The Ramsey Show - App - Dealing With Unexpected Job Loss (Hour 2)

Episode Date: September 3, 2018

The show about you

🎵 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 has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225 that's 888-825-5225 donna is with us in new brunsford new brunfels texas hey donna how are you i'm doing well and yourself better than i deserve what's up in your world? Well, I have read your total money makeover, and it says sell the car. So how do you sell the car when you're upside down a good $6,000?

It says sell the car if what? Well, I have $121,000 in student loans, so my car needs to get paid off so I can pay off my student loan. And how much do you owe total on your car? $10,700. Okay. And your household income is what? I make about $75,000 a year.

Okay. And you have $126,000 in student loan debt. Yeah. That was stupid. What do you do for a living? I do ultrasound. Oh, okay. Well, that's good news.

Okay. Well, it says sell the car if you can't be debt-free within two years and the car is keeping you from getting there. Yes. Okay? Your car is borderline. If your car was $20,000, it would be a no-brainer. You'd sell it.

Okay. At $10,000, it would be a no-brainer. You'd sell it. Okay. At $10,000, I'm not sure because, you know, the point is you're not going to, and you said you're $6,000 upside down? Yeah, according to the blue book. Oh, you owe $16,000. No, I owe $10,000. And when I took it in to have it appraised to see how much they'd give me, the max they'd give me was $6,500, and that was me saying no, no, more, more, more.

Well, that's a wholesale offer. That's not the retail offer or private sale offer. A private sale offer. So you got a wholesale offer from a dealer of $6,500, and you owe $10,000. Mm-hmm. Okay, well, that car is probably worth $8,000, $9,000, somewhere in there, if you sold it on private sale, which is we don't recommend you wholesale it to a dealer unless you're just desperate, and you're not desperate.

You're just broke on student loans. Yeah. See, here's the thing. If you sell the car for $9,000, I'm not going to recommend you sold it for $6,500. You'd be $1,000 upside down, and you'd have to write a check for the difference or borrow the money for the difference, okay? Mm-hmm. And so you would get rid of $9,000 worth of debt.

Oh, wait a minute. You've got to have a car. Yeah. And if you buy a $3,000 car, well, then you're $4,000 in debt instead of $10,000 in debt. Doesn't really solve much. No, it doesn't. Okay. Compared to the whole situation.

But if you sold a $25,000 car and you got a $5,000 car, that starts to solve a lot. Yeah. That's where we lean into, where you've got some super expensive car as a percentage of your income, or as a percentage of the problem, you know, is the other thing. And in yours, it's low enough. I'm probably going to fight to pay it off and keep it and drive it. Now, you're going to drive it until you get these student loans done. And we got to get

real serious about crunching your lifestyle down to nothing i mean no life so you can clean up this student loan mess because it's going to be there a long time if you don't get crazy serious about it yeah like 30 000 35 000 a year on it means you've got nothing left over after taxes and food. Yeah. Barely making it. Okay? So work your debt snowball, and if you put $136,000 in that debt snowball, put $35,000 on that, that's a four-year plan. And you've got four years of nothing while you clean this mess up.

Maybe three. And, of course, as your income comes up, it's going to shorten that. And your income probably will come up as you do this. I take it you're single. I am. Well, I'm divorced, mother of four. Okay. Yeah.

Yeah. How old are the kids? Two of them are foster-to-adopt kids. But I have a 12- and 15-year-old foster-to-adopt children, and then i have a senior in high school and a sophomore in college okay foster to adopt that does that involve an income to you yes it does right now okay all right it will drop as soon as i've adopted them to about half of what i'm getting but yeah and then their education is probably free

their tuition is covered yes okay good good okay good, good, okay, good, good. Well, you've got your hands full for sure. You've got a big heart. But these kids are going to be on beans and rice, and that's not a bad thing. We're not going to starve them. I don't mean that. But, you know, they're not going, you know, to the Caribbean for spring break. Yeah.

