The Ramsey Show - App - COVID Was the Wake-up Call I Didn’t Know I Needed (Hour 3)

Episode Date: November 23, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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, Dr. John Deloney. Ramsey Personality is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. You can tune into the Dr. John Deloney Show as a podcast on the Ramsey Network anytime you'd like.

It's unbelievably popular. A huge amount of listenership on it, just out of the gate. Everybody's loving this material, all about mental health, all about wellness, all about boundaries and relationships, and good old grandma's common sense mixed in with a couple of PhDs. And so it works out really good. Be sure you tune in. And you can even call today.

Make that part of this hour if you want. 888-825-5225. We're going to start this hour with Samuel in California. Hi, Samuel. How are you? Better than I deserve. Thank you for taking my call. Sure.

What's up? So I drive a 2018 Accent in my parents' name, and they co-signed it. There's $6,150 left, and I can pay it off today. My dad might not like giving it because he wants to buy me a new car loan, which I don't want. But I think he'll give it to me, and my mom wants to give it to me if I pay it off. But how should we do the car title transfer and is there a gift tax? There should not be a gift tax. It's under $15,000. The transfer, you would have to ask in the state of California

what the process is for the transfer on a gift. In a lot of states, you just put a dollar on it and you gift it over because it's inside the family, you know, your parents to you. Now, if I gift a car to someone outside the family, they may want to put a value of the car on it because a title transfer usually has a tax associated with it in most states. And the tax is based on the amount of the dollars, the value of the car at the transfer. So California, I'm going to guess, is going to figure out a way to tax you. They do on everything else. But I don't know what that is.

So you would just call the Department of Motor Vehicles, ask how you transfer a title where a gift is involved, and have them give you instructions on that or hit their website. They may have an FAQ that will tell you that. You do need to have a firm, before you start writing a check to pay off a car that is not in your name, you need to have a firm agreement with your dad since it's in his name. I mean, you're talking to your mom about this but obviously dad's not in

the loop he wants you to get another car payment answer that's no i'm not going to um so what i'd like you to do is just allow me to pay this off and you title it to me because i'm the one that paid for the car and that would be the morally correct thing for him to do and i think he will but you need to have that clear you don't want to pay it off and then him go okay let's trade it that's your only option bubba and uh you've got your money in a car that's not in your name and this is a deal you shouldn't have done in the first place but it's the best way to put this deal to a close yeah i'm with you i i think you sit down and have a grown-up conversation with dad and you're going to make some grown-up decisions and pay off a grown-up car.

And I think this is step one is being honest with the old man and having that conversation. I love it. Yeah, you've got to be forward. It sounds like you guys are dancing around him because you're, like, negotiating with your mom, so she negotiates for him. And that's more like a 13-year-old instead of a, you know, it's like you're trying to get,

no, you just need to sit down with the players. This is adult to adult, and everybody emotionally accepts where we are now. Your dad accepts that you're an adult. You accept that he's an adult and that he doesn't have power over you except this bad deal. And let's also lean into he's trying to help in the best way he thinks. He's trying to get you another new car. Yeah, he's not trying to hurt you, but what he's offering is not a good idea.

It's not a good idea. That's right. Anthony is in Pittsburgh. Anthony, how are you? I'm doing well, Dave. Long-time listener, first-time caller. Honored to have you. How can we help?

Well, I have a question about some stocks and if it makes sense to cash those out and put that towards paying off my student loans. So I've been pretty lucky in that all I have as far as debt is student loans. I have about $58,000 in student loans and I've decided that I just want those gone. So last month I made a $10,000 student loan payment, brought my savings down to just the $1,000 emergency fund. And I have about, I have about 2,800 a month that I can put towards paying off that debt. Um, cause I'm fortunate enough that I'm staying with a family member, but I don't want to overstay my welcome. So I just want to get out of debt as fast as I can. So I have about 10,000 in stocks that I've incurred just kind of over the last three

years here and there, kind of not managing my money well. And I'm wondering if it makes sense to just cash out what I have in that and take all that money and put it towards just paying off the debt that I have, or if it makes more sense just to keep that and then just only use my income and just continue to try and do what I'm doing and paying off my debt monthly. The shortest distance between where you are and wealth is not a $10,000 stock account. It's being debt-free. Okay. I guess that answers my question. So just cash it out and put it off paying off the debt as fast as i can that'll get you where you want to go the fastest okay in essence that's

