The Ramsey Show - App - Confronting the Lies that Steal Your Hope and Dreams (Hour 1)

Episode Date: January 11, 2019

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage is going to help you become an everyday millionaire. That's right, folks. We are excited. It is book tour week, baby. That's right. Chris Hogan is out there, man, all over the United States of America, seeing you guys and signing books for you.

We're doing events everywhere. Exciting first week, Chris. It really is, Dave. I'm so excited for it to be here and to be out on the road meeting people, telling them about this message. And so I can't wait. Just continuing to meet people, shake hands, look people in the eye and encourage them that they too can become an everyday millionaire. Somebody just tuned in right now for the very first time. They've never heard of Chris Hogan or Dave Ramsey or Everyday Millionaires. What's this book?

Oh, well, this book is going to show you that the American dream is still alive and well. We did the largest study that's ever been done on millionaires from all across the country. We talked to over 10,000 of them to find out the truth. And we've got statistics. We've got stories. We found out what millionaires are doing and how they got there. And we're going to show you exactly what you can do so you can get there too you know one of the things that drove our company

to do that piece of research along with you um as a ramsey personality was the uh our knowledge that if you do these things you can become a millionaire but also we were kind of a little bit pissed off about the mythology that's going around that steals people's hope that the only way you can be wealthy is to inherit it. Oh, Dave, we found out that's not true. It is absolutely not true. Ten thousand millionaires told us that they did not inherit their money. That's right. What's the percentage?

You've got 90. You've got 21 percent of them inherited something, okay? Anything. And then only 16% of them inherited $100,000 or more. None of them inherited an amount to make them become a millionaire. 93% were not inherited millionaires. Were not inherited. So that means they didn't get anything handed to them.

Now, what does this mean? What this means is that a lot of you out there, maybe you weren't giving anything and you thought, man, that's the only way I'm going to be able to get there. Well, it's not true. These millionaires work their way and built their wealth on their own. So what that means, Dave, is that everyday people, this is possible. It's not a it's not an impossible mission. It's possible.

But it's going to take you doing the right things at the right time. But, you know, it's not only a message of hope. It's a message of confrontation against lies that are being spread that cause your hope to not be real. Yeah. And this isn't false bootstrapping and, oh, you're just the American dream. You don't understand about my obstacles. Everybody's got obstacles, baby. But what we found is these people start from dirt poor.

They start from the projects. They start from every race, creed, color, national origin, every segment of society and have turned into millionaires. We found them from everywhere. Yeah. And we found the correlations. And there was no correlation to an Ivy League school. No, no.

And that was another one. People thought that, hey, you've got to go to a private school Ivy League school. No, no. And that was another one. People thought that, hey, you've got to go to a private school or fancy school. And listen, we have a family of privilege. Yeah, not at all. We talked to people. A majority of them had public education. They went to a public university. And so what this means is, is that regardless of where you are, you have an opportunity to make some decisions to be able to grow forward, to be able to become an everyday millionaire. And a lot of these millionaires are first generation. That means they did this on their own.

But Dave, they were consistent over time. I haven't attended an Ivy League school. As far as I got was two years into the community college. I owe a lot to my folks. They instilled in me, save, save, save, don't owe money to anybody. But I think the biggest part is having a plan and sticking to the plan and budgeting and smart investing. That's what Rich said. And he's one of the everyday millionaires that we interviewed. And that was very typical of the responses that we got. So you had a great book signing earlier

today at the Barnes & Noble in Dallas, Texas. Now, this coming Monday, January the 14th, you will be in Houston. Yes. Yeah, I'm doing the Texas run, Dave, and I'm going to be at the Books a Million at 6 o'clock right there on Katie Mills Circle, 5000 Katie Mills Circle. And guess what, Dave? Not only am I going to be there to sign books, I'm giving away some money. Yahoo! Yes. Get you started on your everyday millionaire run.

That's exactly right. So we're going to give away $1,000, and that's brought to you by SmartVestor. But you've got to be there. You've got to be present in order to win, right? And we're going to have fun. And no purchase necessary. You just have to be on site. Yes, you do. You do not have to buy a book.

