The Ramsey Show - App - Community Support Is a Game Changer When You're Working the Plan (Hour 2)

Episode Date: October 21, 2019

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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'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Morgan's with us in Indiana.

Hi, Morgan. Welcome to The Dave Ramsey Show. Hi, Dave. Honored to speak with you today. How are you? Better than I deserve. What's up? Well, my husband and I bought our dream land two years ago, and we have the land loan on a 10-year note.

We did the 30% down. We've got a 10-year note, and we'd like to start saving for the house. We're just about finished with Baby Step 2. We'll knock out Baby Step 3. Our question for you is, do we pay off the land note and then start saving for the build of the house, or can we do both together? Can we keep paying off the land with the 10-year note and then start stocking away money for the construction? Are you planning to pay cash for the house?

No, we'd like to have $100,000 down, and we want to make sure that we keep it under the 15-year note that you recommend. Okay. So it won't matter which pocket you take it out of to get there then. Here's what's going to happen. If the land is not paid off and you're ready to build the house and you've got your numbers lined up, so you've got enough money saved with your house fund plus a mortgage, then your construction loan will pay off the land. Okay.

So what do you owe on the land um we've got 60 left okay we're two years into a 10-year and what what is it worth um we paid over 105 for it but it's a very nice area so chances are we got a really good deal and it could probably go for more okay so it might go for $120,000. Okay. And what would you spend on your house in dollars roughly? We're hoping to keep it under $250,000. Okay. All right.

And so if you saved up $60,000 and didn't pay down the land at all or you paid off the land, either way you can go get the construction loan for the house because they're going to pay off. The construction loan is going to want a first mortgage position on the land. They're going to pay off the land loan if there's anything left out. Okay. So all that's going to matter here is the total.

And so the total is you are $310,000 away from being debt-free home and land right now. Okay. Okay? And however much of that you want to save up, it's very clean to have some cash in the bank, even if there's a little loan left on the land. It won't matter. It's probably a better idea to have the cash, but it doesn't matter. Either one's going to be fine.

Let's say you paid off the land at $60,000. How much of the house would you save up? Our goal is to save $100,000. Plus pay off the land? Yeah. Okay, so $160,000 before you break ground. That's our goal. So that will leave you $160,000 before you break ground. That's our goal. So that will leave you a $150,000 mortgage.

That will leave you a $150,000 mortgage then. Correct. Okay, that's a great plan. All right. So it doesn't matter. When you pay off the land, if you paid off the land first and then you saved $100,000, or if you saved $100,000 while you were paying off the land, you're going to get there at exactly the same moment in time okay what do you suggest we do if we're putting that kind of

money away do you recommend we do something other than just the savings account or just use the savings i mean money market account try to get about one one and a quarter on it right now if you can get something like that that's fine but I wouldn't put it in the stock market and mutual funds because you're going to do this fairly quickly, I think I hear. That's the goal. How long? We're hoping within the next three to four years. Yeah. If you told me eight years, we might try the stock market.

But I didn't think this was eight years the way you're talking about it. So, yeah. So you're going to knock out $160,000 in three years. So you're thinking about about $50,000 a year towards this program. So if I were doing that, I'd probably just go ahead and pay off the land first. Knock the land out. That debt's gone. You don't have to worry about where to park the money.

It's parked there. You got rid of that interest. You're not paying any interest. The land's free and clear. And then the rest of it's just money piled up. And the higher the money piles up, the easier it's going to be to do it. If you did have a $10,000 loan left on the land and you got ready to do this, it would be paid off plus they would loan you the money to start the construction

because the construction lender does not want to be a construction loan from a bank, does not want to be in a second mortgage position. So they're going to take out that land loan to make sure they're in a first mortgage position, and they will require you to have your permanent mortgage already approved so that that can take out the construction loan when you're done. You knock the construction loan out with a permanent mortgage, and the permanent mortgage will give you what's called a takeout letter that says we will take out that construction loan when the house is completed and passes codes and is ready for occupancy and all that kind of stuff. And so really good plan. Very well done.