Because mom's got a huge pile of debt that mom's got to clean up. And if you don't lean into this, it's going to haunt you for a decade. And so you've got to do it. It already has. Well, you've got another decade ahead of you is what I'm saying. If you don't make it a big, big deal, it's standing between you and all the stuff you want to do for these kids. And you've got to get it cleaned up.

Have you been through Financial Peace University yet? I have not. Okay, let me help you. I want you to go through that class while you're doing this, and that will get some people around you to support you and be cheerleaders for you and tell you exactly what I'm telling you here, which is you can do this. It's going to be hard, but it's going to be worth it. But you can do it.

I believe you. So hold on. Kelly will pick up. And Donna, if you get scared or you have any more questions, you call me back. If I'm in your situation, I'm driving this car out. I'm keeping it. But you're driving it. You're going to be driving it for a while, a long while.

All right. Up next is going to be Wyoming. Colton is calling. Hi, Colton, how are you? I'm doing very well, Dave. Thank you. Good. How can I help?

When do I have an offer? When should I move out from my parents? When should you move out from your parents? How old are you? I am 21. Okay. And what's your income? At the moment, I'm just getting my second job, but the middle end of October, I'm going to be making somewhere close to $24,000 a year.

Okay. And are you in school? I have completed my two years of college and have an associate's in industrial electrical. Okay. Are you going to go further, or is that going to help you? Is that your career goal? That's it? I'm hoping to go further, but I'm waiting until I can pay for it out of pocket rather than being a student.

Good. Good. Okay. How's your relationship with your parents? It's very good. I do pay a small rent, but it's in conjunction with doing small side jobs for them. Okay. Do you intend to go to school immediately? No, not until I have a job in my field.

Okay, so you want to kind of do that at night type of a thing? Yes. Okay, cool. And how's the job hunt going in your field? It's going sort of well. There are changes in it, and I know I'm not going to get one right away, so I am having to take some full-time jobs that wouldn't do as much as I'd want it to. Gotcha.

Okay. Well, I mean, the trick is can you run a budget on $24,000 in Gillette, Wyoming? I think you probably can. Not going to be a lot of room in it. There's no huge hurry here. I don't want you there three more years, but if you're there for six more months or a year or more, that's why you hit some of these other goals. I'm cool with that. The point is, have

a launch plan and a launch date that you and your parents have agreed to. This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money.

They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education

or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Thank you for joining us, America. We're glad you are here. Bert follows us on Twitter. How do you calculate how long it will take someone to pay off their debt?

Well, Bert, I use big numbers. I don't use technical calculations here. Number one, most people who pay off their debts that call in here on the show, like 99% of them, pay off everything but their home within a couple of years. The typical time is two years and under. Now, some people take, you know, 26 months. Some take 36 months. But the vast majority of the debt-free screams and other people we talk to are under two years. And so the interest rates and interest charged during that period of time on the typical amount of debt is almost irrelevant. It's not much.

And so I don't even figure that into it. And so then what I do is I'm just listening for, and I'm using kind of a common sense big number approach. Warren Buffett says he does big number math, and that's kind of the way I do it here because I'm doing it in my head. I'm not using a calculator. And so it's sixth grade math. But I'm just looking at the shovel to hole ratio.

The shovel is how big your income is. The hole is how much debt, not counting your mortgage, that you have. And so let me give you an example. Someone that calls in with $110,000, $120,000 income. That's $10,000 a month before taxes. It's pretty easy. $120,000 divided by 12, right? $10,000 a month before taxes. They're getting home with $ divided by 12, right? 10,000 bucks a month before taxes.

They're getting home with 8,500 bucks, give or take, right? Now, they tell me, making $120,000 a year household income, that they have $10,000 worth of debt. Now, you tell me, how fast can you pay off $10,000 if your take-home pays $8,500? So I'm looking at the $120,000 versus the $10,000. I mean, if you can't do it in three months, something's wrong. $3,000 a month, right? $3,300 a month. You can do it.

Four months max. But, I mean, it's not. You'll be done by Christmas, basically. So that's what you're looking at, and that's how I look at it. Now, you take that same person making $120,000 household income. They have $200,000 worth of debt. Oh, my Lord. Well, I mean, 200 divided by 50 is 4, right? So $50,000 out of 120, is that doable?

