The Ramsey Show - App - Choose Continuous Effort to Choose Success (Hour 3)

Episode Date: April 9, 2019

The show about you

🎵 Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is gone, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for jumping in. Open phones at 888-825-5225. That's 888-825-5225. Maryland starts off this hour in Raleigh, North Carolina. Hi, Maryland. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up?

Hi, yes. I recently just started following you. I'm interested in starting the baby steps. I don't know if I should start or where to start. My husband is currently military, and I'm a stay-at-home mom. I don't know if it's smart to start the baby steps now because I'm not working or I'm kind of stuck. Okay. Well, I mean, there's's nothing keeping you from stopping them what the

baby steps is for is just what to do first what to do second when i can find some money and we generally find money by getting on a budget making the dollars that we have behave sometimes we find money by selling things sometimes we find money by taking more jobs but you know basically when i get some money what am i going to do with it and the first thing you're going to do before you even worry about that is get yourself on a written game plan and then when you can squeeze dollars out of your existing budget what am i going to do with them well that's the baby steps are you behind on anything no not behind or anything i think we're in a pretty good place. I kind of got us in a place where we're only about $20,000 with both cars, $900 in credit cards.

We have about $2,500 coming in monthly with his pay and about $1,600 going out, and that's including car notes and stuff. So his income is $30,000 a year, and you owe $20,000 on your cars? No, he's bringing in about $40,000, and that's after tax. Okay, well, that would be more than $2,300, unless you're getting a huge tax refund. Yeah, we get about usually yearly about $11, yeah usually okay well that's one thing we've got to change immediately because a tax refund is like buying a shirt at the store and you take it back

and they give you money back that was your money the reason you got eleven thousand dollars is because you gave the government throughout the year eleven thousand dollars too much out of his check so you need to change his withholding immediately okay and start bringing home an extra what eight hundred nine hundred dollars a month okay because that's and that's going to help a bunch. All right, that's good. Now, is housing furnished? Well, we're currently on base. Good, that's what I mean.

That's furnished housing, okay. And what about food? Yeah, food. We usually do a little over 200 a month for food. Yeah, so his food is furnished, but then do you have children? Yeah, we have three kids. He's only deployed, so he's getting a little extra money in now. So I want to know the best way of how to handle that extra money and not blow it.

Good. Okay, the first thing we're going to do is, which is the most expensive car? We have a 2015 Eagleinox, which is currently costing us $460 a month. Yeah, that needs to go. And I thought about that. I'm like, maybe we just need to get rid of that car altogether. Yeah, you need to get rid of that car altogether.

You can't afford that car. Yeah. It's killing you. Yeah, and I just recently got an expedition last year, which I just refinanced it last week and got it down to $130, $160 a month payment. What do you owe on it? It's about $7,000. Yeah, there we go.

Yeah, the Equinox needs to go bye-bye. Yeah. Here's the thing, okay? You cannot build wealth when you have cars that total up more than half your annual income, and you do. And you do. And I hate that I'm being a granddad. The little girl down inside of you thinks I'm wrong, but the woman who's a grown-up knows I'm right. Right.

You know as a grown-up that i'm right it's just not what you want to do it's like you know don't take my gummy bears away right but yeah you got you got to get rid of that stupid thing so hey so i'm going to adjust your withholding i'm going to get rid of the equinox and we're going to get another car for five or six thousand dollars we pay cash for soon or we pay it off really soon? We have a paid-off vehicle. We have three. We have one that's paid off. Oh, good.

Well, that makes it real easy to sell it then. Yeah, it needs a little work. Yeah, well, at $460 a month, you've got a lot of money to do a little work. Yeah, so we've got a little bit to play with here. I'm kind of trying to figure out which way to go. Then work your way right up those baby steps and you'll be fine right yeah i think i think hey listen here's the thing we have a system a class called financial peace university it's nine weeks long and you go to the class in a local church in your area but it's also online, and it comes with a one-year membership to the whole online thing,

and that includes the EveryDollar budgeting app tied to your bank called EveryDollar Plus. It's all included. It's about $600 worth of stuff. I'm going to give it to you free, but here's the way you're going to use it, okay? You're going to start going to class, and he's going to watch the same video you're watching while he's deployed and he can look at the every dollar app and track with the budgeting and you guys can communicate and make these decisions together while he's deployed okay because all of this is online as well okay if i give it to you will you use it and get your