You've got a game plan, kiddo. Get after it. I love it. Amanda's with us in Ohio. Hi, Amanda. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call.

Sure. What's up? Okay. So my husband, he worked at UPS for over five years, and that qualified him for a pension. It's currently set up where he'll receive $330 a month when he turns 65. However, they are offering him a payout of $8,500, and we just don't know what we should do. How old is he? 24. I would take that money and roll it in a direct transfer to an IRA in good growth stock mutual funds.

Okay. and they can help you do that. Here's why I recommend that, okay? If he dies today, the pension does not survive him, meaning there will be nothing paid, okay? And the $8,500 between now and the time he actually retired at 65 would grow to way more than enough to pay you $330 a month if it's invested in good mutual funds. Okay? Okay. Got it. And so you're going to make more if you die.

You're going to make more if you live by having rolled over a lump sum pension into a direct transfer IRA. Awesome. Thank you. Hey, thank you. I appreciate you listening. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money.

And they are tied together. Money doesn't make your life, but it changes the options you have in your life. And there is such a thing as financial peace. When you get on a plan, you start working these proven principles. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs?

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It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Ashley's with us in Georgia. Hi, Ashley. Welcome to the Dave Ramsey Show. Hi there. Thank you so much for taking my call.

Sure. What's up? We're brand new to the program. My husband and I just read your book. I read it twice. And we just started listening to your podcast and we're itemizing all of our debt. And our mountain of student loans is just super overwhelming. We have one Great Lakes loan, that's $135,000. And it's broken up into 15 different loans. And so I'm wondering if I should itemize each of those loans in our snowball because it won't affect whether, like the minimum payment right now is $128. So that's not going to like increase our snowball

at all. And if we pay off one, it's not going to increase that snowball at all. So I just wanted your advice about how we should attack that debt. Why does it not increase the snowball? Because right now the minimum monthly payment is $128. So we paid off the smallest one, which is about $2,000. When I talked to the person on the phone, they told us, no, the minimum amount would stay the same. It would still be $128. Oh, so even though they break them down, there's only one payment? Correct. Okay. And that's $135,000 worth? Yeah, so it's 15 different loans that are $128 for $135,000. Yeah, we're on an income-based repayment plan right now, and I think that's good for the next year and a half. Yeah. Okay.

How much other debt do you have? Our total is $192,000 with credit cards and my student loans. How much are the other student loans? I have a Navient that's $1,500. A Discover that's $8,000. I'm sorry, the Navient is $15,000. The Discover is $8,500, I discover that's $8,000. I'm sorry, the Navient is $15,000, I discover it's $8,000, and FirstMark is $6,000. So about $30,000 there. That's $165 of your $192, right?

Mm-hmm. How much is credit card debt? We have $1,000, $2,000, $3,000, and $8,000. Okay. All right. And then how much do you owe on your car? We owe $11,500. Okay okay and what's your household income right now uh sixty five thousand my husband is a doctor so he is uh not like a medical doctor a regular philosophy doctor so not wasn't a smart decision so we're working on getting another higher paying job getting a bigger shovel that's our our goal. So he has a PhD in philosophy. Not in philosophy. It's political science. Oh, in political science.

Okay. I'm sorry, I misunderstood. And your degree is in what? English. And that was the 135? No, my degree is in 35. Oh, his was the 135. Correct. So that includes his undergrad and master's PhD.

Okay. And so what do you earn? Of that amount, I earn about $25,000. So are you working full-time? I'm working part-time. I'm working on getting another part-time job. We're in the beginning stages, so we're both going to be getting part-time jobs to help make our bigger shovel. Yeah, so what are your career paths?

