The Ramsey Show - App - Cleaning Up a Financial Mess (Hour 1)

Episode Date: November 2, 2023

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, number one best-selling author, host of The Rachel Cruz Show, co-host of the Smart Money Happy Hour on the Ramsey Networks, and my daughter is my co-host today. Open phones at 888-825-5225, and we're going to talk about you right in front of you. Dwight starts off this hour in Seattle. Hi, Dwight. How are you? I'm doing okay. How are you, Dave? Better than I deserve. What's up? So I'm going

through divorce right now. I've got no money saved. My bank accounts are actually negative. I'm about $40,000 in debt, and I'm just trying to figure out where to start. I've only recently started listening to your podcast. I'm sorry. How long were you married? Five years. What's your income? So right now I work at the post office. I make, and I also have a side job at Applebee's. I do once a week on my day off from the post office. So I make roughly $5,000 to $6,000 a month right now.

Why do you have no money? Everything was basically going into my past living situation. And then we were kind of arguing for a while and I kind of came to head and they kicked me out. And so I had to sign a lease, which hit up most of my last paycheck. Hmm. Okay. Dwight, is the divorce, is it final? Not yet. Not yet, okay. No. How old are you?

24. I'll be 25 on Thanksgiving Day. Wow. Okay. We've done, I've done, and ramsey has done crisis financial counseling dwight for almost 40 years and one of the things i've learned to do when i'm in these kinds of situations or when i'm helping somebody like you that's in a situation like this is we need to boil this down to the next right three or four things and not worry about the big stuff off in the distance right now. Because right now you've got some very immediate things that you

need to address, and I really don't care about your retirement investing right now. You follow me? It's not a big deal. We'll get to'll get to that later but and uh but right now we need stuff like a positive bank balance uh and no more no more hot checks going out the door no no more overdraft fees going out the door right now we need to make sure the lights and the water are on in the apartment and the apartment's paid and um you sounds like you got that started. So we're taking care of food, lights and water, shelter, transportation. How much is your car payment? So I actually don't have a car right now. You don't have a car.

Okay. How are you getting around? Where I'm living has a public bus system that is free of charge. Okay. All right. And so you and your soon-to-be ex had one car? So technically I have a car, but it's in Texas, which doesn't help me. Okay.

So she's in Texas? No, she's here with it. It was a very sudden transition up here due to the given situation. And so I just kind of flew up here. Okay. Why is your car, you were living in Texas before?as before correct okay so you just jetted out literally okay correct and uh the car is parked where at your family or with her my family on my grandmother's property on your grandmother's property you have a relative that can bring you your car? It's honestly not worth bringing up here. It is. It's more than walking. It would cost more than it's worth in gas to bring up here.

So the car's not worth $400? So the problem is it only gets eight miles per gallon. It would cost roughly $2,000 in fuel to drive it up here. And do you think that's what it's worth i wouldn't even say it's worth that okay so do you have a relative that will take the car for you and sell it today i can the biggest issue is trying to find a buyer no it's not they can sell it today. It's a $2,000 car. Just go to the local junkyard, go to the tote-the-note lot, and sell it today. You need money. You are broke.

You have a car sitting there. Okay? So what's happened is there's so much freaking drama in your life that your brain's not even functioning. You've got a lot of fog because these are very clear things you should do. Immediately, you should sell this car. Immediately, you need to take the money and find you a $2,000 car and buy one at a garage sale in Seattle so that you're not walking. And then immediately, you need to get two more extra jobs. And then immediately, we're going to start stacking up some cash and put some buffer around you.

You are not on the edge. You are falling off the cliff. We've got to get you back up on top. The lease you signed, Dwight, for a living, is it reasonable for what you're making right now? So it's $850 a month, and it includes utilities and Internet. Okay. That's great. Yeah, you can handle that on $5,000?

Yeah. Okay. And your job is in Seattle that makes $5,000? So I don't actually live in Seattle. I live out on one of the islands about two, two and a half hours from Seattle. It's just the closest place to me. Okay. But my point is you're making $5,000 working for the post office there.

Yeah. Okay. Not in Texas. Hello? Yeah, correct. Not in Texas. Okay. All right.

So what you've got to do is break this down, hon, and a little bitty baby steps. About three or four things to do right now. Turn the car into cash right now. Get some more jobs right now. Delivering anything. Cutting dogs' hair. Walking dogs. Piling up dogs' hair.