the question we're always asking ourselves which way which which of these gets me to wealth the fastest the ten thousand dollar stock account and use my income or to be debt-free and have all of my income to build wealth with. Yep, and that's what I was thinking, and I was just kind of going back and forth. I was like, does the interest that I'm paying on the loan, does that, you know, take it from the difference from what my gains are on the stocks? And my heart told me, no, just cash it out in payment. But, like, the math side of me said something different. Just follow the plan, brother said just follow the plan brother

just follow the plan yeah that's exactly right yeah this is what we teach you know when you're on baby step two you cash out everything that is not retirement any assets you have that are not retirement and use them to get yourself out of debt in baby step two and you throw every dollar out of your budget you can add it to baby 2. And the reason is your most powerful wealth-building tool is your income. All the data we have on millionaires, all the data we have on wealth-building is the typical person that becomes a millionaire in their 30s and 40s and 50s does so by utilizing their income, not by giving it to someone else in the form of debt. It's that clean and that simple.

And that's why Ramsey Brand has beat the debt-free drum for 30 years. Not because debt-free, but debt-free so that you can be outrageously generous. Debt-free so that you can invest. Because when you don't have any payments, have money lots of it man it's it's so primitive and so simple and so profound and so life-changing once you get your hands on it and you just never get away from it then you just go why didn't i think of that you know i've made a really good living peddling common sense i love it this is the Ramsey show Most people know me as the guy who did stupid with a lot of zeros on the end.

I made my first million dollars in my 20s the wrong way and then went bankrupt. That's when I set out to learn God's ways of handling money and I developed the Ramsey Baby Steps. By following these steps, I became a millionaire again and this time the right way. After three decades of guiding millions of others through the plan, the evidence is undeniable. If you follow the Baby Steps, you will become a millionaire and get to live and give like no one else. And now I'm excited to share with you that I've written a new book called Baby Steps Millionaires, and it's available for pre-order right now.

You'll learn how ordinary people built extraordinary wealth and how you can too. I'll walk you through how to invest, build wealth, and bust through the barriers preventing you from becoming a millionaire. For those who are ready, it's game on. You can baby step your way to becoming a millionaire. Pre-order your copy today at Ramsey Personality, is my co-host. Well, it's almost time for Christmas.

And some of you, when you hear that word, Christmas doesn't mean happy holidays. It means stress. Am I going to pay for all the food? Am I going to pay for the travel? Am I going to pay for the presents? But it doesn't have to be that way. Yes, I'm going to pay for all the food. I'm going to pay for the travel. I'm going to pay for the presents. But it doesn't have to be that way. When you have a plan for your money, you can have confidence even when everything else seems out of control. Financial Peace University will teach you how to put together a plan and control,

how to get out of debt, how to save money, how to build wealth, how to be outrageously generous. It's Christmas. get out of debt how to save money how to build wealth how to be outrageously generous it's christmas average household when they're going through this over 90 days pays off or saves $2,700 and pays off $5,300 in debt that's an $8,000 turn in the first 90 days financial peace university is available as a part of your ramsey plus membership you don't have to live with a stressed out christmas make 2020 the year you finally start winning with money. Go to Financial Peace University. Give it as a gift. Join it at ramsaysolutions.com slash FPU. ramsaysolutions.com slash FPU. Rhonda is with us in Phoenix. Hi, Rhonda. How are you? Hello, gentlemen.

I'm fine. Thank you so much for taking my call. Are you well? We are. How can we help? Yay. Okay, so we have absolutely no debt. We own two homes, one in Arizona and one in Florida. We own four cars, no debt.

Way to go. Right. So my father just passed away in June, and I am the beneficiary of his estate, which means that I got about $400,000 cash. Wow. So I have it split in two credit unions to protect it from insurance and NCUA. But I don't know what to do to invest it safely, or I'm at a loss of what to do. Okay. All right.