What are you going to do? My husband wants to, he wanted to teach at a college level. Yeah, that's perfect. And it just takes a little while for those jobs. He just graduated not too long ago, about a year out. And the average time to gain employment after that is about three years of applying. So he has a little bit more time, but it needs to be sooner rather than later. And if that doesn't pan out, then he'll be looking at

more government positions, city planning positions, that kind of thing. What about you? Well, we have two young kids right now, so I am teaching English online. But my kids will go to school in about two years, and then I don't know. I'll figure out a path, I think. Okay. Because I'm just looking. Yeah, you keep talking about the size of your shovel, so you've been listening to me. Because your ratio of shovel is 60,000 income to 192 in debt is a problem.

Right. We're living right now on 30,000, and I'm hoping to keep it that way. We're definitely a rice and beans family. Yeah, but I know. With you being home with small kids, you are a full-time home economist, so you can keep the cost of living down to nothing doing that. Yeah. But there's only so much you can lower costs, and, you know, just the ratio of, you know,

$30,000 into $200,000 is a seven-year plan. I don't want to do that one. Yeah, me either. So I want to do a three-year plan, and so I need an extra $60,000 a year from somewhere, which he'll get if he gets a Ph.D. position at a college. Mm-hmm. I mean, that'll pop him up into six figures probably, depending on where he's teaching. year from somewhere, which he'll get if he gets a PhD position at a college. I mean, that'll pop him up into six figures probably, depending on where he's teaching. It's just so competitive, and it's been really, really difficult applying for those jobs.

Yeah, there's not that many of them, and there's a lot of people who have this idea that that's their career track. Right. Yeah. So everybody's going to be working on everything they can get their hands on, which is what you're doing on the short term until we can get some long-term income really coming in. And that's what you guys are facing here. So with all of that in mind, you're not changing this income. The reason I'm asking all this question, I'm trying to find out about the income-based repayment on the 135 at $128.

You're not going to get to that for a long time. I would lump that 135 as one big debt at the end of your debt snowball okay that's what we have now okay and so you thought through that properly i was just trying to make sure i had the facts before i said normally i would not do that but it's going to be a while before you get to that puppy and your income your income is still going to be calculated on lower income during the time we're knocking out these smaller ones so it would be very very cool if we were down to 135 uh you you would be there at your current track in two years yeah that's what that's our our thought is that you'd be down to that and then by then hopefully your incomes are ramping up

and we knock the 135135 out real fast. I hope you ramp them up faster than that, but that's your worst-case scenario is you're going to get there, and you'll be debt-free except that. So the good news is you've stopped the bleeding. You turn the ship around. We're heading back to port. We're going to get there. We're going to get back where we're safe again and get this debt cleaned up.

But, yeah, I think I'm going to treat the $135. Since it's income-based repayment, it's only 128. It doesn't move the needle on that as one lump sum until we get there. Now, once we do get to it, then we'll knock it off smallest to largest in the 15 loans that comprise the 135. Because the smallest to largest will give you the sense of traction, the sense that you're getting somewhere, and that's what you want from that, is the psychological feedback of going, woo-hoo, one down, woo-hoo, another one down.

You need those woo-hoo moments in the midst of a trek like your own. So you sound very determined, very dialed in. You're very up on your numbers. There's a lot of good signs in this conversation in that you're going the right way. So be encouraged. You will get there. And if you get scared or get going the right way. So be encouraged. You will get there. And if you get scared or get tired along the way, you call me. We'll talk it through together.

Open phones at 888-825-5225. Well, the opposite of $165,000 of student loan debt is no student loan debt. That's the opposite and you one of the ways you do that is you apply for and get tons of scholarships if you go to davramsey.com scholarships today we are giving away three scholarships totaling ten thousand dollars for college given a five and two twenty five hundreds five thousand and two 2,500s, a 5,000 and two 2,500s. And so we want you guys to go get some of that money. This is sponsored by Speedy Prep.