I don't care what you do. Cut grass. Blow leaves. Get you a leaf blower. Rich people are afraid of leaves. Get you, you know, put up Christmas trees. I don't care but right now you're going to start going to make some money because right now the reason

you you're traumatized and talking to you your your verbal pattern says trauma and so you're having trouble even staying with me when we're talking through these things so you've and that's all due to you having, falling off the edge of the cliff and you're terrorized by your financial situation. And I don't blame you for that, but the way to fix it is to immediately start stacking cash from any source that you can that's legal and moral. Immediately, spending nothing,

but piling it up, piling it up, piling it up, and let's take care of food, shelter, clothing utilities yeah and any expenses dwight you can cut that we just you get in the habit of just having whether it's subscriptions memberships like restaurant like whatever the thing is like whatever you can cut finding that margin is going to start to give you peace even if it's 30 bucks here or there at this point that's huge so like go through and cut things exactly no car payment 850 rent that includes utilities dude you're making 5 000 plus a thousand with applebee's on the weekend that's six thousand dollars that's a five thousand dollar spread if you don't blow

that on the weekends doing stupid butt stuff so you've got to tack this together and start stacking some cash. Well, we've had a bunch of new wonderful things come out this fall. Dr. John Deloney, about a month ago, we launched his second book. It comes out at number one, his second number one bestseller, Building a Non-Anxious Life. Yesterday, we launched George Campbell's new new book breaking free from broke and pre-sale the book will actually come out in january on january 16th but um a bazillion of you bought the book yesterday thank you for that we appreciate it the pre-sales help us a bunch. It helps George a bunch. Helps the marketing and everything. And this coming Tuesday, Rachel, the mother of three of my grandchildren, has done a new children's book, her first children's book,

I'm Glad for What I Have. And it is a book about contentment, obviously. Yep. And it is the illustrations are world-class because the illustrator that we brought in is world-class amazing yep lauren lauren gallegos gallegos okay i didn't know i knew i was gonna mess up the name but yeah um but the book is um comes out tuesday and we've already sold thousands and thousands of them in pre-sale just some of you've heard about it on rachel's Instagram and so forth.

But the quality of these illustrations and the quality of the message for the little ones is, I can't get it open, it's stiff, it's brand new, is absolutely incredible. And so just to read to the bedtime story age. Yep. And so we've got a bunch of those in the Ramsey clan right now. So Papa Dave and Mimi will be reading this, reading Rachel's own book to her own kids and her cousins. Yes. They're cousins, I guess. I know.

I know. If you're a parent. I got two of them tonight. I got Charles tonight. Yes. And then I just got a text from mom. Y'all are going to have all of them, I think, tomorrow night. Oh, how wonderful.

All seven. Thanks. Yay. But yeah, if you're a parent of kids, I'm like, it's such a weird time to be a parent, especially when you're through the lens of money and you're trying to teach them about money because everything's on your phone. You're buying things on Amazon.

Things just show up at the door. I mean, even cards, even debit cards aren't being used as much. It's all just Apple Pay. I mean, it is wild how transactions and seeing money not being even exchanged right but you're paying for stuff and your kids don't see it and so it's like magic oh yeah my kids think that like if you're five years old stuff just appears oh my three-year-old was like let's we should just amazon it mom and i was like oh gosh yep that's like a thing now so I wanted them to fully embrace this idea

and it's something we talk about all the time is that like it's okay to have stuff like we can have toys and you can want things but that excitement that you have with that new toy it fades so quickly and so if that is what you're depending your joy and your happiness on it fades it has to come from somewhere bigger and so teaching them that yeah your stuff is not going to fulfill you the way you think it does and so as a parent um it's a it's a shorter book so you're welcome parents and it rhymes it's it's just a sweet lesson in contentment so i'm glad for what i have that's right so pre-sale is you can buy it now at ramsey solutions, and we'll ship them Tuesday.

That's what it amounts to. Yes. So they'll start being on the shelves officially on Tuesday, and you'll find them wherever great kids' books are sold, and certainly RamseySolutions.com. In other news, on the other side of the spectrum, is shutting down the uh best the largest budgeting app our every dollar is the best budgeting app by far it's uh but there's about you know there's about four or five people in this space uh of budgeting apps that are of size we're certainly one of them with

every dollar mint has been the big dog for a while. Intuit owns it. They bought a few years ago Credit Karma, and they've been using Mint as a feeder to Credit Karma. They were using a free budgeting tool with Mint, and they just wear you out inside of Mint to get you to take on debt products and to worry about your credit score with Credit Karma, and they're always peddling you credit cards and everything else. And apparently they gave up on the budgeting thing. So Mint is shutting down. Mint, the budgeting app owned by Intuit, is shutting down.