What are your other investments, then? Do you have other investments? My husband's retiring from the city of Los Angeles, so he has a pension, and he has about $340,000 in deferred comp, and we have that in the conservative profile. And that's the only investment you have? Yes, besides the real estate that we have, yes. Gotcha. And how old are you guys?

Mid-50s. Good. Very well. Good done. Good job. Yeah. Okay. Well, if you're 100% debt-free, you're on what we call Baby Step 7.

And when you get a found money, a big check of some kind uh as a high net worth individual which is where you are i always remind people whether they are nfl superstars or whether they're ronda in phoenix that and or whether it's dave and sharon ramsey uh there's three things you can do with money and you should always do all three uh number one you can do with money, and you should always do all three. Number one, you can invest it. Number two, and you should. Number two, you should enjoy it, and you should. And number three, you should give it, and you should. So I would first earmark what percentage of the money that's coming in is going to go to each of those categories.

And you can decide. I don't care. But just, you know, I'm going to put this percentage towards lifestyle. There's a few odds and ends we want to do. We want to spruce up the house. We want to buy a classic car. We want to go on a trip. I don't care.

You know, say we're going to, I'll just make up a number. You can decide later if it's the right number i'm not suggesting it but as an example we're going to spend 10 of this on fun so that's 40 000 bucks fun okay we're gonna invest 60 of this and we're gonna give 30 of this and we don't have to do it instantaneously in one check but we've just earmarked it for that so that when we spend the money on ourselves, we don't feel guilty and we don't feel like we're out of control. When we invest the money, we don't feel selfish, and when we give the money, we don't feel like, oh, gosh, did we do something wrong

or did we give too much or did we not give enough? You decide all of that ahead of time, put those dollars in three different buckets. In your mind, the money's already gone. Now you've all just got to actually do the transaction so that it is gone. So it might take you two years to spend that $40,000 on yourself. It might take you three years to give away the portion of the generosity. It might take you six months to make a decision on your investing. As far as the investing goes, I personally would just tell you either to buy some real estate that you pay cash for if you love real estate or buy some mutual funds, which is what I do.

I do those two things. And so if you're going to sit down with a good, if you're going to do some investing in mutual funds, it doesn't sound like you've got a lot of background in that. You would sit down with a SmartVestor Pro. Go to Ramseysey solutions.com click smart investor you'll find the people we recommend they'll sit down with you and start learning about mutual funds because we're about to put a big chunk in mutual funds here but the big thing here is make the decisions ahead of time before the money leaves it keeps all the emotions and the regret and the financial hangover from happening you don't do stress spending or you

don't feel weird about daddy's money went to this or that yeah and i would maybe the giving portion is something that you and your dad shared in common right that was something that was important to both of you and that that can be a way you can honor that money there and go have some fun with it. I love that. And a good thing to always do, John, I think, is, you know, Dad obviously did pretty well. Yeah. And I always just think of Dad sitting in heaven. Does he like this? Am I doing something that he'd be proud of? Yeah.

With his generosity, with his expenditure. You know, Dad always liked such and such, and he always wanted to go to Africa. So we're going to Africa, and we're going to spend $20,000 on a three-week trip or whatever. I don't know what the number is, but, I mean, and Dad would be proud of that. You know, or Dad would, you know, it's his legacy. And so you just think about, is this something that will make your daddy smile? Is this something I'm going to pass along to our kids that's going to help them smile you know exactly and make him smile too because his legacy keeps going so the fact that you didn't just waste it all with no plan or intentionality very seldom is that honoring to the person who

left it to you almost never but how wise are you he passed in june and you immediately put it in an account and a credit union just walked away from it for a season. That's brilliant. Good for you. Yeah, good move. Trish is with us in Fort Worth, Texas. Hi, Trish. Welcome to the Ramsey Show.

Thank you so much for taking my call, Dave. Appreciate it. Sure. All right, so just to jump into it, my husband and I are trying to figure out if in the next five years it makes any sense for us to start buying into some family property that my parents own. There's currently a large house on the property and then a good-sized guest house. And the plan would be that in five years, we would potentially move out there, take over the large house. My parents would move to the guest house, and we would start paying them, you know,

monthly and start accruing equity in the property. And so part of that's because we have a baby. The school districts out here are a lot better than where we currently live. But it's trying to figure out financially if that would be a wise move for us. We're currently in baby steps five and six. And I will also say that the family property is quite leveraged. My parents just did a refinance. So there is some decent debt on the property at this time.