Yeah, that's doable. That's beans and rice. That's a pretty tight budget because you've got to take taxes out of that 120, and you've got to eat and do everything else during those years. But that's a lot of debt. That's a real bad ratio, isn't it? And so they're probably looking at four, and if they get really cranked up, they'll probably see an increase in income during the time that they are getting out of debt,

which almost everyone does see an increase in their income because they're working like crazy people to get out of debt, which almost everyone does see an increase in their income because they're working like crazy people to get out of debt, then I can say pretty conservatively that they can get out of debt in three to four years. But if they say, I'm going to be in debt seven years, and that's their numbers, I just say, no, that's unacceptable. You're not willing to cut your budget deep enough and lean in and do what you need to do here. You're going to have to get cranked up harder than that. And so that's how I do it. And so it's a shovel-to-hole ratio.

I mean, if you make $50,000 household income, you've got $5,000 worth of debt, that's one you ought to do in a few months. You make $50,000 household income, you've got $100,000 worth of debt, that's going to be years. Again, $25,000 into $100,000, four times.

Can we do that on $50,000? Barely. So that's a hard one. it's going to be four plus years on that one and that's if they don't sell something and reduce that amount you know if 30,000 of that 100 is a car boom we just got rid of a year and i'm going to start selling stuff pretty quick there in those situations and i'm going to start challenging them to increase their incomes as much as i can to shorten the period of time that they're in the debt. And that's how I do the calculations.

It's really not rocket science. There's nothing here that's much past sixth grade math. But I'm just thinking it through with them and challenging them to do all they can do to win for them. Them being you, the listener. How fast can we get you out of debt so that you can become outrageously generous and wealthy, and outrageously generous and wealthy, and outrageously wealthy and generous, and so on. How fast can we get you there? Because if you're making $120, you've got no payments.

You've got some dadgum money. Plus, you've actually learned how to handle money in the process instead of it disappearing every stinking month. And that's what you're facing. So, thank you for the call or the email or the tweet or whatever it is. You can follow me on Twitter, at Dave Ramsey. And we're there. Logan is with us.

Logan's in Minneapolis. Hi, Logan. How are you? Dave, I'm doing pretty well. How are you doing? Better than I deserve, sir. How are you? Dave, I'm doing pretty well. How are you doing? Better than I deserve, sir. What's up? Well, I need to call and give you a little bit of an update here. I'm sitting in my office and I'm staring at this email I got just a couple hours ago

telling me that I'm going to be losing my job. Oh, my Lord. I'm sorry. Well, I would be concerned. I would be scared. But you know what I did, Dave? I paid off all my debt in March. Wow. And my wife and I have got six to eight months of expenses saved up. Wow. We're going to be okay.

Wow. You're right. What a sucky day, but what a great position to be in. Well, you know, the past two years have been absolutely awful. You know, you're paying off the debts. You have to pay no to all the fun things that you want to do. And the Lord tells us in 2 Timothy that if you live that life of Christ, you're going to be persecuted.

You're going to suffer. And I had thought that that verse was talking about those past two years. I didn't know it was going to be preparing us for what's coming. Wow. In this world, you will have trouble. Wow. You will. You will. And, you know, God's going to bless you for it.

So we paid off $97,000. We did it in two years. Good for you. And we pushed it through, and we thought that we were going to be having all sorts of fun afterwards. Well, you are. You are. This email is not the definition. It's a bump. So what do you make before you get laid off? So I currently make around $70,000. Well, you do. And the backup, I'm an educator.

I'm a health care educator. Okay. All right. So I work in health care. I've got a great backup job. Oh, yeah. My wife's got a side gig, so we'll be able to focus on that. And you are?

The side gig that she picked up while we were getting out of debt has actually taken off. Wow. And they laid you off effective when? The end of the year. End of the year. And the severance package is yet to be determined? Severance yet to be determined? Say that again?

