The Ramsey Show - App - Changing Your Family Tree Starts With You (Hour 3)
Episode Date: September 3, 2019Debt, Home Buying Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Inte...rview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR
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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. Thank you for joining us.
Open phones at 888-825- 5225. Daisy is with us
in Oklahoma. Hi, Daisy. Welcome to the Dave Ramsey Show.
Hey, thanks so much for taking my call. Sure. How can I help?
Well, just a little context. I'm 24. I make $45,000
a year. No kids. Student loans are paid off.
And I have about $26,000 in debt. I guess I was mostly
just calling for some reassurance and guidance. I'm on maybe steps one and two, but I got divorced
earlier this year, and it just had a major impact on the timeline of my financial goals. So it's
just really discouraging, even though I'm following your steps well, just to look at how much further, you know, I don't know, normal goals like getting out of debt and buying a house are now.
You're 24. How long were you married?
Two years. We got married in college.
He was a medical student, not student.
And I went into journalism.
So really until recently, I've had the security of my salary being a drop in the bucket.
Um, you know, very soon, uh, in the divorce, I lost my savings and obtained some credit card debt.
We had pain plan to pay off together.
Um, so since then, of course, how did, how did the doctor. and credit card debt we had planned to pay off together.
So since then, of course, I'm linking with... How did the doctor not get the credit card debt and he got the savings
and the journalism student got the credit card debt and not the savings?
Fast divorce with no lawyers.
That's how it happened.
Fast divorce what?
With no lawyers. That's how it happened. Fast divorce what? With no lawyers.
Oh.
You got owned is what you're saying.
Yeah.
Yeah, pretty much.
Yeah.
You just wanted out of there that bad, huh?
Yeah, I think a little bit of the both of us kind of rushing it.
Okay.
Okay.
So you ended up with credit card debt that is $26,000.
Oh, I'm sorry.
The credit card debt is about $7,000.
The rest is a car loan.
Oh, I'm sorry.
Okay.
So you have a $19,000 car.
Is that right?
Yes.
Okay.
Correct. And you're 24, and you said you make 26 000 and what do you make 40 45 000 45
000 okay all right um what do you do for a living i'm a reporter at a local newspaper okay all right
good for you all right um well you know your your reset is you know, it's coupled with a heartbreak is part of the problem.
What you thought the 30-year-old you was going to look like is not going to be.
And you have to, you know, you're grieving that heartbreak because it hurts.
And then there's the actual financial mathematics to the pain that says,
I got this credit card debt, I got this car,
and now I got to try to make it on $45,000 a year, which you can do.
I mean, you're a single lady making $45,000 in Oklahoma.
You can make it.
It's not like you're going to starve or something.
It's just you're not going to accelerate super fast unless your career does
or your income does.
And so if I'm in your shoes, I'm probably getting out of this car.
Yeah.
Because I think that car is a big chunk of your world.
And do you know what it's worth?
It's pretty new.
It's a 2019, so very new.
Okay.
So is it worth about, I mean, you owe $19,000 on it.
What's it worth?
It should be worth about that.
Good.
It's a very recent purchase.
Okay.
It was a bad purchase because it's half your annual income.
It's going to take you a long time to pay that off,
and it's going to stunt your growth financially.
And so you should be in about an $8,000 car, $10,000 car
that you pay off very, very, very quickly with your $7,000 in credit card debt
because if you don't have a car payment and you don't have any credit cards,
all of a sudden your budget opens up.
Yeah.
And that's where you're headed.
So, yeah, I think that was probably an emotional purchase.
You needed a car for some reason after the divorce and you wanted the security of a brand
new car or the prestige or something to feel good.
I don't know, whatever.
But you stepped in it for sure.
And that's what I would do if I were in your shoes. something to feel good. I don't know, whatever, but you, you stepped in it for sure. And, um,
that's what I would do. Uh, if I were in your shoes, um, yeah. And yeah, I know you're going
through a lot of pain. I know you're hurting, but you called and said, I need a reset. I need
to think about how I'm going to win in my future again, because the way I was going to win is not
here anymore. We're doing it. I have to do it differently now. And the fastest way I was going to win is not here anymore. I have to do it differently now.