I would hope that you would, but I'd like to shake your hand and be able to meet you and be able to talk with you about this message and this journey. So it's a great opportunity to come out, have some fun, a chance to win, and just see other people that are thinking and moving in the direction of becoming everyday millionaires. So the book tour continues, of course, been in New York and Chicago and Nashville, signed in Dallas earlier today. Coming up Monday is Houston, Texas, six o'clock, Books a Million. On Tuesday, over to Austin, Texas, the Barnes & Noble there at 6 o'clock at the Arbor Edom. Each one of these have the $1,000 drawing brought to you by SmartVestor. Each one of these are no purchase necessary.

You must be on site to do that. And you've got to be 18 years old or older to win that because of the lottery laws and all that junk, right? So come on out. And then on Wednesday, January the 16th, so that's Monday, Houston, Tuesday, Austin. Wednesday is San Antonio, Barnes & Noble. At 6 o'clock again, the shops at La Quintera. We've done that book signing at stores there many times. That's a wonderful store.

Again, $1,000 cash prize there. And then it continues on from there. Thursday, Friday is Colorado Springs. Friday is Phoenix. The next Monday is Los Angeles. And so, man, you're just going, man. I am running, Dave. And listen, I'm coming through Texas, so I'm going to be bringing my cowboy boots,

but I'm also going to have my running shoes because we've got things to do and places to go. But seriously, come out. I want to see you. I want to see you. I want to meet you and be able to talk with you. And I think we can bond together and band together to help people realize this is possible. The American dream is alive and it's available. All you have to do is decide. Yeah.

And one of the things we found was they pay off their house. Oh, Dave, they really do. About 10.2 years. is that what the average was? That's exactly right. That's the average. And so you think about that. Not only you have the house paid off, and now you redirect that mortgage payment. That makes you easily wealthy.

It puts you in that direction. And so, again, this is the stuff, Dave, you've talked about for years in Financial Peace University. Well, I always get the response, though, Dave, I'd pay off my house, too, if I was a millionaire. No, dummy, you got it backwards. You have to pay off the house so you become a millionaire because you don't have a house payment anymore. You can pour that into investments, and ding, ding, you turn into money, right? That's right.

This is not rocket science, people. It really isn't. And if you're behind or you're feeling behind, think about that. You pay off the house and you redirect that $1,500 or $2,000 mortgage payment. Now going into your 401K or your IRAs, you're building money. You're building interest. And that's one of the other things they all did. They all did their retirement plans.

They did. They loaded up the 401K. They loaded up the Roth IRAs. And they kept the government's hands off the money. And they systematically, steadily, systematically, steadily, systematically, steadily, the tortoise, not the hare, and their everyday millionaires. They started with nothing, did not inherit their money. How ordinary people built extraordinary wealth and how you can, too.

Not a bootstrap message, not a positive thinking message. Researched facts. Yes. That you can align yourself with those facts and change your whole future. It works. You surely can, and it really is. And this is where, I mean, Dave, this research project was so big that we used an outside firm to help us with it.

Over 10,000 millionaires from all across the country. So I'm excited for people to read the information, see the stats, but hear these stories. These stories are motivating, my friends. And they tell people the reality of what's available to them. The book is Everyday Millionaires. Monday is Houston, Texas. Books a Million. Tuesday's Austin, Texas. Books a Million. Tuesday is Austin, Texas.

Barnes & Noble. Thursday, or Wednesday, rather, is Barnes & Noble at San Antonio. Chris Hogan, best-selling author yet again, baby. Yeah, we'll be announcing that soon. I love it. Everyday Millionaires. This is The Dave Ramsey Show. There's nothing smart about smartphones if your wireless plan is blowing your budget each month.

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We're doing good. Thanks for taking our call. Sure. How can I help? My husband, Edward, and I are new to the Dave Ramsey world, and we are loving it. Last month, we put together our very first budget in preparing to attack $195,000 of non-mortgage consumer debt. Ouch. Ouch.

And by the end of the first month, we completed Baby Step 1, and we're working on baby step two. At the end of that first month, we, you know, hit, put $2,000 towards the debt, bringing it to 193. And we've adjusted our W-4s. I recently canceled, we recently canceled my whole life insurance and are currently holding on to $27,000 until I finalize my term life with Zander. Okay. We're also in receipt of $27,000 until I finalize my term life with Sander. We're also in receipt of $20,000 in the next two months or so due to a medical settlement. So we're currently working on getting out of my car lease. My question, Dave, is should we drop the 47 on, or also get rid of my husband's vehicle and use some of the $47,000 to purchase two used vehicles and then put remaining on debt. My husband's thinking that we keep the $25,000 car in the snowball and keep the vehicle until the doors fall off.