Are you there, Dave? Yeah, I'm just – I don't like this. There's no way I'm doing this. You don't own anything. You don't own anything.'s no way i'm doing this yeah you don't own anything you don't own anything even if we would correct even if we and i thought you could be currently on a house to relive is that we would put some equity in up front yeah but you don't own anything it's in their name and it's leveraged well we would uh you know get some with a consult with like an estate planner and all of that so that we would start. Yeah, but you can't split this title up.

It's leveraged. Gotcha. Okay. You don't own anything. So as long as there's debt on it, there's just not a fee. Well, they're not going to be able to put the title in your name. Okay. Because they'd have to pay off the mortgage to put the title in someone

else's name i guess they could carve off 10 acres in the house not unless there's a not unless there's a release clause in this mortgage and there's not so they'd have to refinance again the whole thing yep um okay so how much property is involved um 13 acres so it's not huge 13 acres yeah yeah hypothetically if it was paid for you could subdivide it and the partial that you're 13 acres, so it's not huge. 13 acres. Yeah. Hypothetically, if it was paid for, you could subdivide it, and the partial that you're going to live on, they could actually title it to you. You could put the money into that, and they could owner finance the difference, which I still probably wouldn't do, but at least that way there's some semblance of protection.

But no, you can't just write checks for somebody else's property that's very unwise you're just asking for trouble no no please don't do this you're gonna do it anyway please don't do this Thank you. Dr. John Deloney, Ramsey Personality, best-selling author, is my co-host today as we answer your questions about your life and your money. In the lobby of Ramsey Solutions on the Debt-Free Stage, Ryan is with us, winning the Best Dressed Debt-Free Scream Award. Ever. Yes. Ever.

Ever. Ever. That is exactly what I was going Award. Ever. Yes. Ever. Ever. Ever. That is exactly what I was going for. Never had a full-on suit. It is usually people in their bathing suits. You look like you're ready to break out in a Frank Sinatra song right now, man. I'm just saying. I mean, I figured if you're coming to do your Debt-Free Scream one,

that'd look like a million bucks, right? Thank you. Everybody, yes. Dress for success. I'm just saying. Look at you, man. Where are you from? Pittsburgh, Pennsylvania. Awesomen success. I'm just saying. Look at you, man. Where are you from?

Pittsburgh, Pennsylvania. Awesomeness. How much have you paid off? I paid off $120,000. That'll work. And how long did this take you? 17 months. Wow.

And your income during that time? I went from $45,000 all the way to $140,000. Whoa. What do you do for a living? So I DJ weddings on the weekends. I work for a nonprofit. I'm an IT consultant. So I have a full-time salary with them and hustle.

I hustled like none other this last year. So is this the DJ look? It is. With the voice. You got the voice. You got a great set a great set of pipes thank you thank you you got the look i'm just saying man this is i bet you bet i bet you're making some money doing that yeah yeah so i go by dj 007 so this is kind of like my beautiful that's even better well played man well done that's awesomeness well very cool well thanks for dressing up for us, man. Yeah, I appreciate it. It's an honor to be here.

Very cool. What kind of debt was the $120,000? $20,000 to the IRS and $100,000 to Salome Student Loans. That simple. How'd you get $20,000 into the KGB? How did 007 end up owing the IRS? Oh, your small business that you didn't pay taxes on. Exactly.

Yeah. Oh, okay. So, yeah, I started out, you know, I was one of the borrowed future casualties, right? I went to the University of Michigan right out of high school, out of state. And, yeah, that was the thing to do, right? Just go to the best school you get accepted to. What's your degree in? I didn't get a degree so i was there for four years um you know just

signing papers taking whatever classes i could to stay enrolled had no idea what i wanted to be when i grew up you know four years went by like that and uh burned out dropped out never went back um and left with uh 80k in debt and,000 accrued in interest over the years. So yeah, I just started to fly under the radar over the years, just being self-employed and just letting that interest accrue and just taxes on my unpaid taxes on income. So yeah, I discovered you in 2006. Started listening to your radio show. You know, I got choked up any time I would hear a debt-free scream. And I was like, man, that'll be me someday once I get the right job.