And the fastest way I know to build wealth for anyone is to not have debt.
And you just took on a big chunk of debt on something that's going down in value very rapidly.
The good news is it's new enough you can probably get out of it.
If you wait a year, you're going to be upside down in it by $5,000.
And you're going to owe $5,000 more on than it's worth. worth so i wouldn't wait around i want to help you turn this around daisy hold on i'm going to
have kelly pick up and we're going to get you signed up for financial peace university it's
our nine-week class and it includes a one-year membership that uh gives you access to a ton of
other stuff use all of these tools.
It's about $1,000 worth of stuff I'm giving you.
Use all of these tools to reset your life,
and I can be honored to be part of your healing that way.
And I'll give it to you as my gift to help you turn this around.
I'm sorry you're facing all of this.
Scott is with us in Nevada.
Hey, Scott, welcome to the Dave Ramsey Show.
Thanks for taking my call, Dave.
Sure.
I just have a question.
I mean, I should be debt-free by the end of this month.
Yay.
And I'm going to be – we didn't have significant debt.
But we want to go see the Smart Investor Pro,
and I was just curious to be prepared to go meet with them what I should be prepared with.
You don't need a ton.
I mean, obviously, you'll need to know your income and any assets that you have.
Do you have any other 401ks or anything that you may be wanting to roll?
Any kind of old investments left over from another time in your life or something like that?
Then, you know, you'd need all that information.
I have a 401k from my current employer, and it's not much.
Okay.
Well, you could take those details in.
They're not going to do much with it because it's your employer.
But you can take in what the
options are for that to invest in and what you are currently investing in inside of it. And,
you know, certainly what your income is and what your assets and liabilities are. You don't have
any liabilities because you're out of debt. So what assets do you have? How much money do you
have? And, you know, the details like that and really it's not a lot to pulling it off.
And they'll sit down with you and give you a good outline.
And the thing is, there's not, when you start meeting with SmartVestor Pro,
it's not just one meeting and you have to be perfect or you're never going to see them again.
It's the beginning of a relationship with a teacher that's going to teach you how to handle money going forward.
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761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Patrick is with us in Indiana.
Hey, Patrick, welcome to the Dave Ramsey Show.
Hello, how are you?
Better than I deserve. What's up?
Question for you. I came across you about a month or so ago and I'm trying to get through some steps.
I'm a little bit kind of reversed in regards to I have savings that I kind of cut aside for three to six months of my just-in-case money.
But I currently do have $35,000 roughly in debt that is not my home,
which is cars and a couple credit cars.
So my question, I guess, is should I take my six months of savings in case money
and pay off some of my debt and then kind of rebuild that as I go
or just keep as I go here, I guess.
Yeah.
How much do you have in savings?
It's about $15,000, $18,000 fluctuates from month to month, but somewhere in that range.
What we have taught folks for 30 years is a thing called the baby steps.
Yep.
And they're in order, and they're very precise, and they work.
They work because it's a very clear plan.
It's very carefully thought out.
And it's based on the premise that your number one wealth-building tool is not your emergency fund.
It is your income.
And right now, $35,000 worth of debt is sucking the bone marrow out of your income and right now thirty five thousand dollars worth of debt is sucking the
bone marrow out of your income
yeah it's roughly uh when i calculate it's roughly thirteen hundred dollars a month
yeah and so um you know which is you know what seventeen,000 a year? Yeah. And what do you make?
After, well, I guess pre-tax, we bring about $148,000.
Yeah.
So if your boss walked in and said, I'm going to give you a $17,000 a year raise,
that would be helpful to your wealth building, which is what I'm trying to do.
Okay. So if I were in your shoes,
it sounds like you're kind of just getting around the edges of the stuff we teach
and all this stuff.