Intuit announced on Tuesday that Mint will get absorbed into its other service, Credit Karma, when it officially goes away on January the 1st. It's not clear whether Credit Karma will get the budgeting features that Mint is known for. Actually, it is clear because on a support page on Credit Karma's website, into it says the new experience in Credit Karma does not offer the ability to set monthly and category budgets. There we go. Credit Karma's got an experience, but it's not their credit karma's got an experience but it's not a budgeting experience so uh we invite all of you that were on mint uh to come check out every

dollar it's free to check it out and if you want the bank connectivity there's a small fee to do that uh for the uh further enhanced experience with every dollar every dollar is by far the most robust elegant um budgeting app out there it was it's a lot better than mint was to say the least but um mint is 100 free uh into it also owns some of the connectivity software that connects to banks and uh so we actually used to when every dollar first started we used to rent their connectivity for our connectivity, and we moved off of their platform, thank goodness, because now we'd be screwed, like you people that are in Mint. You've got all your budgeting stuff in Mint now.

So you can come on over to EveryDollar. We welcome you. And, my goodness, we're excited to welcome you. It's kind of a big deal in the budget in our world. Some people may be like, okay. But I'm like. Well, they paid $170 million for this. They went into it, bought it a few years ago.

Purely as a lead magnet. Right. It's there just to draw customers into their debt products like credit card and into the credit cards. And so Intuit paid almost $200 million for it. And then, gosh, I don't know how many years ago that was it probably 10 or so years ago but um they should have called me i would have bought it from them but oh well not for 170 million wouldn't have paid them that wouldn't have paid them that for it but before you shut it down get nothing i'd give you something you know and uh so but anyway y'all

can come over we don't need it though we got every dollar well we don't need it but i'd love to help all those people. Yeah. And so that's the thing. So, yeah, any of you that are there, spread the word that every dollar still is the, it's the only one of the top budgeting apps that does have a free feature that you can just jump into it for free. So I recommend the premium.

It's much better because when you connect to your bank, the transactions show up automatically and you just drop them into your budget. It's much better because when you connect to your bank, the transactions show up automatically and you just drop them into your budget. It's much better. It's worth a few dollars to do that. But we have to pay for that service, so you have to pay us for that service. That's how that works. But it's such a, especially for those of you listening that are kind of newer to all of this, I'm telling you, getting in the rhythm of budgeting,

it gives you that level of control because money can feel so out of control if you don't have a plan, if you don't know what's going on. And it just feels like this mystery when things are just in your head. I think they are magnified, the fear, the disillusion, all of it. And so having facts down and seeing your numbers and just knowing, knowing what the month is, knowing what you're planning to do and food for groceries and restaurants and, you know, kids, you know, Christmas presents coming up. We have a we have a Christmas line item in our budget for this month because we're gonna start buying Christmas gifts. I'm like, there's just something about having that control. And you guys I mean, I and I do literally open up every dollar every single day. And I'm a

free spirit spender so like i'm probably the least likely to be the one that like loves budgeting but every dollar has just been in this rhythm for me and you track transactions you know what's going on i'm like it's just it is the it's the it's the first thing to get started like even if you're in a freak out zone it takes a lot of the freak out away i almost wanted to tell elliot that where i'm like you'll know where your money's going if you if every dollar, like do a budget. And it just gives you this sense of control. And it does make you say no at times. And we all hate that.

It makes you know that you should say no. It doesn't say no. That's true. That's true. That's true. You know, you are saying no to you because you want to say yes to you later. And you're making a decision on purpose instead of by chaos. Here's the weird thing the opposite of good times or the thing that is more stressful than bad times is not knowing

yes not knowing where you are is much more anxiety inducing than knowing where you are and knowing in detail that it's bad and that you can get out of it right even if it's bad. And that you can get out of it, right? Because then you can create the plan. Even if it's bad, knowing is less stressful than, oh, I have no idea. Because the drama gets all twisted up in your head, and you do a little drama queen dance between your ears and blow everything out of proportion. But when you write it down, when you put it down, you go, okay, I got enough for food. I got enough for lights and water. I can pay the car payment. I can pay the rent and the mortgage. Oh, so I'm only stressed about these three things, not instead of 38 things. Yeah.

Isn't that interesting? This is the Ramsey Show. Hey, you guys, health insurance costs are only moving one way and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981.