life straightened out? I absolutely will. All right. Hey, we appreciate your service to the country, kiddo. Hold on. Kelly's going to pick up, and we'll get you guys in the class. With that online aspect with the EveryDollarPlus and the online with watching the videos, it's great for the Financial Peace University. The way we've redesigned it is really, really great for spouses that are separated by deployment

or one of them is a truck driver and travels all the time or whatever. If you're not able to be at home all the time, it's a way you can still work together. As long as you've got, you know, Internet connectivity, you'll be able to work together on this and pull it together. So that's why we're so excited about it, particularly the military application like that. It's just perfect for you folks in the military. So it's really, really cool. Yeah, it's amazing.

Isn't it kind of weird, y'all, how all of us do stupid stuff? And we know. We know when we're doing it it's like the little kid you know who's doing something mischievous and they're looking at but they're you know they kind of got that little look on their face that they're looking at their daddy you know looking at their mommy going yeah i just did something i mean even my little grandbaby's little toddlers you know four or five years old three years years old, they do something. They cut their eyes around.

They look because they know. We know. We know when we're doing something stupid. Now, there's a few times you do something stupid. You find out later it was stupid. But most of the time, you know, I'm signing up for a $460 car payment. Look stupid up in the dictionary. You'll see my picture.

You know. You know when you're doing that. You'll see my picture. You know. You know when you're doing that. I know when I'm doing that stuff. We all do it. But it's just, you know, the thing is to adults devise a plan and follow it. Children do what feels good. This is the Dave Ramsey

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Hey, Dave. I hope you're having a great day. I am. How about you? Awesome. Thank you. I am, too. First, my husband and I just want to say thank you so much for your generosity and sending us your FPU. It's been awesome. Cool. Yeah, and so we're just kind of, I don't think we're doing the math right. We have about $168,000 in debt, way too much of that in student loans. We make right around $70,000 a year.

So, actually about $19,000 of that is my car. It's got to go. It's got to find a new home. But I'm trying and I'm having a hard time selling it. It's not a higher, higher-end car, but it is an Infiniti, and so I'm climbing to where a lot of people are just not interested. So one, we wanted to see if you could help us figure out how long it will take us to be debt-free and then how we could probably sell our car. Okay.

Well, the thing is, the level of interest in a particular vehicle does affect its value. Obviously, more people liking a certain car, chasing that car makes it more valuable. Demand drives up price. Lack of demand drives price down. So if you're running into that, it may be that the car is not worth what you think it is if you're not getting any activity at all on it. What's it priced at? On the Kelley Blue Book, it's saying private sale is about $16,

just a little over $16, and we owe $19 on it. Okay, and you've got it on the market for $16 in Craigslist or whatever? Right at $17. Okay. Yeah, it's probably $16. Yeah. If you're not getting any activity on it. I mean, 15.9 or something, let's get the thing sold. Because every month you make a payment is, you know, your payment's 300, right?

Oh, gosh, I wish. How much is the payment? It's just under six. Oh, okay. I know. So if you make two of those payments, that's $1,200. Exactly. See, that's $1,200. Exactly. See, that's the difference in 16 and 14.8.

So you could have sold it for 14.8 and come out ahead rather than make two more payments. Okay, that makes sense. So let's drop it down to 15.8 and see what it does. See if you can get some activity on it and try that $1.99 psychology, so to speak. And let's see. What color is it? It's like a dark charcoal gray. It's an Infiniti QX60.

It's a nice car. Okay. Thank you. Good. All right. Good. Okay. As far as when you're going to get out of debt, the 168 includes this 19.

So, you know, we're going to have that down. So we're dealing with one you know 150 or so uh in debt making 70 and so i mean if you pay uh 30 000 a year it's five years okay if you pay 40 000 a year it's four years okay and that's you start kind of dividing it out plus or minus some interest but that's not going to be that far off so um i think you got a tough three and a half to four years ahead of you with working extra and selling stuff we've told the dog he's next well i think you're on track and i i think you're just gonna you know stay in the financial peace university groups you're on track, and I think you're just going to stay in the Financial Peace University groups.