What's your household income? Household annual income is $151,356. Okay. Well, the rule of thumb that I use is pretty simple. Usually, yeah, usually, over half the time that I talk to someone in one of these conversations, the car is a blocker, meaning mathematically you're choking on them, and it moves the needle dramatically to dump some cars if you drive like no one else later you can drive like no one else i mean all you

gotta do is visualize and say my goodness if we had no payments but a house payment how fast could we save up and buy some decent cars really fast so we're not talking about driving hoopties or whatever for very long either way whatever decision you make but even if you don't make the decision or if you do make the decision the rule of thumb i use is two things number one you don't want the total of all your vehicles anything with a motor totaled up shouldn't be more than half your annual income you have not violated that especially when you get rid of the lease car you're not violated that okay because if you do you got i mean if you had eighty thousand ninety thousand dollars for the cars making 150 you got too much stuff going the wrong way it's going down in value

that's the point of that okay so the second rule is can i be debt-free everything but my house in about two years if not the is the car the blocker and so i mean if you had a two thousand dollar debt on the car or a two thousand dollar you know, the car is not your blocker then. So can you pay this off and keep the $25,000 car as you run your calculations within two years? I doubt it. Okay. Because that's $100,000 a year, and you make $150,000 to be debt-free in two years. I mean, it's going to be three years.

That's what we were figuring. Yeah, and so the car does, you know, the, what is it, $500, $600 a month on this thing does move the needle. That's $7,000, $8,000 a year towards this goal. And, again, the thing you've got to keep in your head is it's not for that long. It's like two, three years. You're going to be buying another car that you're going to pay cash for, probably as nice as this one. And you just pay cash for it after you get your emergency fund in place.

And what I, well, you know what? I forgot about the $47,000. You can. You can. You can use some of that to buy two cars. Well, I'm not going to buy $47,000. You can. You can. You can use some of that to buy two cars. Well, I'm not going to buy $47,000 worth of cars. I'd buy $25,000. No, no, no.

How far are you upside down on the $25,000? No. Okay. So let's just say if you threw the $47,000 straight at the debt, can you make it in two years? That's what I meant. I forgot it. Because instead of $195, 195, now I've got 150. That's 75 a year out of 150.

That's laying it down hard. I mean, you've got no life doing that. But that is what we tell people to do is, you know, go crazy. Beans and rice, rice and beans, no life. I think you keep it if you throw the 47 at it and you commit to no life. Scorched earth on the lifestyle. Yes, but taking a little bit out of that, Dave, to buy my hoopty. Yeah, you've got to buy a $5,000 car.

Okay. And when he gets the hoopty, hey, federal law is wife gets the good car. He gets the hoopty. I really like that, Sam. I think I'm ending up with the loopy for some reason. So, again, it's just temporary because you guys make really good money. You've just made really bad decisions, and now you've got a big hole you're in, but you've got a good shovel, and you're committed. You're on the call together, which says we're on the page together.

We're both leaning into this. You know, it's a real good prognosis. You've got all the symptoms of winning. Okay. We feel like we're winning already just because we got to talk to you. Yeah. Hey, there's no magic there, darling. But I would throw the 47 at it and lean into the lifestyle in order to keep the car

because I think you can make it right at two years. But that's going to, 75 a year is what you've got to do out of 150. And that means after taxes, you really are not going to have any room. There's nothing. I mean, nothing. I mean, people are going to be making fun of you because you're going to be living on the cheap. But that's cool.

Hey, thanks for calling in. That's a fun discussion. Guys, sometimes you all ought to do that, the rest of you. Some of you that call in, you ought to get your spouse on the phone with you because, you know, I can get my referee's whistle out and blow the whistle and say he's out of bounds, right? And that would just solve it. You don't have to go home and translate. I can just talk to him right here.

So that was an interesting way of looking at it, though. But all we're doing here is crunching numbers saying how can we win and a good rule of thumb like with the tina edward conversation there the way you think about these things is guys what's gonna what decision is going to put me in the best place 10 years from now because good financial decisions always hurt on the short term and give you the proper result in the long term bad financial decisions always feel good in the short term like when you buy that car you can't afford or go on that vacation you can't afford or do that whatever you can't afford it always feels good because it's an exciting moment to get a whatever right

they always feel good on the short term, but the long term is disastrous. And so one of the things we found as we've surveyed wealthy people is we have found that they have a long-term planning window. They don't say, thank God it's Friday or God it's Monday. They don't live for the weekend. You know, however that song goes, I can't sing, but obviously. But I mean, so, I mean, you don't live for the weekend. You know, however that song goes, I can't sing, but obviously. But I mean, so, I mean, you don't live for the weekend. If you do, you're a child. That's something people do in high school. You know, so are you still Uncle Rico? I mean, really, are you still living like you're in high school?