And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets at chministries.org slash budgets. Rachel Cruz, Ramsey personality, number one best-selling author. My daughter is my co-host today. Kara is with us in Newark, New Jersey. Hi, Kara. How are you? Hi, Dave and Rachel. I'm doing well. Thank you so much.

Sorry, I'm just a little bit nervous. That's okay. We've never lost a patient. What you got? You're good, Kara. So actually, it's kind of funny. I tried to get in last week, the call, but I just couldn't get through. And I just want to really express gratitude to the screener for letting me be on today. Um, it's the timing is very funny. Um, because basically eight years ago, my boyfriend and I moved in together and I, um, ended up accidentally

getting pregnant and we basically just reacted to life. We, you know, just everything that came up and we, you know, re reaction, reaction, reaction, reaction, finance, finance. Here we sit today and I'm very blessed. We have, you know, two very healthy, beautiful little girls and a home. But we also have $100,000 of various debts and a mortgage. And coincidentally, we had been planning this for a little bit but we're actually going to town hall tonight to get our marriage certificate and to move forward as a legally married couple oh congratulations well congrats that's awesome thank you so much yeah no we we never like not

planned on getting married it just you know when you're you've you've got two kids 18 months apart, it's like John Wayne. You just didn't plan on anything. Yes, yes. We didn't plan anything. And, you know, I have to say we ended up okay. Like I said, we're healthy. We have a beautiful home, this and that. But, like, we're ready to do, you know, we've done things our way for so long,

and we're ready to do things the right way. Well, I'm happy for you. Congratulations. How can we help you so i guess my question was i'm a newer ish listener um and i just i understand the practical of okay yeah you go to the bank you you know you have a joint bank account but i would just love to hear your thoughts on combining finances for the first time as you you know, as a couple. I know there's probably a lot of people out there who are like me, you know, been shacking up as, you know, you were saying, but, you know, what is your advice on taking that step and combining finances and moving forward

that way. budgeting together, all of that is pretty, in a sense, self-explanatory. But I think the bigger underlying picture of all of that is knowing that you are on the same team with the value system around money. And so I think what happens with a lot of couples is one feels like that they're being controlled by one spouse. One spouse goes and spends whatever they want. One wants to go on vacation while one wants to upgrade the car, you know, so there's just all these different things pulling at a couple. And so as much as you guys can be on the same page with just your values and sitting down and saying, hey, you know, it can be something as simple as like, what are the five things that we believe about money? What are the five principles we want to live by? What are the things that we want to see as our family that we want? Goals, values, like all of

those kind of conversations. And it can look like, hey, we don't want to have debt. Maybe a goal is we're going to get out of debt. And a value is that we're not going to use debt in our family. Maybe it's that for these girls, we have a goal to maybe help pay for their college when they're 18. And that's a goal we're going to shoot for. You might want to model generosity before them. We want to be givers. And what does that look like? Our family wants to be generous.

We want to be a generous family. Yeah, so combining it, I think the value system, combining those together is really important. And then also to know, Kara, and I know you know this because you've been with him for eight years but you know people are opposites too so like forever and ever amen my husband will always love having four excel sheets looking at all different parts of our money all the time and I don't want to look at those you know even though I'm the one that teaches about money every day I'm like I don't want to but that will always be him and that will always be me and that's okay he's the nerd she's the free spirit we're gonna have different interests in our involvement to the detail of it. But overall, as our family, we see ourselves as one and we're moving in the same direction

from a value standpoint. And then the tactical side does play in that I think is important that you guys, yeah, you see yourselves as one income, that it's not just his income, your income, that together we are this family. We are one in that. You change your pronouns. Change the pronouns. Sit down and do a budget together.

We have $100,000. We have a household income of X. We are doing this. Not his truck, my truck. Now, we still call it his car, my car, and my house because it's the one that Sharon drives. But we understand that we own those cars and um i've actually owned a car that she has not has never driven i've owned it

three years until the other night and she finally drove the little sports car home oh funny and i was scared to death but yeah but she she drove a better driver than you i couldn't breathe it's still our car right and so yeah've got to change your pronouns, and you're going to put the whole thing, our income, into this account. We're going to take care of our bills, address our fears, address our dreams, and make sure they're aligned with our values. What this forces you all to do is to reconcile the differences in the way you are brought up, the differences in the way you view the world. One's a one's a free spirit one's a man one's a woman they see

things differently uh the differences in these things are have to be reconciled it forces you to do that so it forces you to deepen your relationship when you combine your accounts so it's an excellent question given the uh momentous occasion that is today for you. Thank you. Yeah, I am. I'm resonating with all of that. I am definitely the nerd, I guess. Yeah, you made this phone call.