The stuff we teach is really, really intense and really, really focused,
and it's not like a theory that's an intellectual thing.
It's very visceral.
It is intellectual, but it's very visceral,
and people live deep down in it because personal finance is 80% behavior.
It's only 20% head knowledge.
And so if you were to sit down with your wife and say, take a week and put together a detailed budget using every dollar,
it's a free online budgeting app that we have that you can download for your phone.
I've done that.
Okay.
A detailed budget.
And the two of you are looking at that and going, wow,
what could we do if we had a fully funded emergency fund of $20,000
and we had no debt payments except our house?
Well, we'd start putting 15% of our income away for retirement.
We'd start saving for kids' college if that's appropriate.
We'd get our house paid off because we make $140,000 a year
and basically got nothing to show for it but $18,000.
Yeah, I mean, there's more to it, but I understand where you're coming from.
Yeah.
I mean, we have other houses that are paid off as well, so we've done some things in the past.
Oh, good.
Okay.
Yeah, I'm just trying to figure out whether or not to kind of take our slush fund and just pay it off.
My point is it's certainly up to you, but you're asking me what I would do.
Well, what we teach is very clear.
I'd have $1,000 in my emergency fund.
I would throw the rest of it at this debt by listing the debt smallest to largest.
I would attack this debt with a vengeance like my hair was on fire.
I would get rid of it, and then I would rebuild that emergency fund,
and only then would I relax.
Yeah, that's where I'm at.
I'm not relaxing.
But I'm saying you're not going to be relaxed at all when you've got $1,000.
Yeah, I know.
That's the problem.
It's going to scare the crap out of you in a good way,
which lights your hair on fire and makes you do this stuff.
But, again, you can't sort of kind of do our plan because you and I both know you don't want to be sitting here five years from now with $1,000 in your account.
That's not going to work.
You've got to knock this in the head.
I mean, you've got to treat this like there's a burglar in the house, and you're just going to do what it takes to win here.
You're going to survive.
Because the thing is, you've got $35,000.
You put $18,000 or $17,000 on it. here you're going to survive and we're going to because thing is you got 35 000 you put 18 or 17
on it you got 17 18 left um making 145 you're going to knock this out in about six months
yeah i got somewhere between four and five thousand a month extra so yeah yeah and so
about seven months six months something like that and then then you're going to rebuild
immediately so by the time i'm talking to you this time next year,
you've got $20,000 in the bank, easy,
and you don't have a payment in the world except your house.
Now you're poised because you have a solid mathematical foundation
to build wealth,
and now you're set up to really load up your retirement and everything else.
And I'm also telling you to temporarily stop your retirement if you've been doing that.
Temporarily stop investing.
We're not going on vacation.
We're not going out to eat.
We're not going to see the inside of a restaurant unless we're working there.
We've got to get this mess cleaned up.
Now, once we get the mess cleaned up, we've got the emergency fund,
then we can let the foot off the gas a little bit and start, you know,
go back to the kind of the mode you were in.
But all this is is you've done pretty well because you make a lot of money,
but you've just been a little bit disorganized and sloppy, a little lazy with your purchases.
The debt that you have is lazy debt.
It's not like you're some kind of crazy consumer and you've lost your mind or something like that.
It's just you just kind of wandered into it and didn't think much about it
because debt is so normalized in our culture.
The problem is it's a thief, and I don't want a thief in my house.
Derek is with us.
Derek's in Maine.
Hey, Derek, how are you?
Very good.
How are you?
Better than I deserve.
What's up?
So I'm a recent listener, mainly watcher of your youtube videos and i've
been uh binging on them pretty hard so i got the wife on board and we're trying to establish uh
you know our our baby steps so we're on step two good and i'm upside down about $16,000.
Yeah.
That thing didn't lose.
That thing lost a bunch of value fast, didn't it?
Well, I did stupid on stupid, like I guess you would say.
Oh, you rolled negative into it.
Okay.
Yeah, from two or three other vehicles.