Severance is yet to be determined? Yes. Okay. But this is a company I've been with for 10 years. If you'd asked me a week ago, I would have told you I have the most secure job there is because people are always going to get hurt, and so people are always going to need to be trained in health care. But I don't know if you know this, Dave.

There's a bit of an issue with health care right now. I heard the rumor. But we're're gonna be okay and so if there's any listeners out there that are on the fence or they're you know like you were just kind of saying with how long you know i want to just get it together how long is this going to take me just do it just rip the band-aid off you got to get out of debt because you don't know what's around the corner wow you've got no clue wow well here's what's going to happen in your situation i'm gonna be i'm gonna predict it okay you got three months four months to fit

three months to figure this out before it comes and you're going to get severance so you'll have something lined up the day you walk out your severance package is going to be a signing bonus into your next gig yeah yeah this is going to be a blessing financially. It is. You know, it's interesting to read this email because I'm not scared. I'm not scared of what most people would assume is, you know, the end of the world. To me, it's God showing me I need you somewhere else.

Yeah. I would imagine there's some people up and down your hallway that are scared. They may need you to pray for them today. Yeah, absolutely. Yeah. I would imagine there's some people up and down your hallway that are scared. They may need you to pray for them today. Yeah, absolutely. Yeah. I'm sorry. I'm sorry. I'm sorry to face this. A two-year-old and a one-year-old and a wife at home.

Wow. And we would all be terrified. But we're going to be okay, Dave. You are going to be okay. You're a smart man. And I predict you're actually going to end up prospering as a result. I think you'll end up with more money. That's the weird thing out of it.

But today, we don't know that for sure. I just see it a lot. And it's just when you don't have to have a job, it's when you get the best one. You know? But when you're desperate, you interview weird. You know? It's like you're not a very good interviewer.

But when you don't have to have a job and you don't have to, man, you're in the driver's seat. Well, I'm sorry you're having this day. Thank you for calling in and letting folks know it's important and it changes your life when life happens and you're ready. Got to have an umbrella. It's going to rain, right, man? Wow. God bless you, Logan.

Thank you for sharing that. That's powerful stuff. 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? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accredited organization CHM members share to pay each other's medical bills.

It's not insurance. It's Christians financially and spiritually supporting each other. 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 Thanks for joining us, America.

We're glad you are here. Open phones at 888-825-5225. Kim is with us in Sacramento. Hi, Kim. How are you? Great. Thank you so much for taking my call. I'm just so grateful to be able to talk to you today.

You too. How can I help? I'm just wondering, is it too late for us to save for retirement? I'm in my early 40s. My husband's in our late 40s. And we have six little ones that we've adopted. And I'm trying to do the budget kind of on my own. My husband's not really interested, but I just see all of our money going every month, and I'm trying to save, you know, pay off all of our debt and everything. But, you know, it's kind of hard to, as you say, dig a hole out when someone's digging out the bottom on you. And I just wonder, am I too old to save for our retirement? You know, is it too late for us is kind of how I'm feeling.

Yeah, you're not going to make it. Thanks. Yeah, you're an old woman. I mean, my gosh, you're 40 years old. It's hard to believe. I don't know how you're getting around. Oh, my goodness an old woman. I mean, my gosh, you're 40 years old. It's hard to believe. I don't know how you're getting around. Oh, my goodness. Some days.

Unbelievable. Yeah, you can make it, but I think you've identified what's required for you to make it. And what's required is a husband's participation, which means you're going to have to smack him around until he gets it. I tried. husband's participation which means you're gonna have to smack him around till he gets it i told him all i want for christmas because my birthday's right after christmas and he's like what do you want i said all i want is dave ramsey financial peace all i want and he just hymned and awed and i he kept asking me what do you want i said i already told you and finally he gave me a card on my birthday and said okay we, we can go to that stupid class. But then, you know, whenever I try to nail him down on it. Yeah, you need to make this a marital crisis

because you're sitting around with four kids worrying about your debt and worrying about whether you're going to be able to retire with dignity because he's being a butt. So you need to make this a marital crisis. You need to say, look, I'm not okay with this anymore. It's not okay. It's not okay that you're ignoring me and disrespecting my wish that we work on this, that we do adult things like plan for our future and feed these kids well

and get our financial house in order, and I don't want to be the only grown-up here. I tell him he gets frustrated. He's like, I go to work every day. Why don't I have Monday? And I said, I know. We could take that. Poor little boy. Tell him to be a man.