You called the Ramsey Show on the day you're getting married and you want to know about money. You're definitely the nerd. Free Spirit would have never called today i love it that's awesome so great i'm the nerd i would have done that i'm planning out everything all the time we're going to give you a wedding gift and we're going to give you financial peace university and every dollar premium together because you guys sit down and go through these nine lessons together uh join a class they're doing classes now by season of life so you guys can do the newlyweds a bunch of newlyweds in there um but do that go through this because this that will give you guys a common language too especially

when you do something together like that where you're watching these videos you're going through these exercises do that together because that's a great foundation and then every dollar premium that's just it's amazing how old are your babies seven and five okay we're also going to send your redshirt a new book i'm glad for what i have for the five-year-old okay thank you so much now you're the first that's the first one of those we've ever given away i'm so glad yes what a great wedding gift very cool thank you all right you hang on uh we'll have austin pick up and since he was so nice to you before now he's even going to be nicer and give you a bunch of free stuff so um congrats cara and i just appreciate you even asking that question and especially given your situation you guys have

been together for eight years you could have legally had the document and kept living as you did but you're feeling this shift of what marriage does of oh my gosh there's this level of unity that i want and i want something different and you guys you said you had like a hundred thousand dollars in debt and a mortgage and all of this right so you're kind of at this cusp of like okay this is a new season it's a new it's a new life for you guys this is one of those mile marker points that you can put in your story and saying okay this is it no in november we married. We started changing the way we're handling money, and that's going to trickle into other parts of your life to care, which I'm excited about for

you guys. It's going to increase communication. One of the few things you can find a total agreement on, when surveyed ladies that are married, they ask, what would you like more? And they said 97% of the ladies surveyed. 97, that's all of them. So you know what they want? More communication. To which the guy said, right? And so, yeah, but more communication. Let me give you a great communication tool where you actually communicate feelings and you actually communicate things that matter and passions and dreams it's called a budget it forces you to communicate

about every detail of your freaking life and so it's a communication stuff school stuff i mean oh yeah it all comes out there where are we going for thanksgiving which parents house it's in the budget it makes you makes you decide this is the ramsey show rachel cruz ramsey personality number one best-selling author my co-host today brett is in providence rhode island hi brett welcome to the ramsey show hi hi How can we help? Um, so I, we are moving, um, and we're selling the house and we're making a profit on it. And, um, recently I have been seeing your show on like a little clip and I'm been changing my mindset of maybe, you know, having leased vehicles isn't the best and smartest decision I've ever made. And also, though, there's, we have a plan to use a good portion of the money from selling

the house to use that as a down payment after a year of us renting because we don't know the area. We're moving down to Orlando. So we're trying to get a, you know, it didn't feel right, quite unseen just to purchase a house type thing. So we're like, we'll rent there, get a feel for the area, you know, know where we want to be school-wise. That sounds wise.

So how much is, how much are you going to get out of the house? What's going to be the cash in your hand i'm guessing anywhere between 50 and 60 000 okay and what's it take to pay off your cars um to pay off we want to be able to pay off both of them if uh so i have you you owe more than 60 000 on your cars uh well they're leases, so. I know, but they have a payoff. They have an early buyout provision. If you call and ask for the early buyout, have you done that yet?

Yeah, so I know the early buyout for my truck is $49,000. And the other vehicle is probably around, I would guess, around like $40 or so. Wow. You're deep in some cars, dude. Yeah. What's your household income? I do $180 a year. Okay.

All right. Well, a good rule of thumb thumb if you want to build wealth is to not have more than half your annual income tied up in things with motors and wheels you are right on that bubble okay yeah um you're not over it but you got a lot of car debt um and you ain't got much home equity which is kind of weird with that income. How long have you been making that kind of money? I've been making, I made $160,000 last year. Yeah. So, you know, a little bit of a bump.

I've only been making this money since like about, I would say, 2021. Okay. Just a few years. That makes sense then. Okay. And how old are you? I mean, we bought this house i'm 35 i bought this house with a va loan so we did no money down yeah i can tell yeah yeah okay and i purchased the house and in two years somehow we're selling it um for a profit, which is just craziness. Brett, I love vehicles. I'm a car nut.