So now I'm just upside down on my head and uh
so so we're debating would it be more wise to attack the whole value of the truck or uh
maybe like i guess get an unsecured loan for the difference and get another vehicle
or maybe pay off the negative until i'm even and traded in. So you're 18 in the hole.
I owe 36.
It's worth approximately 22, so 14.
14 in the hole, okay.
And how much other debt do you have, not counting your house?
6,000 credit card.
My truck's $36,000 with cars, $10,000 and $50,000 in student loans.
I just sold my house.
We broke even, luckily.
And what's your household income?
We have some financial jumbling right now.
I just got an increase, and she just got a new job
right now i i net 26 50 a month and she nets 28
a month okay so you're making about 80 000 a year roughly maybe 90 between the two of you, it sounds like. Okay. And, yeah, the rim, the rule of thumb I use on cars is two things, okay?
Number one is they go down in value like a rock,
and so you don't want to own vehicles total that equals more than half your annual income.
You're pretty close.
Yeah.
Okay.
The second rule I use is can I be debt-free in two years if I keep the truck other than the house?
$92,000 in two years?
I doubt it. I think his truck's probably gone.
Probably a good idea to get you a beater and take the hit.
Get you a loan for the difference. Yeah, it's probably gone. That probably makes sense.
Man, it's a fine truck though.
A wonderful car. Maybe it's time you broke the cycle
of rolling negative equity into stuff.
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In the lobby of Ramsey Solutions, our brand new headquarters on the brand new debt-free
Scream stage, Drew and Krista are with us. Welcome, guys. Thanks, Dave. Hi. Our brand new headquarters on the brand new debt-free scream stage.
Drew and Krista are with us.
Welcome, guys.
Thanks, Dave.
Hi.
Good to have you.
Where do you all live?
Minneapolis, Minnesota.
Welcome all the way to Nashville.
Thank you.
My goodness.
And all the way here to do a debt-free scream.
Of course.
How much have you paid off?
We paid off $65,500 in 17 months.
Good for you.
And your range of income during that time? Between $50,000 and $80,000. 17 months. Good for you. And your range of income during that time?
Between $50,000 and $80,000.
All right.
Very cool.
Excellent.
What do you guys do for a living?
I'm going to school to get my master's in occupational therapy at U of M.
And I'm an executive account manager for a legal software company.
Oh, cool.
Good for you.
And also in the National Guard as well.
All right.
Well done, you guys.
Great.
What kind of debt was the $66,000?
It was all mine.
So I had the big hole and the big shovel.
That works.
It was made up of credit cards, student loans, and a car payment.
Wow.
Okay.
How long have you all been married?
17 months. Oh, there it is and a car payment. Wow. How long have you all been married? 17 months.
Oh, there it is.
There it is.
Okay.
There's the correlation with the numbers.
Okay.
Very good.
All right.
So you got married and decided to go crazy on this debt.
Tell me the story.
Well, it all started with I saw your documentary, Maxed Out, a couple years ago.
So I saw that and I heard a spouse say that she was worried about her
husband, that she wasn't really worried as much for bankruptcy, but for suicide. So that kind of
stuff. So I'm like, hey, I need to pay attention to this. So I started the plan, started listening
to you. And then out of nowhere, my father passed away. So I kind of put my career on hold, went
back and helped out my mom and then decided
to kind of change things up, but then got back on the plane. And not too long after that, met Krista.
And then we jumped out of a perfectly good airplane and proposed to her right afterwards.
And so the tough part was right when, about two weeks after we got married, I got laid off from my job. Oh, wow.
That was pretty tough.
So it was more difficult, that feeling, because previously it was just me and I could take care of myself.
But now I had a wife to think about.
Right.
Yeah.
Wow.
Okay.
So you remembered the old documentary from 100 years ago and decided, okay, even if we're going to lose a job, we're married, we're getting this mess cleaned up.
Absolutely.
And what did you do?