Tell him you need a man. You don't need a boy. I'm serious. You're going to have to do that. You're going to have to get this. That's the deal here. And so, no, you cannot address the marital. I mean, you cannot address the retirement issue until you guys get on the same team

and get your debt cleaned up and get your emergency fund in place and start thinking about how you're going to take care of these four kids that you've adopted college. And then you can address retirement as a part of all of that. And we'll show you how to do every bit of it in Financial Peace University. And, you know, you need to get a little boy child lined up and get him going to class here because you feel like you're the only adult in the class, I mean, in the house, and you're sitting around with these babies all day long worrying

while he goes to work and thinks that that's enough. It's not enough not not while you don't have a plan and not while you don't know what's going on so you know he's you're gonna have to you guys are gonna have to work on that part of the issue and until you do you cannot do this by yourself it won't work and so um know, until you're willing to take action and he's willing to take action, you're going to be a crisis looking for a place to happen. But once you decide to, then you can make it.

Jens is with us in Sarasota. Hi, Jens, how are you? Good, Dave. It's an honor to speak to you. You too. What's up? So this question is in regards to my mom. She's in her early 60s. She just sold her house and has about $250,000 that she'll get from the sale of that.

She's never been good with managing her money. And so my question is, does she look to rent, to buy a home? She needs a car. She needs a few things. What are some recommendations I could tell to her? And she's also looking for a home in California where it could be a little bit more pricey. Why did she sell her home? My dad passed away a couple years ago, so the house they shared was in an area that she didn't really like, I guess to say so. It was a little bit bigger home, so she kind of wanted to size down. Okay, but she has no money except this money. That's correct, yes, sir.

Okay. She gets about $2,000 a month for my dad's pension and her Social Security. I don't know if you can help her unless you can get through to her how bad this situation is. She feels like she's rich and can do anything she wants to do, and she's not. Yeah, exactly. She's not rich, especially if she's talking about California. So I would recommend she not live in California. I would recommend she go somewhere where she can buy a $200,000 home for cash or a $150,000 condo or whatever for cash

and have no house payment in her later years. She's got the $2,000 income then and pay cash for a little car of some kind and stay away from debt. And she's not really got an emergency fund. I mean, she'll have a little bit of an emergency fund. She's not really got a nest egg then to live on. And so this is a dire situation. If she goes through this money, she's going to be, you know, really up a creek. If she doesn't do something wise with this money, like pay cash for some kind of little house somewhere.

But I mean, $150,000 houses don't happen in California very often. So I don't know what part of California. But I mean, that's not something that's very realistic there. So my guess is she's probably not living there, unless she's going to be unwise. But you're asking me for my recommendation. Brad is with us in Indiana. Hi, Brad. How are you?

Hello, Mr. Ramsey. A pleasure and honor to speak with you. You too. What's up? Well, I just had a question to find out your thoughts and opinion on, I guess, a plan. I've been listening to you for a long time and following your processes. And about a year ago, I ended up receiving a very large settlement from a lawsuit and wasn't sure it was ever going to happen, but it did. And I was able to pay off all the debts debt-free.

Wow. I have plenty of reserve. And everything's paid off except the house. And we, you know, talking with a Christian financial advisor, we decided not to pay off the house, but instead, you know, in addition to the benefits of having tax and everything, but also the difference between what we would get between investing as opposed to the interest rate on the house, that we could invest that, make an income off that, then when I'm really ready to retire in three years, then go ahead and pay the house off at that time.

Well, that's stupid. Why would somebody call a Christian financial advisor give you that advice? The difference, because it would be better, Stuart, would make about 3% by investing the money until for the next three years. You would invest the money at 3%? No, no. The mortgage is 4%, could expect a reasonable return of 7%. So for the next three years, we can make 3% over three years. Does no one in this equation understand that you took risk?