It's at anthonyoneal.com or daveramsey.com slash scholarships. And anthonyoneal.com is a scholarship search tool that is completely free. There's 10,000 scholarships in this database. And here's the thing. A bazillion dollars of scholarships go completely unclaimed every year. People don't know they exist or don't bother to apply for them. So I want your high school seniors' full-time job this year is not to become master of the video games, but instead become master of the essay that they send to a thousand scholarship applications.

And they get turned down for 970 of them, but they get $30,000 for the other 30. That's pretty good use of Junior's time. AnthonyO'Neill.com, the scholarship search tool is free. This is the Dave Ramsey Solutions on the debt-free stage, Justin and Kristen are with us. Hey, guys, how are you? Hi, Dave. Welcome, welcome. Where do you guys live? Columbus, Ohio. Oh fun. Welcome to Nashville.

Thank you. And you brought the young adults with you? We did. Their names and ages? Bradley is 17 and Katie is 15. Awesome. Very cool. Good for you guys. So all the way from Columbus with the whole family to do a Dead-free scream.

That's right. Love it. How much have you paid off? $165,000. All right. How long did this take? Three years and nine months. Perfect.

And your range of income during that time? $118,000 to $132,000. Perfect. What do you guys do for a living? I'm an office manager for a state agency. And I'm a special education teacher. Great. Very cool.

What kind of debt was the $165,000? Dave, it was our house. You paid off your house? Paid off the house. Look at the weird people. Very. Very happy to be weird. Very cool.

In three years and nine months, you knocked it out. Yes, sir. That's a record. That's very fast. Well done. Well nine months, you knocked it out. Yes, sir. That's a record. That's very fast. Well done. Well done. So tell me the story. What made you decide to pay off your house?

Well, it goes back a little bit before that. We've actually been following you and the show and your principals for about the last 12 years. And back at that time, these guys were just starting school. And we had about $27,000 in debt at that time, a little bit of student loan debt, a little bit of credit card debt, but most of that was our two vehicles. We paid that off in about 18 months and just continued budgeting and following you and following your principles and what you talk about of living on a budget. We got to the point where we had to think about these guys going to college,

and we said we wanted to pay off the house before that happened. So this guy's about to graduate in May, and we did it about a year in advance. So now you have no payments of any kind. None. And that allows you to cash flow college, right? Absolutely. All right. I love it.

Good goal. So you kind of started looking forward into the future, say, five years out, about four years ago. Yes. And said, or really not even four years ago, but said, okay, we've got to go ahead and knock this house out and get it out of the way so we can cover these colleges. Yes. Perfect. That's like planning and everything.

Wow. Yes, sir. I love planning. This is where wealth comes from. Wow. Absolutely. Well done. But between four years ago, three years and nine months, and 12 years when you started,

you probably paid off the debt. You said 18 months. Yes. So there was about a six-year period of time where you were just kind of running the budget. We did. You're doing four, five, and six together? Yes. Okay.

And we didn't want to completely sacrifice things like vacations and Yeah. Well, you weren't supposed to do that. And other kind of stuff during that time as these guys were growing up. Right. We still wanted them to enjoy being a kid. Once you were debt-free, everything but the house, then you do let your foot off the gas a little. You do the vacations. So you did this perfectly. Yes. And so you kind of ran a normal baby step six procedure up until about three years and nine months ago.

And you said, hey, we need to knock this out for college. Turned up to eat again. Yes. Okay. Cool. I like the story. Well ago. And you said, hey, we need to knock this out for college. Turned up to eat again. Yes. Okay. Cool. I like the story. Well done. Thank you.

Very well done. So what's the house worth? Last I checked. About 210 right now. About 210. Growing up every day. How long have you guys been married? It'll be 20 years next week.

Have you ever been 100% debt free? No. Not 100%. This is it. I love it. i love it this is no house no nothing it's an incredible that is your backyard man i love it it feels different doesn't it it does it does it's one thing when you get all the other debts paid but when this one goes and there's nothing it's like a switch flips deep down in your spirit and i look at the budget each month and it's just amazing the amount of cash we have left over.