So the big thing that happened was a month later after I got my current job is I got notified I was going to be deployed to the Middle East.
Of course.
So the last half of our paying off the debt, I was deployed.
Wow.
Which helped out a lot because he wasn't able to spend as much.
He had a lot of stuff paid for, so I did all of the spending.
Yep.
And she's the budget queen.
So once we got on a game plan, got our goals in line, she kept the budget.
And then not a dollar went out unless we knew what was going on.
The few times we got to speak together when she wasn't studying for 12 hours a day
and I wasn't working 12 hours, we talked about life and caught up,
but then also talked about our budget and concentrated on our goals.
Very cool.
So what do you tell people the key to getting out of debt was?
I think it was communication.
Being on the same page was kind of key and having a budget
to tell your money where it goes so you know. And then paying with cash. So paying with cash was
huge as well because you kind of feel that hurt when you're paying for something. Groceries,
clothing, everything was paid for in cash as much as we could except for a couple of things like
gas and things like that. Yep. And then right after I proposed, I was just sitting on the porch. I'm like, okay,
what next? I got the girl of my dreams, but kind of what else is there? I want to set a long-term
goal. So I decided to set the longest term goal I could that I could still have an impact on. So I
said, I want our grandkids to be able to change the world in some kind of way.
So whether it be coming up with a treatment for MS or owning a business,
I want them to be able to help out or kind of do what they can.
So in order to do that, we have to raise our kids to be smart with money,
have good morals, but we need to do that at the beginning. So we did that as a plan.
That was my big why.
That's a big one.
Excellent.
Very, very, very well done.
Who were your biggest cheerleaders?
Our parents and family, they're also debt-free too.
So they were kind of cheerleaders in helping us kind of stay on track
and really supporting us through the journey.
Yep.
And then throughout the time, we had Sunday night dinners together with her parents.
So we get able to talk about things and just be able to kind of relax when we're paying off all this debt.
Love it. Very cool. Well done, you guys. Very, very well done. Proud of you.
And then, Dave, our numbers were pretty cool, but I led my fourth financial peace university while I was deployed to the Middle East. So 36,000, or excuse me, 36 soldiers paid off $212,000 and increased their savings of $59,000.
So that's above the $8,000 average.
I love it.
Way to go, man.
Well, thank you for leading the class, and thank you for your service.
It's my pleasure.
Appreciate you very much.
Very, very well done.
Well, congratulations.
Thank you.
We've got a copy of Chris Hogan's book for you, Everyday Millionaires, and that's what
you're on track to be.
Like you said, change the world with the grandbabies.
Yep.
Change your family tree, man.
That's exactly how it happens.
Yeah.
So very, very cool.
Thank you.
Congrats.
Thank you.
All right.
It is Drew and Krista from Minneapolis.
$66,000 paid off in 17 months, making $50,000 to $80,000 a year.
Count it down.
Let's hear a debt-free scream.
Three, two, one.
We're debt-free!
Woo-hoo!
Way to go, you guys.
Absolutely amazing.
That is wonderful. Congratulations. That's the way to start off a
marriage is to have a goal like that and then get after it because once you know you can tackle the
money thing you can tackle anything together it works beautifully wow way to go you two very very
well done sophie says on facebook dave how do I realistically make a budget on only $18,000, $1,800 a month?
$18,000 would be easier.
$1,800 a month.
Well, it's hard.
It's hard.
That's a $20,000 a year income.
That is very difficult.
But it can be done. If you're a single person with no dependents, no children to raise, then, you know,
obviously, it's not unusual to start out at $20,000 a year. It's more of an entry-level income
for most places. But what you're identifying is that there's two sides to this financial equation,
the income side and the outgo side. The budget has to do with the outgo side. The income side
has to do with your career.
And so if I were making $20,000 a year, I would set a goal to not make $20,000 a year anymore.
Meaning I'm going to ask myself, what can I be doing that pays three times that, four times that, five times that, whatever.
How can I be making $100,000 a year in five years? And what's the process I've got to do?