You can't compare risk investment with no risk investment. Apples to apples. That's totally unsophisticated. This guy doesn't know what he's doing you need to get away from him no i would write a check today and pay off my house let me ask you this would you if your house was paid for would you go borrow on it to invest no why it's the same thing okay it's exactly the same thing. Okay. And you know what I did by asking you that question?

I made you think not only with your head but with your heart. When I said borrow on a paid-for house, you went gulp. You know why you went gulp? Because you sensed the risk then. But in all this supposedly sophisticated analysis that this idiot did with you guys, he left out risk. So, no, the borrower is slave to the lender. There's nowhere in scripture. It says borrow all you can and invest and make the difference. Nowhere in scripture. So Christian financial counsel, like a Bible? No, not in there, dude. I'd pay off my house today. This is the Dave Ramsey Show. Our question of the day comes from Blinds.com.

Their 100% satisfaction guarantee means even if you mismeasure, you pick the wrong color, they make your blinds for free over again. You screw up, they cover it. That's pretty cool. Blinds.com, you get free samples, free shipping, and with the new promos they run every month, you save money. They're the number one seller of blinds on the Internet. It's pretty cool.

They're a great American success story. We love these guys. Use the promo code RAMSEY when you go to blinds.com and you get a better deal. Laura's in California. I have a savings account for my 2-year-old son that has a little less than $5,000 in it. Half of that is in gold. I intend to save for college separately and give him this afterward to help him get started. Is there a better place to put this than a traditional savings account? Should I invest in a mutual fund? Well, you should not invest in gold. Gold is a very dangerous, very volatile investment.

I do not have any money invested in gold, and I strongly recommend you don't. If you look at the track record on gold, it would scare you to death. So I would put it all in a traditional savings account. If he's not going to use it for many, many years, any of this money, you could move it into a conservative mutual fund if you want.

I don't know what the use of this money is for. And whatever you're going to use it for is going to tell you more what to do with it. But it sounds like maybe this is the money for his car or for something else because you've got college covered. And or it'll be even for some use after college. So you could move it into a mutual fund now if you wanted to, and then, you know, when he hits teenage years, pull it out and let him continue to add to it over the years so that he gets a better car if you want to.

That's how we did with our kids' miscellaneous savings. They saved up and paid cash for their cars. We matched them. We had 401 Dave. And so whatever they put in, we matched it. We were able to do that. And that gave them a super incentive to save like crazy toward their car. But the way we jump-started that savings account was just all those miscellaneous little dollar, you know,

little odds and ends, birthday gifts and stuff that they didn't need to buy something with right then. We just threw it in there. And it built up to quite a substantial sum over the years in most cases. Not $40,000 or $50,000, but it built up. And you're doing this young enough with $5,000 in there. It wouldn't hurt to move it into a mutual fund for 10 years uh wouldn't hurt at all and just check with one of the smart vestor pros and they can help you do that click smart vestor at davramsey.com aaron is in grand rapids michigan hi aaron how are you i'm good how are you dave better than i deserve what's up so my question is, I just got engaged in August of this year.

Congratulations. Thank you very much. And I started your Baby Steps in May. I am currently on Baby Step 2. I have about $12,000 in debt. I paid off $3,000 of it in credit cards. But my main question is, where does saving for a wedding go when I'm trying to pay off debt as well? My fiance isn't on board with the baby steps either.

Well, you're paying for the wedding then. Well, we're both paying for the wedding. I'm putting about $600 in every two weeks, and then she's putting about $400 in every two weeks. Okay. And when do you plan to get married? May 19th of next year. So you're saving about $2,000 a month, so you're going to have about $20,000. Does that sound right?

Yeah. Okay. We were saying $15,000 for the wedding and then $5,000 for the honeymoon. Okay. All right. And what is your income and what is her income? She makes about $21,000 a year, and then I make $41,000. Okay. And you're saving a combined $2,000 a month towards the wedding out of $60,000.