You're in the membership and get in the online groups and all where you can stay connected through this process because you're going to need the encouragement. Keep listening to the podcast or the radio show on the local radio station, however you're consuming it. Just keep watching that. Stay in the rhythm of this because you probably got a three-plus-year slog through this, and that's with working extra and selling everything in sight and beans and rice, rice and beans. But it's just all I'm doing is long division, simple long division, $150,000 divided by three years is $50,000 a year, which means you'd have to make some extra money to do it in that period of time

because you can't do that on 70 and eat and pay taxes and that kind of stuff and keep your house and whatever. So it's just going to be a little while. And, of course, every time you get rid of one of those debts, that's going to increase your debt snowball speed. But without extra income, I think you're looking at 4 plus. With extra income, I think you're looking at 3 plus. And that's probably where you're sitting.

Matt's with us in Philadelphia. Hi, Matt. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up? So my wife and I, we currently own about $260,000 on our home, and that's the only debt we have.

We're both currently maxing out our 401ks at work. We have some college savings for my son, and we also both contribute to an employee stock purchase plan at work. And I was wondering what your thoughts were on that because what they do is they withhold money from each paycheck and then they give us a 10% discount on the stock for the company.

So I wasn't sure if it was better to keep doing that and have that money. No, I would throw that money at your mortgage. Okay, and also for a... And I would limit what's going into retirement to 15% of your household income. Okay.

So what's your household income? Take home or gross? No, gross. Gross, it's about $280,000. Oh, wow. Okay, well, you're maxing out everything then just to get there. Okay. So, you're going to get the house paid off pretty quick.

You're in really good shape. Congratulations. You're making great money. What do you all do for a living? We work in the nuclear power industry. Oh, okay. Good for you. Okay.

So, the reason I don't do the employee stock purchase right now until I get the house paid off, and I might not even do it later, a 10% discount is not that much. If you pull up your company, just pull up the stock price on your company over a 12-month period of time and look at the 52-week high, the 52-week low, you'll probably see volatility in excess of 10%. Yeah, you're correct. Yeah, and so what it amounts to is whatever your discount is could evaporate in 48 hours with a stock price move, and it often does. So it's not that great a discount.

It's not like you're stealing this or something. If you want to have some of your company stock in your portfolio long term after you get your house paid off, don't allow it to become more than 10% of your net worth because then you've got too much tied up in something that's too risky. But that's only if you're just in love with the idea of owning stock in this company because you think it's going to do really, really well. You know, you just really think it's going to really go home run, and you don't want to miss out on it. Well, then you'd put some money in it. I personally do not own any single stock. I don't like the risk associated with it.

So, hey, thanks for the call. Open phones at 888-825-5225. April! You know what April is? Financial Literacy Month. And we are doing our Teacher Appreciation Giveaway sponsored by Jackson Charitable Foundation. Teachers can win, enter to win, no purchase necessary. Some amazing prizes.

We love classroom teachers. You're a classroom teacher, you're just a rock star. We're going to let you win amazing prizes. The grand prize is a $5,000 vacation getaway. Several $1,000 gift cards are given away. Several Ramsey Education Professional Development Certificates are given away. We've got some of your professional development you have to do, your continuing ed. We got some of it.

There you go. We're going to give it to you. And all of this is to celebrate teachers. We think teachers are awesome. So go to DaveRamsey.com slash teacher. If you're not a teacher, share this with the teachers in your life today and let them know. Go to DaveRamsey.com slash teacher. No purchase is necessary. A $5,000 vacation giveaway just for you teachers.

I wrote a blog on Teachers Are Awesome. And it actually had nothing to do with this, but it actually ended up posting around the same time we were doing this stuff. So we put the teacher giveaway across the bottom of it. But it went completely viral. And now about 5 million people have read it. I just got the stats back between Twitter, Instagram, and Facebook. The number of impressions on the thing.

If you've not read it, teachers are awesome. It's the story of the time I flunked the second grade. Yeah, check it all out at DaveRamsey.com. Just click on the blog. You can find it. It's the story of the time I flunked the second grade. Yeah, check it all out at DaveRamsey.com. Just click on the blog. You can find it. It's right there. Or you can follow my Facebook page. It's on my Instagram. It's been posted on Twitter. You'll find it. It's out there. This is The Dave Ramsey Show. Hunter is in San Angelo, Texas. Hi, Hunter. How are you? Pretty good, sir. How are you? Pretty good, sir. How are you?

Better than I deserve. What's up? So, I'm 24 years old. About to pay off my contract in six months. I bought a house about a year ago almost, and I'm kind of ready for another one. I have my first one that I rented out already for at least a year. I'm kind of...