Or ten years? What's the career I've got to do? Or 10 years?
What's the career I've got to embark upon to do that?
And it can be something that you actually like better than what you're doing now.
You're not stuck.
Now, today, that snapshot of where you are today is very, very difficult.
The great news is that life's not a snapshot.
It's a film strip.
And so there's another frame, and then another frame, and then another frame, and then another frame.
And 100% of the time, one year from today, you will be doing better or worse than you're doing
today. You will not be exactly the same. It's impossible for you to be exactly the same year
after year after year after year. You'll do better or you'll do worse.
Things are either growing or they're dying.
And that includes your personal development, your career, your body, everything.
You're either getting better or you're getting worse all the time.
And so you've got to take the steps to do that.
And you can do it.
You can do it.
So what I would do is sit down and read Ken coleman's book the proximity principle i start listening to him on xm listening to his podcast the ken coleman show
and i'd turn this around and i'd start saying what can i do differently than i'm doing now
what's the new career god has for me what's the next thing i'm going to do that's going to make
more money because you know way too many people spend more time picking out a suit of clothes or a pair of shoes than they do their career.
You need to spend more time picking your career than you do almost anything else.
Because you spend a lot of time doing it.
And it creates the income that you have to live on and prosper with or not prosper with, as the case may be.
So that's the side of the equation you've to work on sophie it's a good question
we appreciate you following us on facebook this is the dave ramsey show Thank you. thank you for joining us america our scripture of the day is matthew 5 16 in the same way let
your light shine before others that they may see your good deeds and glorify your Father in heaven.
Bill Bradley said leadership is unlocking people's potential to become better.
Love it.
Well, 78% of Americans are living paycheck to paycheck,
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for the webinar that's coaching to 33 789 nate is with us in Florida. Hi, Nate.
Welcome to the Dave Ramsey Show.
Appreciate you taking my call, sir.
Thank you.
My pleasure.
How can I help?
My question for you, sir, is I would like to know if you can maybe suggest to me
what would be the best way to save to buy a house in which you suggest putting investing on hold.
In the meantime, I currently decided to make a change in investing
as far as retirement is concerned and took the savings
and put toward maybe saving for a home.
I took about $50,000 and want to try to continue there,
but I kind of feel like there's maybe a better way for me to do that.
Okay.
The first thing we tell folks to do is to be debt-free, accept their home,
and have an emergency fund of three to six months of expenses
before we start having the investing or buying a home discussion.
Are you debt-free except your home?
Yes, sir.
Good.
You have your emergency fund of three to six months of expenses.
Well, the $50,000 has been the emergency slash home fund, if you will.
Okay, so you have $50,000 in savings, not counting your return on investing.
No.
Good.
Okay, very cool.
And what's your household income?
It's between $50,000 and $60,000.
Well, you've done great, man.
Way to go.
Way to go.
Very good.
Well, so if we set aside, say, $15,000 and called that three to six months of expenses, as an example, you'd probably make it three to six months on $15,000 if you'd lost your income temporarily, right?
I would agree.
Okay.
Then that would leave us $35,000 as a down payment on a house, wouldn't it?
Yes, sir. I think maybe the dilemma for me is, you know, I've been watching the show for a while and I have never been comfortable with debt or owing money.
So what I've been trying to do is just try to save as much as I could for the down payment as possible.
And like I mentioned before, I kind of feel like maybe there's a better or faster way for me to do it otherwise from just saving
and amending to the $50,000 that's aside right now.
Yeah.
Well, you have $35,000 because 15 of it's your emergency fund.
So we've got $35,000 in your house fund, and you make $60,000.
And if you stopped investing in your 401K and Roth IRAs or anything like that temporarily,
yeah, you could build up your savings a little
bit more very fast.
We call that baby step 3B.
After you have baby step 3, before you start investing, which is 4, you take a pause there
in the middle and build up your down payment for your home.
You could do that.
That would be fine.