It's a pretty expensive wedding given that you have debt. Does she have debt? She does. She has student loans. How much? She has about $7,000 in student loans, community college. Okay. All right.

Well, you know, I think you've got your budget for the wedding. You've got your plan laid out before you called me. I don't know why you need me. I was just, I wasn't sure if I should put the baby steps on hold and just save for the wedding so we could get it all saved and paid for in like six months instead of the nine months. Or if I should just throw it all at the debt and then kind of, I think you do. I think you do the plan you're doing.

I like your plan. I just keep saving every week for the wedding, and then above that, out of your budget, just throw as much as you can in addition to that towards the debt. You should be able to make both happen by May. You don't think that $20,000 is too much for the wedding? I do. I do think it's too much for the wedding.

You do think it's too much? Yeah, given that both of you were in debt but if you didn't have any debt at all and you want to spend that with a house with what will become a household income of 60 it's not the end of the world but uh if it means that you're not going to be debt free by then yeah then it's too much so um okay uh you know it's right on the border i mean i think you can probably do both um and so if you wanted to not both of you knock Okay. Okay. half your annual income on a wedding um and um that you know so 30k would be your all's limit okay and so that's what i mean by your given that you're broke this is not this is uh and you're having to save really tough to pull this off that's a lot to spend on a wedding but it's not

the end of the world as long as you pay cash for it and you're debt free by the time you get there so really what between the two of you you need need to pay off about $20,000 in debt, and you need to save about $20,000. So you need about $40,000 out of your $60,000 in less than 12 months. That's going to be hard to do. Yeah, I'm on the beans and rice. I don't go out to eat. I donate plasma, and that's my gas money.

So I'm pretty intense on trying to save as much as I can. Yeah. Okay. I would pay off the debts first and then save for the wedding because I think you can pull off a nice wedding, maybe not quite the budget that you have. After both of you are debt-free, you can save like crazy with the same intensity that you're doing right now.

Now, you mentioned something earlier that's a problem, though, okay? What? My fianc fiance's not on board. Yeah, she gets overwhelmed easy, I guess you could say. So she's really focused on saving for the wedding. So when I mentioned saving to pay off my debt, she's like, well, you could be putting more towards the wedding. And she just gets overwhelmed if I ask her to put any towards the debt. Because I know you say when you're not married, I have my debt and she has her debt. Is that correct? Yes.

So, you know. She's not overwhelmed. She's not overwhelmed at all. She's just having a temper fit because she wants the wedding more than she wants to be out of debt. That's not overwhelmed. That's just I a temper fit because she wants the wedding more than she wants to be out of debt. That's not overwhelming. That's just I don't agree. That's all that is. So here's your deal, dude.

Number one cause of divorce in North America today, number one cause of marital discord, arguments over money. You're already on separate pages, and you're not even married so you guys need to solve that you need to go see your pastor and get in some pre-marriage counseling and you need to get on the same page with money you don't have to be on my page and do whatever you want to do i think my page is the best page obviously and the stuff you're doing i agree with i disagree with what she's doing but i don't care what it is the fact that you're in disagreement and you're doing, I agree with and I disagree with what she's doing. But I don't care what it is. The fact that you're in disagreement and you're headed towards a wedding is a bad thing because this is not going to get this disagreement that you're having now is going to continue the rest of your life. Every time she wants a car, she wants to go on vacation.

She wants to read by a couch for the living room. You're going to have this disagreement. And you guys have to have some processes and some values about handling money that you're in agreement on or you're going to have a problem and uh she's not overwhelmed that's the wrong word to use she just doesn't agree and uh it's not a weakness overwhelmed as i'm weak and i can't handle what's being thrown at me um she's not overwhelmed she just made different choice and she doesn't agree. That's all it is. So you guys really need to work on that together and get on the same page.

This is going to be a bad thing for your marriage later if you don't solve it before you're married. If it's the number one cause of divorce, it's something you want to deal with. Believe me. You don't want to go into marriage not having dealt with the number one problem, uh bad idea so let's get on the same page that's very very important and then you can make these other decisions from this point forward this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.