Absolutely. You don't have any payments. No. Yeah. Yeah. Very cool. Very cool. And then when we look at the plan and the baby steps and following that, we look back and think, why didn't we do this earlier?

Why didn't we start earlier? And now that we've done it done it we thought we did it right exactly as we should you did you from the time you started 12 years ago you've executed it exactly the way we prescribe it and you're right on track for the everyday millionaire because the house has paid off on average in about 10.2 years from the time they start and that's about what you did yes so it So it's excellent. Excellent job. I love it. So what is the key to paying off everything, including your house? What do you attribute this to?

First is read the book. That's the first thing, and that's what we started with. The Total Money Makeover. The Total Money Makeover, the book. That's the primary thing. And number two is budgeting. Budgeting is everything. Once you get the budget down, and it takes a little while.

Oh, yeah. But once you get it down, it's routine. Well, it's 12 years now. I mean, it's the rhythm of your life now. It absolutely is. It's a routine. Sharon and I wouldn't know how to act if we didn't keep our calendar dialed in and our budget dialed in. Those are the two things we manage our life with.

We spend more time on the calendar than we do on the budget these days. She'll say, we need to sit down and do calendars, which means where are you going to be traveling this month? So fun, guys. Well done. Very, very well done. Who are your biggest cheerleaders? We had family, friends, co-workers. A lot of people actually got on board and said, wow, this is fantastic. This is great. And part of that was us able to relate to them and say, hey, this is not just us. You can do this. You can do this as well. And we've given out dozens of total money makeovers to people.

Thank you. And that's our thing. We love to do that. And the people who do read it come back and say, how'd you do this? Is this guy for real? And we say, oh, yeah, he's for real. Trust me. We're walking billboards.

And once they start the program and really start to look at the baby steps and say, wow, this is not that hard. We just have to learn to be weird. Amen. And that's the goal. So where's Bradley going to go to school? Ohio University. Perfect. Okay.

Does he know what he's going to study? He does. What? Business. Awesome. Very cool, Bradley. Good choice. Good choice.

And I would imagine the way you guys think, Katie's already thinking about it. Oh, she's there. Is Stanford the place or is that just a sweatshirt? She said that's her goal. She just wants to get accepted there. She may not necessarily want to go to school there. Is Stanford the place, or is that just a sweatshirt? She said that's her goal. She just wants to get accepted there. She may not necessarily want to go to school there. Ah, okay. But it's definitely having those college goals is in her mind at this point.

Well, if she's got the GPA, they may pay for it for her. That's awesome. That's a great way to go. Way to go, you guys. Dave, I also wanted to say, when you were asking cheerleaders, I got started as a member of your YouTube Crazies group and on the YouTube channel. And we have a small chat group we do to the side as well. So they're big cheerleaders. I know they're watching or listening today. And Patrick Kienes is actually one of, has become a friend of mine. And we, he's one of has become a friend of mine and we he's one of the biggest cheerleaders for anybody on

the plan but um as part of that group as well and uh so just having that community support it's a big deal it's a huge deal it matters a lot the youtube community is real tight we've got about 250 000 on the facebook now the ramsey baby steps facebook group these community means a lot to have people around you that are thinking the same way because what you did is truly weird. I mean, out there in the culture, it's strange. We still, you know, there are people who kind of look at us and, like you said, they think they can't do it because their situation is different.

But it is definitely still a weird, unexpected thing. I've had people tell me me nobody pays off their mortgage. Well, you can't say that anymore. Exactly. Nope. Everyone. No, you can't say that anymore. Every time you have to.

I like being the person that ruins their statement on that. Exactly. Well done, you guys. Very well done. All right. It's just, we got a copy of Chris Hogan's book for you, Everyday Millionaires. That is definitely the next chapter in your book. You'll be there soon.