I don't know how I go about my second house to buy. Okay. Well, I own quite a bit of real estate. I love real estate. I started buying real estate. I got my real estate license when I was 18. I started buying real estate when I was 22. And I went broke in the real estate business, so I know what not to do.

And then the second thing I go around, I don't borrow money. So you wait until you have cash to pay off the entire house? Yep. Okay. Here's what happens, okay? It goes slower until it doesn't. Until you get enough houses. It goes slower until it doesn't. Until you get enough houses.

Yeah, because the cash flow per property is outrageously wonderful because you don't have any payments. But the first two or three you get a hold of, it takes a lot. It feels like it takes forever. Yeah, that's where I'm coming at because they're paying me and I'm making you know money off of it now granted it's not a lot i'm only making you know three hundred dollars profit a month but that's also you know profit into that so they're paying that's that's what is called gross profit and then after your expenses uh associated with repairs and vacancy and the occasional legal bill when you have to evict someone and all those kinds of things, you're not going to net anywhere near that. And that's only $3,600 a year.

Yeah, yes, yes, sir. So that's not going to get you there. So you currently own the home you're living in? No, I don't own it. I don't own it, no, sir. You're renting it? No, okay. Oh, the home you're living in? No, I don't own it. I don't own it, no, sir. Are you renting it? No, okay. Oh, the home I'm living in?

Mm-hmm. I rent from a, I just live in a RV with a buddy, so that rent is only $300 a month. So you're renting from your buddy? Yes, sir. Okay. You're paying $300 for the opportunity to be a roommate in an RV. Yeah, I know how stupid that sounds. No, I'm not saying it's stupid.

I'm just trying to make sure I understand. Okay, and then you bought how many houses? I've only bought two, and I've already sold one, and I bought another one. How many houses do you currently own, sir? One, sir. Okay. And what do you owe on it? Probably $70,000.

Okay. And you said you're 24? Yes, sir. Good. Okay. You owe $70,000 on it. What do you make? What's your income?

What's my gross? Probably $80,000. Okay. What do you do? I work for FedEx. I'm a CDO driver for them. Good. Good probably 80. Okay. What do you do? I work for FedEx. I'm a CDO driver for them. Good. Good for you.

Okay. So you're willing to sacrifice to win, obviously. You're willing to live in an RV with your friend to keep your personal overhead down so that you can do some other things. So what I would do is say, I'm going to take about two years and get this rental paid off, and then in the following two years, I'm going to save up and buy another one for cash. And it'll probably only take... Four years to buy another one?

Yeah, it'll take you about two years. I mean, you think you're making 80 if we put back 40 a year, right? Yeah. You might be able to do more than that because you're used to living on nothing. Yeah, I'm a very cheap guy. Yeah, you're pretty frugal. So, I mean, you might do do more than that because you're used to living on nothing. Yeah, I'm a very cheap guy. Yeah, you're pretty frugal. So, I mean, you might do it faster than that, but pay it off as fast as you can pay it off,

and then save up and buy the next one as fast as you can. Doesn't that kill your credit, though? That's what I've heard. Mm-hmm. Okay. Kill your credit. Oh, you want to build your credit score. You don't want to build wealth?

I mean, credit is power is always what I've been told. Yeah. Well, they were told that by broke people. I can't argue with that one, no, sir. Yeah. We just finished the largest study a millionaire has ever done, and what they have done, the main data point we found is they've avoided debt because your most powerful wealth building tool is your income

when you avoid debt you lower your risk and increase your returns long term you don't borrow so that later you can borrow so that later you can borrow so that later you can borrow yeah because then you're not doing anything yes sir all you're doing is making banks buy nice furniture for them yeah never been in a bank with bad furniture have you no no that things are very nice yeah so hold on i'm going to send you a copy of the millionaire book it's called everyday millionaires it's got 140 of the statistics in it that we found in the research and uh and a bunch of inspiring stories it's written by number one best-selling author chris hogan this book is a number one bestseller.