But, you know, I'll wait on it. Even tried to, you know, throw $200 a month at my loans at the time. But that was barely covering interest. I got discouraged. Jumped off the wagon. Fast forward to 2015. Got a good job. I was like, okay i got discouraged jumped off the wagon fast forward to 2015 got a good job like okay i'm back on the wagon took financial peace university bought my next car in cash started ubering got excited lost the job about six months later or so

got discouraged jumped off the wagon again finally 2020 rolls around i've been djing for about four four years or so making good money and i'm just like all right this is good but i can do more i can finally you know hit some goals this year so i was like all right let me get a let me get a full-time job so i got a salary job on top of my weddings and i was ready to rock and roll boom covid hits no more weddings all of my hustles stopped yeah you know no more no more ubering no more weddings no more dancing dance instruction it was just all came to a halt so i got kind of discouraged but um you know what covid was the wake-up call i never knew i needed and i suddenly became really aware of my mortality and i was like wow what would i regret if I were to you know bite the bullet this year and you know

I was ready to commit to a three-year plan you know prior to COVID but at that point I was like you know what I want to do this as fast as humanly possible and I just waited patiently for the opportunity to hustle again and sure enough end end of the summer, weddings started to pick up again. Deliveries absolutely exploded. I did every app you could think of. Uber, DoorDash, Grubhub. Just working all the time. Yes.

Waking up 7 a.m., driving before work, driving during my lunch break, driving when I get off, on the weekends when i'm not wet you know you know doing weddings so just hustling as much as as humanly possible i drove your income way up and then you just thumped it yeah yeah and i got so excited by the momentum that i was doing that i was having that yeah i just got on fire man so when people hear this story and i love that it's so real fell off the wagon jumped off the wagon you said i like that better than fell off i jumped off twice i intentionally quit two times and then i come back around and then finally a little bit of existential stuff hits and you go oh i don't really want to be remembered for this right so

we got to get this knocked out it's time to do this and the mortality of covid it woke a lot of people up to have some meaning to stuff they're doing that's good that's a good wake-up call and it's game on so now people hearing the story what do you tell them the net net key is to getting out of debt once you decided decided to do it, what was it? It's having the big picture, writing it down, absolutely, and seeing your progress, like paying attention to your money, whether you're using EveryDollar or another app. One thing I've found to found helped me because we live in such a digital age with debit cards and such

is just keeping a digital register of every dollar that you're spending, just like you advise people to do. So yeah, no matter what I spent, I immediately would record it in my phone as I spent it so that I could feel it, even though we can't feel it with the exchange like you always say but i could feel something every time i could see the number go

down like so that's important um so what was the difference this time because your income shot up after your resolve kicked in yeah not the other way around the other two times when the income dropped you gave up what's the difference uh the difference this time i think was just the the wake-up call to mortality and just uh a bigger why a bigger why absolutely the why rather than i need to do this is i became i've got to do this right and i always thought it was just so far out of reach even planning i was just like oh this is going to take me three to five years. And it always seemed like, you know, too far ahead in advance to plan. But I guess one thing about DJing weddings is I started having to plan my life like years in advance.

Like people are booking you like one to two years in advance. So I'm like, all right, well, if I know I'm going to be making this kind of money for the next two or three years like why don't i just buckle down and sacrifice and you know uh just get it out of my life how does it feel to be free it feels amazing like i cannot describe it like when i finally paid off that lump sum like i was just in tears for, like, 20 to 30 minutes. It's like I'm going to roll into a building on a Tuesday in a tuxedo, baby. That's how I feel, a free-out feel. It's incredible, man. Well done. Very proud of you, sir.

You're a hero. You took control of your life. Very well done. You changed my family, too. And you didn't give up. You didn't give up, man. That's it. That's it.

Kept going. Copy of The Legacy Journey. That's the next chapter in your story to be a Baby Steps millionaire. You're on your way. And a copy of the Total Money Makeover coming to you as well for you to give away and light somebody else's world up. Absolutely. You've got a lot of style, man. It's an honor to have you.