If you're not already there, they're now with your 401 cases stuff. Good job. Justin, Kristen, Bradley, and Katie, Columbus, Ohio, $165,000 paid off in three years and nine months, making $118,000 to $132,000. Count it down. Let's hear a debt-free scream. Ready, guys? Three, two, Let's hear a debt-free scream. Ready, guys? Three, two, one.

We're debt-free! We're debt-free! Woo-hoo! House and everything, baby! House and everything! You know what happens if you invest a house payment for 10 years in a good mutual fund? You got another million dollars. That's all!

Instead of giving it to country freaking wide, why would you do that? Why would you give all your money to banks? Why would you give all your money to car? Why would you give all your money to car companies? You work so hard for it. Very well done, you guys. Absolutely stellar. That's how it's done. House and everything.

Touchdown, baby. This is the Dave Ramsey Show. show. Charlene's with us in Florida. Hey, Charlene, welcome to The Dave Ramsey Show. Hello, Mr. Ramsey. It's an honor to seek your advice. An honor to have you on the show. How can we help? I am an Illinois retired teacher of 20 years, and I'm living in Florida and here to stay.

Cool. I'm not yet collecting my TRS pension because of my age. I will be doing that in four and a half years. What I have recently received was a letter from the TRS, and it was offering me an accelerated pension benefit program and I wanted to get your advice. The two options would be should I hold off the four and a half years and wait and get a pension of approximately two thousand dollars a month for the remainder of my life or should I take them up on their, which is a one lump sum that I would receive now of approximately $190,000, which is about 60% of the value, minus 20% federal tax and do something such as rolling it over to like an IRA?

There is no federal tax if you roll it to an IRA. Oh, excellent. And the 20% does not apply. Is the 190 after the 20% withholding or before? The 190 is before. Before 20% is withheld. Okay, 20% will not be withheld if you do a direct transfer rollover into an IRA. Okay, now, so the way this should be calculated, if the pension has done it properly, is $190,000 growing at a 7% rate will equal enough to produce at 7% $24,000 a year for you

after five more years. Okay? Okay. And that's probably about right actually okay uh so 10 would be 20 000 today um on that and um and it hasn't grown yet four more years so without putting it all on the calculator the numbers look like they're about right okay so let's pretend you did this. Let's pretend you took the rollover, direct transfer, no taxes, into good mutual funds, into an IRA. How old are you? I am 55 and a half. And you let it sit four more years, or five more years, rather. Okay, just the same amount of time. Okay.

And it grows at mutual funds rates rather than at pension fund rates. You following me? I do. And then it pays you, without touching the principal, only what it produces. It will be larger, and it will produce more than $2,000 a month, unless we have an unusually bad five years in mutual funds. Okay. They would have to do about half of what they've been doing for you to not come out ahead monthly if you never touched the principal.

You follow me? I do. So, in other words, if you put it in good mutual funds and they made 10% to 12% for the next five years and then they paid you 10% to 12% off of that amount per year, that would be more than $2,000 a month. That's what I'm describing because the current calculation is based on 7%. By the way, it's not that mutual funds or pension funds are evil. They're highly regulated and they're not allowed to pay out much more than that. It's probably either 6.5% or 7% is what it's calculated on by federal regulation.

That's just what it has to be. And so you make more while you're alive. Plus, if you die, not if you die, when you die. We're all going to die. When you die, this $200,000 or $250,000 nest egg dies with you if it's in a pension. Exactly. If it's in a mutual fund, it goes to your heirs, whoever you name. Yes.

And so you make more while you're alive and more when you're dead if you take their offer, if you're willing to invest it in good mutual funds. Okay, and I am. This is wonderful. This is exactly what I wanted to hear from you. Okay. Are you already doing some mutual fund investing? Are you familiar with that?

