I best help you today? Well, I want to know, with this $100,000, I want to know if we should pay off the Jeep or take that money, sell the Jeep, and get a $5,000 car or something to get me around. What's your household income? It's projected to be $110,000. Okay. And what is the other vehicle?

You have a $40,000 Jeep and you have a what else? We have a truck, a work truck that he owes $12,000. He owes $12,000. What's it worth? Right now it's worth probably $12,000. This is 2011. All right. And so if the Jeep's worth $40,000 and the truck's truck's worth $12, that means you have $52,000.

That's less than half your annual income. So your cars are not way too expensive. The Jeep's a little weird. It's got kind of a weird history to it in that you bought it in like a weak moment when you were like grieving or something. You kind of had a crazy moment, right? But other than that, it's fine. Do you like the Jeep? Of course. Oh, yeah. Okay. Well, it's not. Do you like the Jeep? Of course.

Oh, yeah. Okay. Well, it's not required that you like it, so I just wondered. Okay. So you have other debt other than these two debts? Yes. I have $71,000 in debt. Including that, it's, well, oh, the other mistake.

Okay, look, I'm going to run out of time. Stop. So how much debt do you have not counting your house? $71,000. Okay, and you can pay all of that off with $100,000, and you make $100,000 and some change, and everything's paid for except your home at that point, and your vehicles are worth less than half your annual income.

I would keep the Jeep. Okay, all right. and your vehicles are worth less than half your annual income, I would keep the Jeep. Okay. All right. Because it's less than half your annual income and you're debt-free. Yes. Okay. But here's the thing. Let's go back and if I'm you, I'm going to go back and say, okay,

just like when I went broke, I did the same thing to myself. I did a CSI on it. I did an autopsy on the patient. Why did the patient thing to myself. I did a CSI on it. I did an autopsy on the patient. Why did the patient die? Okay, and I went back and I said, okay, there's a dumb thing I did. There's another dumb thing I did. There's another dumb thing I did. And you need to clearly identify the dumb things, okay?

I'll go ahead and tell you what one of them was here, okay? You can look at them. You can figure it out for yourself. But the way you told the story told us all. The Jeep was a dumb purchase. why was it a dumb purchase because you did it as at a really high stress time and you impulsed it to medicate your sorrows over having lost the job not the way you make a decision to make a purchase you don't make purchases to medicate sorrows you'll be broke your whole life because there's always sorrows you don't you never do that and you certainly don't do that with

40 freaking thousand dollars so you go back and you look at that and you go that's i'll never do that again i learned my lesson and as long as you quit repeating stupid stuff you're gonna walk out you're gonna be fine honored to talk to, Nancy. Thank you for being a listener. 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's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.

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