You know, no, you can't. You start thinking, okay, when I make this decision, how does it affect me 10 years from now? You know, no, you can't. You start thinking, okay, when I make this decision, how does it affect me 10 years from now? Feels good right now, but how does it affect me 10 years from now? And so, like, I had a friend the other day. He did a deal, and he got a really big check. His check was over a million dollars. Wow.

Nice deal, huh? And he was fretting over buying himself a watch. He's a watch guy. And he bought a watch for $17,000. Now, that's a dadgum watch. But he's fretting about that. He said, dude, you think I was okay? You think I was okay? I was okay to buy a $17,000 watch. I said, dude, you think I was okay? You think I was okay? I was okay to buy a $17,000 watch. I said, dude, you just cashed a check for over a million dollars. You could buy six of those watches and drop them off the bridge, one

at a time over the next six minutes into the water, and it would not affect your life. That's how you know it's an okay decision. You know, how can I afford that motorcycle? If you could, you know, drive it off a bridge. And it wouldn't affect your life.

If you just threw it away, just blew it up, just for the fun of it, would it affect your life? Then it's a non-issue when it's a small percentage of your world. And that's where you want to get to with cars and toys and vacations. Where when you do them, even with your generosity, where when you do it, it doesn't affect your life. Yeah, that's good stuff. This is the Dave Ramsey Show. You know what I've learned after talking to so many people who have been victims of ID theft? They feel violated and they have a sense of fear and intrusion. It can be overwhelming.

It's scary and infuriating at the same time. People question your character. You try to figure out how it happened and you worry it's going to happen again. Then you have to deal with cleaning up the mess. Bill collectors, credit bureaus, even the police just make the nightmare worse. And trust me, ID theft is not going away. That's why I personally worked with Zander Insurance to develop an ID theft plan that provides the best protection and value. Smart strategies to help reduce your risk so you don't feel so helpless, along with taking over all the work if you do become a victim.

And without wasting your money on gimmicks or things you can easily do for yourself. Go to Zander.com or call 800-356-4282. Do not wait until it's too late and you have to go through this nightmare on your own. Go to Zander.com. In the lobby of Ramsey Solutions, Jason and Debbie are with us. Hey, guys, how are you? Hi, Dave, how are you? Hey, we're blessed.

Welcome, welcome. Where do you guys live? We're from Vancouver, Washington. Well, that's a bit of a trek to Nashville. Yes, it is. And all the way across the continent to do a debt-free scream. Welcome. Thank you.

Well, thank you. We wanted to not only do a debt-free scream, but look you in the eye and say thank you for your influence on us. Bless your heart. Thank you, guys. How much have you paid off? $69,600 and some change. Way to go.

And how long did that take? Well, we've been married 28 years, been in debt most of that, so I'd say 20 years doing it our way, 21 months doing it your way. Okay. And what's your range of income during that 21 months? Started about $120,000 and we got it up north of $170,000. Wow. What do you guys do for a living? So I'll start with this. Dave, I'm a public high school secretary, and I took a second job, and I work a retail job at a craft store. Okay, cool. And my career job I work is a regional supervisor for a major sporting goods company.

And we've done some things, you know, trying to make money. I've got some gigs doing being an extra in both a movie and commercials. Neat. We worked security at concerts to earn money. And the last 10 months or so, I've been driving for Lyft and Uber to make a few extra bucks. Cool. We did anything and everything we needed to do to make some money. And you got your income up $50,000.

Yes, we did. During that time. Were there any raises at the main jobs? Oh, yeah. We both got raises along the way. Okay. Yes. But more than anything, just hustle and grind.

That's right. Yes, sir. Blood, sweat, and tears. What was the best paying part-time job? Oh, goodness. You know, my craft store job is consistent money for me. And so for me, I would have to say that in Washington, minimum wage is about $11. So that job for me, knowing its consistency about 25 hours a week, that was the best paying job for me.