Very well done. It's an honor to be here. Very well done. Ryan, DJ 007 in the tux to do the debt-free scream. I love this guy. If you're getting married in Pittsburgh, we got your guy. So fun. Yeah, apparently we got the best DJ on the planet here.

This is awesome. $120,000 paid off in 17 months, making $45,000 to $140,000. Count it down, Ryan. Let's hear a debt-free scream. Three, two, one. hear a debt-free scream three two one i'm debt-free there you go there you go baby whoo this is the Ramsey Show. We'll be right back. Our scripture of the day, Psalm 20, verse 7. Some trust in chariots and some in horses, but we trust in the name of the Lord our God. Bill Bradley said, Ambition is the path to success.

Persistence is the vehicle you arrive in. Ooh, that's no doubt about it. No doubt about it. Perseverance is the thing. Dr. John Deloney, Ramsey Personality, is my co-host today. Hershey, Pennsylvania. Up next, Jacob is calling.

Hi, Jacob. How are you? Hey, guys. How are you doing? Better than we deserve. What's up? So my fiance and I are getting married in May of 2022, and we are going to be paying for the majority of our wedding ourselves. And I was just wondering whether you would recommend one person paying for the wedding. Maybe me and my fiance is splitting it half and half i know you probably don't suggest opening a bank account for the wedding i was just wondering what your opinion

was on that i don't mind opening a bank account for the wedding and both of you and both of you fund it and both of you have access to it this is a a venture that we are doing together prior to being married and so we can fund it um i just wouldn't share all your finances prior to the wedding meaning i would share the knowledge of them but not the transactions uh don't act like you're married legally before you are it gets yourself in a pinch but um so i i don't care who pays for the wedding i don't know that there's a moral thing here i mean you know if you want to go old-fashioned uh the bride's parents pay for it right that's old-fashioned obviously that's not what's going down here so uh why would one of you or the other bear more of the cost is there a

reason no there's no reason i was just wondering whether it makes more sense to take it out of one person specifically or just to keep it half and half. Seems like there's something else underneath this question. Because, I mean, if the wedding goes off, then... Doesn't matter. Yeah, it doesn't matter the following afternoon. Yeah, yeah. I was just looking for your guys' opinion. Do both of y'all have the cash to fund this wedding?

Yes. What do you make? I make about $42,000. What does she make? About $35,000. Okay. Do both of you have about the same amount of debt? Neither of us have debt.

Okay. Sounds like everything's pretty equal yeah we're pretty much on the same territory as far as baby steps go i mean i guess you know it would like if you call me up and you said uh i make 30 and my fiance makes 200 um and she wants to pay for more of the wedding i would go well that mathematically kind of makes sense uh but it's not like a moral obligation or something wrong and john's right as soon as you and she wants to pay for more of the wedding, I would go, well, that mathematically kind of makes sense, but it's not like a moral obligation or something wrong. And John's right. As soon as you come home from the ceremony, the honeymoon, it doesn't matter anyway because it's all combined at that point, and the net effect is exactly the same after the wedding. Part of me likes the idea of you all two going to get a checking account,

wherever you're going to bank as your joint account, and she puts $5,000 in, you put $5,000 in, whatever you're paying for this wedding, and you all work from there. And then that's your account, and you close your two separate accounts when you're married. Part of me likes that, and part of me thinks, man, weddings are so stressful. Just somebody pay for this thing, let's get it over with. Sounds like six and a half dozen or another, but I don't know.

It'd be okay if you fund it together. And I'll go ahead and give you the other piece of advice, and that is weddings are like anything else. They're a project, and you should do some planning on them and set a budget, set a boundary, and say, okay, we're going to spend X, and here's how much of X we're going to spend on the photographer. Here's how much we're going to spend on the reception. Here's how much we're going to spend on the photographer. Here's how much we're going to spend on the reception. Here's how much we're going to spend on the dress.