I think you'll enjoy it because you are a go-getter. You're willing to pay a price to win. You're willing to live like no one else so that later you can live and give like no one else. You're willing to live and sacrifice to get ahead. And you are really on fire. I just don't want you to get tied up with debt up to your eyeballs so you can't breathe. That's what happened to me when i was your age and i ended up going broke because of it i ended up starting from

nothing hunter i had four million dollars worth of real estate by the time i was 26 i owed three million on it so i had a million dollar net worth i was a millionaire and i made two hundred thousand dollars i made good income back in the 80s when dinosaurs roamed I had a million-dollar net worth. I was a millionaire. And I made $200,000. I made good income back in the 80s when dinosaurs roamed the earth. And, you know, but what happened was that I had so much debt that it caught me, and the banks called in the debt, and, you know, I spent the next two and a half years of my life losing everything I owned. So while I was able to build a nice portfolio of real estate,

I lost it all because of the risk associated with the debt. The second time, I haven't lost anything. I've made money every year. I've gotten wealthier every year for the last 30 years because I've been more the tortoise than the hare. The best way to get rich quick is to get rich slow. Hold on. We're going to send you a copy of this book. You're going to enjoy it.

Open phones at 888-825-5225. Kathy is in Dallas. Hi, Kathy. Welcome to the Dave Ramsey Show. Hi, Dave. How are you doing? Better than I deserve. What's up?

Thank you for taking my call. I purchased FPU towards the end of the year. I took your advice, your team's advice, and bought it as a Christmas gift for myself. And I also got with the church and went through FPU. January, February, I had some things that happened. Life happens. And I got a little discouraged. But I've been able to pay about $4,000 for the debt off so far. Thank you. I have $100,000.

What happened in January and February? I'm in the Dallas area. And my AC unit, the same day, my AC unit and one of my vehicles went down so um i'm single what did all that cost pardon me what did all that cost um the ac unit was 5500 and um my truck was uh 1250 okay 65 so you replaced the ac unit. You didn't fix it. Right. Yes. Yes. I replaced it because I have an 06 home.

It was going to take a couple of thousand dollars to fix it and, you know, trying to be smart. I don't want to deal with it. So I'm a female. So here's what we're doing. We're riding along the path, and you got knocked off the horse. I got knocked off the horse. And you got back on the horse, but you're kind of sore from getting knocked off right and i wasn't i did not uh dissolve my thousand dollars uh savings okay um

i still had that first baby step but and i was also able to pay off four thousand dollars for the debt my question my one of my main questions to you is i have um uh like i said i've been on my job for 30 years um I have a life policy with my job as long as I'm employed. I'm looking to retire. I'm 54. I have another life policy on myself and two on my only child that's 34. And in the program, you talked about you know the life policies and your net worth so i was wondering should i get rid of the life policies uh well you should the 34 year old should be buying their own stuff are you paying for both of these yes i'm here i since he was 18 i just you know 18 year olds are not real smart, he would pay for his own stuff.

He's 34. I mean, he's supposed to be a grown-up. So he can take it over and decide what he wants to do with it. And then you decide if you need life insurance. And if you do, you would buy term life insurance, a whole life life insurance. And you put that in place before you dropped any other insurance that you've got in place. But I think you got this. You just need to keep riding, kiddo.

You're on track. our scripture of the day first corinthians 15 58 therefore my dear brothers and sisters stand firm let nothing move you always give yourselves fully to the work of the Lord, because you know that your labor in the Lord is not in vain. Winston Churchill said, Continuous effort, not strength or intelligence, is the key to unlocking our potential. You know, what's interesting is about that and that's true um you don't necessarily get to choose your intelligence or even your strength you do get to choose continuous effort continuous effort not strength or intelligence is the key to unlocking our potential. The ability to continue to hustle and grind, the ability to focus and stay on something, the ability to be intentional rather than constantly distracted, completely changes

whether or not you succeed in a given area of your life, a given space of your life. Sticking with it, the number one character trait that causes success is not 4.2 GPA. It's not that you're a rocket scientist. The number one cause of success is perseverance. As a matter of fact, most people who build wealth are not geniuses. They're not savants. The vast majority of people build wealth. They're bright.