Okay. And the second one for me was probably driving Lyft on New Year's Eve. Oh, yeah. That'll get you. Okay. All right. Very cool. Very cool. A lot of drivers I'm riding with these days have both.

I'm catching a number of them doing both. And I was asking, I was in Miami the other day, and I was asking the driver which one was paying better, and she said Uber 3 to 1 in her case. I said not because the rate was higher, but she was getting more rides. And so very interesting.

That is true. Very cool. Interesting, interesting. Well, well done, you guys. Thank you. Thank you. Very well done. What started this journey 21 months ago?

Because you guys have been game on. Well, I think reality hit me upside the head with a baseball bat. You know, we've, I hate to admit it, but we've known about you for, gosh, probably two decades. But we were teaching a small group marriage class. In fact, in our spare time, which we have so much of, we've also been doing a lot of marriage counseling. And we've written a book on marriage. Oh, good. So we were teaching a small group using our own material that we had written.

And we were talking about finances. And in that book, we had written at the time, came out in 2010, that we were not debt-free, but we were working towards that, and we were committed to being debt-free. Well, a couple years ago, we're re-reviewing that and getting ready to teach our small group, and I'm like, dude, you're doing it, but you're not really doing it.

You know, it's like we were kind of dangling our foot in the pool, but not jumping all in. And so, you know, in our marriage counseling, we teach that love is a choice, and so is getting out of debt. We had to make a choice. And another analogy I use is it's kind of like our faith. You know, there's a lot of people that know about God. They know of God, but they don't make a personal decision.

And we had to do the same thing. We knew about you. I mean, I'm not comparing you to Jesus Christ, Dave. But we knew about you. We just didn't make it personal and make that decision that we're going to do this. And so for us, it was just deciding that we were tired of making too much money and being, you know, living paycheck to paycheck. That's a good insight because I had a friend of mine tell me a while back, and he's a very accomplished guy. He said, when things change for me on your stuff, I submitted myself to the process.

And that's what you're talking about with marriage or with your spiritual walk or with financial peace principles. You can look at them and believe them but until you submit yourself to that idea to the ideas and meaning you change your behaviors and you say i'm going to do it that way i'm not going to argue about it anymore i surrender and when you do that with your spiritual life it changes everything god becomes a real god then he's the lord and um or you submit yourself to uh you know a personal trainer to get in shape you know you but you're i thought that was a great i hadn't used that word before in the setting, and he told me that about two years ago, and I've brought it up since.

I think that's kind of what you're talking about. Exactly. Very well done. You know, Dave, when Jason came to me and he wanted to just commit to being debt-free, I really didn't hesitate. I trust him as my financial leader, my spiritual leader in our home. So I was completely on board, I thought. Um, and so he, you know, something simple. We're from Seattle. We're

coffee drinkers, you know, and when we were getting out of debt, uh, he gave me a $25, um, coffee allowance per paycheck, uh, while we were paying off debt. And after about four months, I realized that's actually a lot of money. And we were redoing our budget for the following year. And $25 a paycheck, $50 a month, $600 a year, it adds up. You have to start small. You have to stop spending money. And we started putting all of that on our debt, and I didn't need the coffee.

You know, the weird thing is is it's not the $25. It's not. It's the discipline. It's the idea of I'm all in. It's true. And then that's what changes things. And then, you know, you drink coffee like no one else. Now you can drink coffee like no one else.

It's true. But you know what? I still don't. You know, I changed that habit. I drink my coffee at home. It's a treat when I get coffee out now so i i didn't go back to that interesting very cool you guys so what do you tell people because you hear me ask this all the time the key to getting out of debt is you paid off 70 000 bucks in 21 months

go ahead no you go ahead well i think it was a lack of discipline that got us into debt. So it was intense discipline getting out of debt. It was just, we decided we had, you know, you cut up the cards, you cut off the cable, and, you know, you cut off the kids a little bit, too. We had to do some things and not buy certain things that we wanted to buy. But it was just a decision. And, you know, budgeting, of course, played a key role. I mean, I got spreadsheets that you wouldn't believe. But I know every dollar is a whole lot easier to use.

But, yeah, it's just discipline. You know, for us, I think adding the extra income, we needed to do that because we were already living pretty – I don't spend a lot of money on clothes and things like that. So we were already living kind of minimum. But when it came down to it, we were getting ready to send a daughter to college and we couldn't afford it. And so I didn't hesitate to go find a second job. Jason didn't hesitate to find something to do. We had to make some more money.