Here's how much we're going to spend on the preacher. Here's how much we're going to spend on the honeymoon. And the total is the amount that we're going to have in the account, not more, not less. We're going to have spent the money. And then if you get in there and you go, well, the reception is, you know, the reception, they want to put these flowers out, and the flowers are not in our budget. Well, they're not in the budget, so we don't put them out. And so you have to have some guidelines ahead of time because you're going to bump up against a no,

and if the no is not brought to you by your plan, then it sounds like one of you is deciding over the other one what's going on, and you go, hey hey you can't do an eight thousand dollar dress we had 800 bucks budgeted for the dress and that's what i don't like because then it's well i'm paying for the dress then and you pay for this and then i'll pay then now we're talking division right yeah you got to have a you need an overall budget that you agree to for the project it's how you build a house it's how you do a wedding it's how you do anything that's project based if you start with the line item to budget, and then, you know, you may have to make a few adjustments along the way,

but we've got an agreed-to value system of what this wedding is going to be. We care more about the reception than we do about the flowers. So we're going to put this more money on it, you know, or we care more about the flowers than we do about the reception. So we're going to put this money on on it you know or we care more about the flowers than we do about the reception so we're going to put this money on it and you decide that up front and then when you get down in the emotion of broadzilla or whatever picking stuff out then it doesn't all blow up on in your face or it shouldn't if it does you got other issues right josh is with us in seattle hey josh welcome to the ramsey show thanks d Thanks for having me. I'm excited to be on with you. We're honored to have you.

How can we help? Yeah, so I am actually a second generation following your principles, Dave, of financial success. And I'm currently in a spot where I am really wanting to buy a new car. I'm a natural spender, and I've saved up for it. And with the craziness of the market, normally I would buy used, but at the price of the car and based on my financial situation, I'm wondering if it's okay if I celebrate and move forward in that way. Are you a millionaire?

I'm not a millionaire yet. Then I wouldn't buy a new car. Okay. Does the price of the car and the rest of my financial situation matter, though? No, because you don't have enough net worth to absorb the loss of a brand-new vehicle. Okay. You can buy it if you want to buy it, but I wouldn't. What's the value?

What car are you talking about? Yeah, so it's Ford's new little pickup truck. It's like $22,000. Okay. And I've got the cash saved up for it plus rolling in my my current car's value and and yeah okay and and your um your your income is what uh my income's about a hundred thousand dollars a year okay and uh how old are you i'm 31 31. Okay. All right. So, Josh, I can tell you what I did. My wife, we needed a new car, and Dave takes care of my family pretty well,

and I went and bought a used car, and I did that about three weeks ago. And I walked on and wrote a check for a car on the car lot down the street here, and then I drove home. And so that's what I'm doing in my house, man. And even if it was $5,000 difference between a 2018 and a 2021, whatever the thing was, 2019, I don't remember what year it was, even if it is $3,000, $5,000, I'm not going to give them that money, not on a car like that.

Okay, here's the thing. The way you're structuring your sentences and the way you've asked the question tells me you have a really bad case of car fever you are really sucked in and in love with this little truck you have bought it you have driven it you fantasized over it and now you're rationalizing the purchase of it it's going to give you muscles your hair is going to grow back all the things you know it's it's you know it's going to make you sexy it's going to do all this and it's just none of this is true it's a stupid little truck yeah and they all go down in value and you can do whatever you want to do josh you're a grown man okay but you called and asked me the rule of thumb that i've used for 30 years

and it's it's served me well is don't buy a brand new vehicle because vehicles go down in value unless you have a huge net worth and the ability to accept the loss of value well with covid in the crazy car market and i know but they're going to go down in value they're not going up five years from now They're not going up. Five years from now, things are going to be worth nothing. And ten years from now, it's going to be worth double nothing. And that's what they do. That's what all of them do. And so you just decide how much of that you want to absorb,

and it's probably not going to cause you to go bankrupt. It's probably not going to hold you back that much. But it is a good rule of thumb to not buy the largest thing we all buy that goes down in value uh to buy the worst possible scenario of it going down in value which is brand new um unless you've got a large net worth to absorb it it's that simple it's not a principle i just i just did it i just did it it's just arithmetic and so you but you can do whatever you want, son. It's okay.

I mean, we'll still be friends. But I wouldn't advise it. John, good show today. I agree. And also with you. Very well done. And Austin's on the phones, and James is running the booth in there. I'm Dave Ramsey, your host.

We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.