They're usually about a 3.0 student. I mean, they're not making 1.6s, but, you know, they're bright. But they're not the savants. They're not the brilliant ones. Now, the brilliant ones sometimes have some very cool careers and make a lot of money in a lot of cases and build wealth but this thing of you can't make it because you're not smart enough you're probably smart enough you're probably smart enough you can't make it because of dot dot dot yeah you can again i can find someone that's the same color as you raised the same way you were raised the same sex as you the same toxic family upbringing as you who made it i can find them is it tough oh yeah it's tough that's why we're here we're here to help you

it's hard and sometimes it's lonely and sometimes you get tired and discouraged but there's just this fine line of people that punch through they just don't quit one of my favorite memories of my friend trett Cathy, who's passed away now, started Chick-fil-A, iconic person, and his little wife, Jean. His little wife, Jean, was about 5'2", just a cute little redheaded lady. I don't think she was redheaded anymore, but she was redheaded. And they're in their 80s, and i was down doing an event i was doing an event with them actually out and i believe san diego is believe where we were and we're walking down we went up in the suite and sat and talked to

them for a little while before i went down spoke for their one of their big events and we're walking along and they're holding hands and i'm talking to them and i'm like so you guys have been married over 60 years yeah yeah and i said miss gene i'm a hard-driving entrepreneur like mr tr not kill him and she started laughing and that twinkle in her eye and she just smiled and said patience that was her answer patience it's how you do it i mean it, this is not hard, y'all. It's just hard.

The stuff we teach on the money piece, the stuff we teach on how to win at life, how to be a great leader in your organization, it's easy to understand. It's just hard to do. It's that simple. Open phones at 888-825-5225. Our question today comes from blinds.com. They have a 100% satisfaction guarantee. That means even if you mismeasure or you pick the wrong color,

they will remake your blinds for free. You get free samples, free shipping, and with the new promos every month, you save even more. Use the promo code RAMSY, and you'll get the best deal. Amber's in Texas with the new promos every month you save even more use the promo code ramsey and you'll get the best deal amber's in texas with the question what are your thoughts on mortgage recasting if someone's trying to pay off their loan as quickly as possible is this something worth doing or will it be no benefit it's really no benefit recasting is resetting the calculation of your payment based on a new amount and it doesn't change a thing on a traditional mortgage and so if you have 10 years left to pay and you

recast it on 30 years uh your payment goes down based on a 30-year calculation rather than a 10 year calculation and then you still pay it off in 10 years, you saved not one penny because the calculation is exactly the same. Mortgage interest rates on traditional first mortgages, FHA, VA, Fannie Mae, are calculated using the same formula as what we call simple interest. And simple interest is you pay interest on the outstanding balance. So if your payment is $600 a month, how much of your payment goes to interest and how much to principal?

Well, the interest rate annually divided by 12 times your outstanding balance, if you have a 6% interest rate divided by 12, it would be half a percent a month. Times your outstanding balance is how much goes to interest that month out of the $600. The rest goes to principal. So anytime you pay extra on the mortgage, the next month you have a lower balance. And so when you multiply that half a percent times that lower balance, more of your $600 then goes towards the payment. And if you're looking at one of those amortization schedules,

those little printouts you can get on your mortgage, what that does is it slides you down in the amortization schedule arbitrarily to the loan balance. And so if you pay $10,000 off, go over on the right-hand side of your loan balance, slide down to $10,000 less, and then run your finger over, and you can see how much of that month's payment is now going towards interest, which would be a lot less than it would have been had you not reduced the balance by $10,000. And they only do that once a month.

So you can pay five times in a month on a mortgage if they'll let you, and you have accomplished nothing. One payment a month is the only thing that helps the interest change, because they only calculate the interest once a month on that and so recasting it over a different number of years is the same exact issue it doesn't change a thing unless the interest rate changes and if you pay it at exactly the same payment you're still going to pay it off in 10 years, and you didn't save a dime on interest. So if you want to recast it for a convenience of some kind, and the amount you're paying to recast it, sometimes a couple hundred dollars,

makes it feel right to do it for whatever reason, then you can look at doing that. But it does not help you get out of debt faster to recast it. You can just pay it faster, and you'll be there. That's all there is to it. So, hey, thanks for the question. We appreciate you sending that in. Ryan's on Twitter following me at Dave Ramsey, which there's about a million of you there, literally. I'm in the middle of baby step three.

My car needs to be replaced. It costs more to fix it than what it's worth. What should I do? Well, you would call that an emergency, and you would sell the car for whatever you can get for it with it broken, and you can take some of your emergency fund and put with that amount and buy another car for cash. Then rebuild your emergency fund to a full three months to six months of expenses. And then start saving to move up in car again.

Because you're probably driving a hoopty at that point. And you're going to want to move up again with cash after you get your emergency fund fully funded. But you don't go buy a $25,000 car out of your emergency fund. That much car is not an emergency. Transportation is an emergency. That puts this hour of the Dave Ramsey Show in 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 scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.