Mathematically, as a financial person, I hate them because they're the largest thing that we all buy that goes down in value, and they go down in value rapidly. And so you've got a lot of money tied up in things that go down in value. And so here's what I would do if I woke up in your shoes. I would sell some of these vehicles, if not one of them, if not both of them, and move down in vehicle to have less money tied up in things going the wrong way so that I can put more money into something that's going up in value, which is the purchase of your home. So I would pay off one and sell one and get you an inexpensive car to drive and pile up cash during this year for your down payment if I were in your shoes. Do you have any money saved, Brett?

No, because obviously with moving in expenses, um, our savings has been burned, burned paying for, you know, transportation of one of the vehicles because we're driving, but we can't drive both vehicles and, you know, paying for a pod to transport. Yeah. But all of that, but still you're making almost $200,000 a year and you had no money. You just had 10, 15,000 bucks to make the move was all and you burned it. So you've got to get some money back in your hands because you put it all into vehicles. And so I want you to make 175, $200,000 a year and have some money, not be broke. And that's what I, if I were, if that's what I would like for you, you know, I love you.

I want you to win. And that's what I want for you. So if I were in your shoes, as much as I love a nice truck and I've got a, I've got a Ford Raptor that is an absolute beast. It's amazing vehicle. I love cars. Um, and, and so, but, but I'm not going to love them so much that they eat me alive and they, yours are eating you up, man.

Yeah, 90 grand in leases. Yeah, you got $90,000 tied up, and your house had nothing down, and you barely had enough cash to move. And you make a lot of money. So I want you to make a lot of money and have some and not be feeding these beasts. So I'm probably selling the expensive one paying off the inexpensive one getting a a very inexpensive cash car down in orlando and so in

orlando you don't have to even transport them yeah probably too late they're probably already moved but the uh but either way and just be be free of all this is because if you're sitting there with no car payments and you're renting, you can stack some serious cash for your down payment now. And then just draw a line in the sand that says, I pay cash for things from now on. Yeah. And don't be afraid to rent for two years if you guys have to.

No. Because you felt the pain of putting nothing down and not having a lot of equity. So even if you guys kind of slow pace it into that move that's okay too but if you got no payments in the world and you make 200 stack a hundred i mean live i mean oh darn i have to live on a hundred thousand in orlando i don't know if i can do that or not of course you can people do it every day so i mean yeah stack a hundred in a year you know uh and that's a pretty strong downstroke for a house that puts you in a good place or wait two years and stack 200 yeah that'd be pretty neat this is the kind of thing you can

do when you're not giving it all to the car company in the form of a fleece so brett you'd already come to these conclusions but i probably took you uh about four notches along the radical steps uh you know took you a little bit more radical than you wanted to go when you called in be careful what you wish for when you call the show boys and girls but um that's what i would do man just just because here's the thing for a long time i drove cars i really hated because they were crappy and they were hoopties and i drove like no one else so that later I can drive anything I freaking want to you live like no one else so that later you can live and give like no one else and so you pay a price to win you sacrifice to get yourself in a position because making that kind of money dude in five or six years you could be a millionaire if you watch what you're doing yeah absolutely okay

so talk through because we we always say and it's been proven that leasing is the most expensive way to finance a vehicle so talk through the lease aspect of it just from like the the number standpoint of basically renting before you have to buy it out when you finance a vehicle the federal truth and lending laws the regulations require them to hand you a sheet that shows you what your APR is, the interest rate they're ripping you off with. Okay? When you lease a vehicle, you don't own it. So you're not technically borrowing money under the law, so they do not have to disclose

the interest that they are charging you. But there is an interest calculation because you can take the actual cost of the car versus the stream of payments called your lease payments versus the price at the closed-end lease at the back end. These are three or four financial variables. I can put them in my financial calculator and back into what your interest rate is. It's called the capitalization rate because it's not technically interest. But as we've done that in this industry now, we found that the typical car lease in America is being capitalized at 14.2%. So you're borrowing money at subprime rates when you lease a car. But people that lease cars cars and i'm not picking

on brett because he's come to the conclusion that this doesn't work but you know to answer your question this is not aimed at brett this is talking about the subject right brett thank you for calling we appreciate you when you lease a car you're not asking what the interest rate is you're the people that ask how much down and how much a month. What's the least amount per month and the least amount down and I can drive this car? Rich people ask how much. Poor people and broke people ask how much down and how much a month. And that's what drives you into the lease. The lease is the most expensive thing on the car lot.

That's why the car companies push them so hard because they make more money on those than they do on the stinking car that's it it's math this is the ramsey show