What price range home are you thinking about buying?
Well, I'm single and without a family so
i'm just looking for something uh uh small i would guess maybe between 250 and 300 i
i'm not necessarily looking for uh anything uh bigger but i you know the whole idea of
continuing to rent is uh what's brought brought me to where I am now.
Yeah.
Well, so if you stopped investing and saved for another year for a down payment,
how much could you add to our $35,000?
I would maybe say another $30,000.
Okay.
Well, that might not be a bad idea if you want to do that for a year
and then go buy a year from now, right?
Yeah, I think I may have, you know, gone the other way around.
I kind of went forward with trying to invest as much as I can
without considering the home.
But like I mentioned, you know.
That's okay.
You'll have $65,000 by this time next year.
You'll be in a good place to put that down
and buy the house on a 15-year fixed
where the payment's no more than a fourth of your take-home pay
and then
turn around get the house paid off while you start investing and i think you can do that
so um yeah definitely hey man thanks for the call because you're doing good nate you're doing really
good emily is with us emily is in ohio hi emily how are you i'm great how are you? I'm great. How are you? Better than I deserve. What's up?
So my husband and I are in baby step number two, and my grandfather just passed away,
and we're going to be buying his truck for $5,000.
And so now I'm generating like this, I've got this flock of hoopties, and I'm trying
to figure out what to do with them.
I'm sorry, you're in baby step 2, but you're buying a car?
We are.
It's a sentimental truck.
There's no such thing.
We're cash flowing it.
It's a $5,000 truck.
Yeah.
What's your household income?
$110,000.
And how much debt have you got?
$75.
And how many cars do you own now?
We have two.
One of them is junkyard material at this point.
It still runs, and I drive it every day,
but it's not going to make it through another winter because it's got rust problems.
So you're going to drive the sentimental truck and take that one to the junkyard?
Yeah, that's the plan okay and then i've well but we've got me and my husband are the two drivers and we've always had three vehicles that are hoopties that are like thousand
dollar vehicles in case one of them breaks down and so i'm trying to figure out if we should go
down to two or if we should keep the third one because also we've got like three hundred dollars a year in insurance that we're paying down to two okay a thousand dollar hoopty is an insurance car
it's not logical uh you can take a thousand dollars and go buy hoopty in 30 minutes if you
need one sure it mostly is just one that gets better gas mileage and also that we can use in case we...
So keep that one, but get rid of the other one.
Okay.
Yeah, you don't need but two cars.
You can't drive but two cars.
Right, right.
We've always kept three just because we...
I know. Why did you call me? What do you want? How can I help you? Right. Right. We've always kept three just because we've switched between them.
Why did you call me?
What do you want?
How can I help you?
I'm just trying to figure out if we should go down to two or if we should pick.
Well, I just told you.
Yeah.
Get rid of the hoopties.
Okay?
Get down to two cars, the sentimental truck and the hoopty of your choice,
and dump the rest of them.
Do it.
Or don't do it.
But you asked me.
That's what I would do.
Thanks for the call.
Open phones this hour at 888-825-5225.
Candace is on YouTube.
If I make around $39,000 a year and have $20,000 in debt,
how long should it take me to pay this off?
Well, if you pay off $10,000 a year, you'd be done in two years.
If you lived on literally beans and rice, rice and beans, I don't know how many
kids you got or what your situation is, but if you lived on 20,
making 40, and paid off 20, that's doable, but that's
very tight. So I would say 18 months to two years in most people's situations.
The other thing, of course, you could do, Candice, is be done in one year by
raising your income by working a part-time gig.
Gets you a side hustle, and you can change everything that way.
So, hey, thanks for the call.
We appreciate you following us on YouTube.
All of you, by the way.
There's a bazillion of you.
Thanks, YouTube.
That puts us out of the day for MC Show and the Books.
We'll 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, it's Kelly, associate producer and phone screener for The Dave Ramsey Show.
If you would like to do your debt-free screen live on the show, make sure you visit
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