And so that's what we did. And even after we got out of debt, we both still keep our second jobs. We have two college kids now. We're paying. We're cash flowing to college tuitions. And so we feel really great about that. Yeah, that's very cool. That does change everything.

Well, well done, you guys. Thank you. Very well done. Did you have a lot of cheerleaders or people thought you were crazy? Not as many cheerleaders as you would think. A lot of people thought we were crazy, you know, and it was hard. I had to go through two football seasons without cable. That was tough. Wow. But no, people kind of thought we were weird and, you know, we're doing, not doing things that we want to do and not doing things everybody else is doing. So yeah, we had more distractors probably than cheerleaders, unfortunately.

And, you know, the majority of people that I know have a hard time understanding when I talk about spending my allowance. And I can't do that because my allowance is gone for this paycheck. But that's been helpful for us. If the allowance money is gone, if the cash is gone, that's it. There's no more spending any money. Well, sometimes when people hear that, they hear that you're somehow under the control or thumb of your husband. And that's not really what it is at all. The two of you made the decision together.

That's right. That's what we were going to do. Yes. And as different things, different circumstances changed, we'd go back and have discussions about how much we spend or how much allowance. And the allowance has actually gone down. Cool. All right. $70,000 paid off in 21 months, making $120,000 to $170,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Well done, you guys. I love it. Absolutely awesome. Very fun.

That's as good as it gets. This is the Dave Ramsey Show. Steve is with us in Cleveland, Ohio. Hi, Steve. How are you? I'm fine, Big D. How are you doing? Better than I deserve, sir. What's up? Well, I was in a car accident last year, and I'm fine, Big D, how are you doing? Better than I deserve, sir. What's up? Well, I was in a car accident last year, and I'm going to receive a settlement for pain and suffering. And I was wondering, is that considered a timeable event?

I can't really, you know, it's technically not first fruits, but I really didn't do anything to earn this money. I didn't get hit by a car. Yeah, I'm sorry. How are you doing? Oh, I'm doing fine. It was the good Lord saw fit to build the Cleveland Clinic here for me, so I'm okay. Okay. Very cool.

Well, that's good news. Well, there are obviously typically three reasons that people get settlements. One is to offset medical bills and expenses, and one would be to offset loss of income going forward. And the third is punitive, which is pain and suffering usually is how that's qualified, something like that. So certainly the first two, medical bills and offset of income, would be tithable because it's income you're not getting, but now you are getting. You're not getting because you're not working, but you are getting because they offset it with this, and that would be there. So, you know, here's the thing. I don't get real legalistic about the tithe.

I do tithe a tenth of my income to my local church, but I don't sit around and wring my hands about it a lot. It's not a salvation issue, and God doesn't love me more if I tithe perfectly or don't tithe perfectly. When in doubt, I do a couple of things. One is if when in doubt, I just give because I can't mess up by giving, number one. Number two, Sharon and I will talk about it and pray about it together, and if one of us feels strongly about it one way or the other, we'll probably go that way. We want to be unified in our giving decisions, in other words.

And as far as a technical biblical application of this, the tithe comes from Deuteronomy, as you probably know. And Deuteronomy 28, and it says to tithe or give a tenth of the word literally in the hebrew means tenth um of your net increase and so um i mean you can get you can get really picky about what any way that i'm increased and so i've got a friend that when his property value goes up he tithes on that every year i don't i i tithe on i sell the property if i make an increase right and so i tithe on my taxable income is what i do okay um you know it is that helps me just keep up with it because i'm not gonna sit around and figure out well that mutual fund went up a hundred thousand dollars

i didn't cash it out it It's still sitting over there. But when I take it home as profit, I call that net increase. And that's how I look at that. But you could define net increase a lot of different ways, right? Sure. Oh, yeah. And so how much is the settlement? I want to say the settlement's probably $10,000.

And if the attorney gets done with it, I'll probably end up with probably half of it. Okay. Well, if your net increase is $5,000, then I might look at tithing on that, but I'm not going to do a Dave Ramsey legalism thump you on that either. Well, it could be that me thinking about this could be the Holy Spirit talking to me as well. Yeah, that's why I always kind of use when in doubt, do it on giving because you really can't mess up. That $500 isn't going to make your life or break your life one way or the other. And so it's just God's Spirit is whispering in your ear, and you just go, okay, just give him the nod and rock with it. And I've never regretted that when I've done it.