Yes, I am. Okay. Yes, we've listened to you for years. We've followed you religiously, and we are very comfortable. Okay. And this is just an added plus. Okay, perfect. Then actually you knew all this stuff already, and I just covered it for someone else that was listening then. Perfect. do religiously and we are very comfortable and this is just an added plus okay perfect then

actually you knew all this stuff already and i just covered it for someone else that was listening then perfect all right so um yeah definitely do this get with your smart investor pro or whoever you're doing your investments with and set up a direct transfer rollover into the mutual funds and if you follow the exact same pattern which you would need to follow because you can't touch the IRA either until 59 1⁄2, so you're going to be in great, great shape. So very well done. Good job. Good job.

Enjoy the retirement in Florida. All right. Jessica is with us in Kansas. Hi, Jessica. How are you? Hello, Dave. I'm well. How are you? Better than Dave. I'm well. How are you?

Better than I deserve. What's up? Yeah, my husband and I are getting ready to make a large job change, probably at the beginning of the year sometime. With that, though, will come a couple financial situations we're trying to figure out ahead of time. With the job change, we'll be about a 50% pay cut. We are actually going to be entering into the ministry, which is why. Yes. So we are budgeting it out. Now we are debt free. We do have six months at least saved and put away at the moment. We do also have some money saved back. But with that, also in his

current job, he gets a vehicle provided for him. So we will be needing to purchase a vehicle when he quits the job and changes. Our current vehicle that we do own is also within the next few years probably going to need to be replaced. So we're just looking. We don't know if there is a better option at the point where we can probably fix the one half a dozen of the other to decide what to do. We're just curious if we should buy a personal family vehicle. We do have a larger family. A family vehicle now and then buy just him a smaller car or go ahead and let our car die off and try and save some money

and then buy the car, family vehicle when it comes. How much is in your emergency fund? $36,000. And how much is in the other fund you mentioned? Our checking account has about $10,000 in it. We are, Lord lord willing looking to get um his annual bonus at the end of the year which last year if it holds out to be the same which it probably should um take home was roughly about twenty five thousand dollars amazing wonderful

okay yeah and you would use that to buy you use that to buy a couple of cars yes sir why wouldn't you go ahead and just do that at the end of the year and buy a couple cars okay well that's what we were like we just didn't know if there was six away do we trade off the one we have now or try and sell it and before it dies or just get it i mean at the end of the year i mean in the years here right you're not you're not talking about and do it now or do it in two years you're not talking about between now and the end of the year's here right you're not you're not talking about and do it now or do it in two years you're not talking about between now and the end of the year right correct yes yeah as soon as you get the bonus in go buy two cars and get rid of the old one okay out of the bonus and pay cash now yes you have set your budget up and you've run out mock budgets to live on without touching savings his new income when he takes the pay cut correct yes we as soon as he knew we were going to possibly be going this direction

we have cut back budget um as much as we can no that wasn't what i asked i asked if you can live on it without touching savings um yes i am going to be taking a part-time job and in august our youngest child will be going to school so then i can then hopefully find another job that will bring in more but yes we are whatever whatever your income is his and or yours combined you have to live on it yes sir The ministry is not supposed to be a nightmare. No. Yes. We are nervous, and with that, we are cutting back all of our spending now

and making sure that we will be able to live on it then. Yeah, don't set up a thing where we're going to subsidize our budget shortfalls with savings. No, sir, that scares me to death. Yeah, because you'll burn through it, and then this dream's over. It becomes a nightmare. Yes, sir. So set it up to where if you've got your house on it,

it sounds like you've done a great job preparing for this. It sounds like the Lord has prepared you all to call you into ministry. That's awesome. Yes, sir. I'm proud for you. This is a great, great move for you. You're getting to live your dream. It's a whole other definition of live like no one else so that later you can live and give like no one else.

And all because you're free. Because you're not slave to someone else. Proud of you. Very well done. This is The Dave Ramsey Show. Hey, it's Blake Thompson, senior executive producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.