I've never looked back and go, I shouldn't have done that. I've never had that happen to me, not once. And I've had all kinds of different giving emotions and experiences, but regret has almost, I can't think of a time in any kind of giving I've regretted. Now, I've regretted some institutions that I chose to support. I wished I didn't later and that kind of thing but in terms of me just being out the money uh no i've never had look back and go and i shouldn't shouldn't have been giving a giving thing doesn't work that has never come up danielle is with us in amarillo

texas hi danielle how are you hi dave how are you better than i deserve how are you? Better than I deserve. What's up? All right, so about a year ago our house flooded internal of the hot water loop while we were on vacation and so we had to go back like three months worth of all of our expenses and we realized how much we were spending like eating out and all that kind of stuff so we were were like, oh, my God. And so we got on a budget. I read your books. And so we're working through it. We paid off the contract. We lived out of our house for over six months.

That's how bad the flooding was. And so paid off the contractors for all the upgrades that we did to the house. We figured we might as well do it now because our house was completely gutted. So what's your question, Danielle? Okay, so we've already paid off $10,000 in our debt since January. We have money in our bank account because we kind of just saved. We didn't really start our debt snowball once the house flooded um because we were waiting for that bill at the end and um so we're on baby step number two we have about like ten thousand dollars in our bank account right now we've paid

like i said ten thousand since january um we have about thirty thousand dollars left in debt um other than the house how far down do we go in our bank account? We teach baby step one is $1,000, and everything else that you can get your hands on that's not in a retirement account goes with the debt until the debt is clear in baby step two. Okay. That's what we cover in the Total Money Makeover and in Financial Peace University, and that's what I would do if I woke up in your shoes.

The reason you're struggling with that idea is that you've had so much drama in your life with this flood and your personal home being all torn up. And it's hard to get everything stable when you're living out of boxes. It's hard to feel a sense when you're living out of boxes. It's hard to feel a sense of stability and a sense of thing. And so you're having a tendency to emotionally want to hold that money because you face so much drama in recent months. And that's a normal reaction on your part. I probably would have that same reaction if I were in your shoes. However, it sounds like, though, that things are stabilized.

And if you don't see a reason for drama coming up, if you see reason for drama coming up, you may not need to be doing your baby steps right now. But if you don't see drama right there in your future, and I don't with the story you told me, then I'm going to work the baby steps the way we teach down to $1,000. Our question of the day comes from blinds.com. You know, Jade Steinfeld, my friend, started blinds.com about 20 years ago to make the complex process of ordering and installing new custom blinds simple. With blinds.com, you get free samples, free shipping, and with the new promos they run

every month, you're going to save even more. Always put in the promo code RAMSY, and you'll see the best possible deal out there at Blinds.com. Rules and restrictions apply. Today's question comes from Charles in Tennessee. I stupidly took out some payday loans. Now I can't seem to get rid of them. I owe a total of $2,400 on three different loans.

I pay so much in minimum payments that I can't save enough to pay any of them off. How do I get out of this? Well, one of two ways, Charles. The best way is to go take three extra jobs and, you know, make an extra $1,000 or $1,500 a month for a few months, like delivering pizzas six nights a week and that kind of thing. That'll make you an extra $1,000, $1,500 a month, and that'll clear them up. I think you've got an income problem is what it sounds like inside of this question. And that's my recommendation is do something dramatic because you have a dramatic problem.

You have to have a dramatic solution. And that's going to be like working like a crazy man for a short period of time. If you don't do that or can't do that, the only other thing I can think of, and it's a painful idea, and that's why it's by far my second choice, way down the list of second choices, is just stop paying them. And because you can't pay them, you know, you're stuck. And if you stop paying them, then, you know, you're going to get sued, of course, and then you're going to settle the lawsuit.

And at least it stops adding $800 a month to this with your minimum payments. And that's the problem with a payday lender. It's the scum of the earth. A payday lender is the worst possible thing out there. It averages 840% annualized interest rate. It's amazing. That's a lot of money. And that goes away, of course, if you stop paying them and you get sued.

But I would prefer you just jack up the income and knock them out and then never set foot in one of those places again ever for any reason. This is the Dave Ramsey Show. Hey, guys, it's Kelly Daniel, associate producer and phone screener for the Dave Ramsey Show. Hey, this hour of the show is over, but you can find our podcast on iTunes or Google Play. We're everywhere, for free, here to serve you.