The Ramsey Show - App - Debt Consolidation Doesn't Fix the Problem (Hour 1)

Episode Date: December 28, 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. This is your show, America. Thank you for joining us. We're glad you're here. Open phones at 888-825-5225. Lee starts off this hour in British Columbia.

Hi, Lee. How are you? Hi. I'm doing okay. Good. It's Leah. Leah. I'm sorry.

How can I help? Well, I'm just always behind on something, and I'm just trying to figure out how I can make this work better. Okay. Well, what is your household income? It's just under $1,800 a month. Okay. And do you have debt? I do.

Okay. How much? Not counting your house. Let's see. 14, 18, 19, 22, about $2,300 there. Plus I've got some payments I'm making, which add up to $400 a month. Now, how much debt do you owe total, not payments? Oh, okay.

Okay. So, probably... Like you owe on your car? No. Okay. Do you have a student loan? No. Okay. What kind of debt do you have a student loan no okay what kind of debt do you have credit card i have an old credit card debt that's in collections okay about 1500 there okay

and um about 2000 there that's $3,500. $4,000. About $4,500. Okay. All right. All right. Well, what are you behind on? What is it you seem to be behind on?

Well, there are some debts, like taxes, day daycare and a few personal things that i'm not making any payments on at all and as far as just ongoing stuff like you know phone and utilities um you know i'm i'm catching up on one thing and getting behind on another. Okay. It may be as simple as you need to do a detailed budget. Okay? And you need to do a zero-based budget. A zero-based budget is this. You take the income that you have coming in for this coming month, and you take the actual bills and things that you need to do with money this coming month, not a generic template, but this month, what's actually there that you need to pay on, okay?

And we start with food. You pay food first, okay? So what are you going to spend on food? You write that number down, okay? What am I going to spend on lights and water? Utilities are next, and you put that down. And what's my rent? I'm going to put that down.

And, you know, what have I got to do? So it's food, shelter, clothing, transportation, utilities. Necessities are first. Okay? You work your way down through those. Then once you've given every one of those dollars a name, how much is left? And then you begin to use that money to work on some of these other issues that you've got, and you work your way right down the list.

But if you've got $1,800 coming in in a month, every one of those dollars needs a written assignment, a written name, totaling $1,800 because that's all you've got. You would never intentionally get behind on your utilities. That means you're paying something out of order. You would never be short on food. That means you're paying something out of order. You have the money to pay those two things.

How much is your rent? $750. Okay. You should never be late on that. You should be able to pay that and eat and pay your lights and water before you do anything else. And then you begin to run out of money as you go down that list. And nobody has enough to do everything they'd love to do. It doesn't matter how big your income is. So you just keep going down that list, and nobody has enough to do everything they'd love to do. It doesn't matter how big your income is, so you just keep going down that list.

Now, so when you do a detailed written budget on paper, on purpose, a zero-based budget like that, before the month begins, you're going to feel like you've got a raise because right now you feel out of control, and every single bill you have feels like a strain. And what I'd rather do is say there's some bills that are a strain and some that just aren't because of prioritization. And that will help you move the needle. The second thing is this. You don't make a lot of money.

And that's not a thing that's a shaming thing. It's a mathematical fact. I mean, $1,800 a month is $20,000 a year. That's, you know, that is no picnic to make it on that. So I'm going to begin to work on my career. On the short term, I'm going to look for extra work to create extra money. I mean, you can deliver pizzas in addition to what you're doing and make another $1,500 a month. You can do dog walking and babysitting, and I don't care what you do. You can make another and make another 1500 a month you can do dog

walking and babysitting and i don't care what you do make another 1500 a month you could double your income on using part-time jobs but that's not the long-term answer you don't want to do that your whole life so what have i got to do with my career what am i going to do to make more money what am i going to make 40 000 or 60 000 or 80 000 and what classes have i got to take what mentorship program or apprenticeship program have i got to get engaged in? And we need to start dreaming again because, you know, part of the problem is you have a very low income. And it can be done with that, but it's not easy.

And that's what has the not being organized and not being intentional with every dollar is part of the problem. Part of the problem is there's just not a lot there to work with. So let's work on all of that. And I think you'll see some things turn around when you do that. Amanda's with us in Washington, D.C. Hi, Amanda. How are you?

I'm doing well. How are you? Better than I deserve. What's up? I'm calling because I'm a grad student and currently right now I'm having an issue really just with my parents because I know what I want to do, but I want to know if it makes sense. They're saying that I should just focus on filmmaking because that's my passion, but also a passion that I have is being a pediatrician and also taking over their office

and expanding it to being a better business because I like the business side of medicine in addition to my hobby of filmmaking. So what I want to know is am I able to do both or does it make sense to do both? Because I don't only want to be a filmmaker, I also want to make sure the business goes into a positive place in the next generation.

I want to build generational wealth. But I also don't want to have sure the business goes into a positive place in the next generation. I want to build generational wealth. But I also don't want to have to give up filmmaking, which they think you have to do one or the other versus doing both. They think that I'm scatterbrained, but I feel like I'm clear. Who's they? I would love your opinion. Who's they? My parents.

My parents. Okay. Well, I mean, I think you decide what your primary career to earn money is going to be. It sounds like the medicine thing is the direction you're going on that, if I heard you right. And you're willing to say, hey, I'm passionate about filmmaking, but I'm going to do that as a hobby slash secondary career, but not the thing I try to eat with. Yes, exactly. I don't know why you can not do that. I mean, most people have multiple things they care deeply about. I care deeply about my church,

but I don't make my career there. I care deeply about other things that I don't make my career there. And I invest in those things. I want to see them move. I'm passionate about it. There's all kinds of different things you can do there. But, yeah, it sounds like that that's what you're doing. But I don't know that you necessarily need to go get a Ph.D. in filmmaking while you're becoming a pediatrician.

That is a little bit scatterbrained. So just decide where it is you're going to go get your career from, and that's where you finish your education. Did you know that if you combine the data breaches that have occurred in the past 12 months, almost every American has had their personal info compromised or hacked. Over 50% of our listeners and viewers tell us that they or someone in their family has been a victim. And 70% of those folks have had it happen more than once.

See, this is unbelievable. Once thieves get your info, the risk never goes away and they can use it whenever and however they choose. It truly has become an issue of not if, but when. That's why the only plan I've ever recommended is through Zander Insurance. I actually sat down with them, and we put together a plan that I felt provided the best protection, but didn't waste dollars on things you could easily do yourself or were just gimmicks. The key is getting protected before you're a victim, and it's too late.

Go to Zander.com or call 800-356-4282. We are all at risk, and it doesn't make sense to wait. Numbers don't lie. That's Zander.com or 800-356-4282. Thank you for joining us, America. This is the Dave Ramsey Show. We're glad you're here. Open phones at 888-825-5225. Our question of the day comes from blinds.com.

They have a 100% satisfaction guarantee, which means if you screw up, if you mismeasure, you pick the wrong color, they will remake your window blinds for free. You get free samples, free shipping, and with the new promos every month, you save money. Use the promo code RAMSEY. Blinds.com.edith is in oklahoma i recently got an offer to settle a 7700 credit card bill for 2300 my credit score isn't great but i would love to have this paid off should i accept this offer if so what steps do i need to take well meredith we recommend that if you i'm assuming if they are making you an offer it's because you have not paid them when you're current with all your bills and your credit cards are paid

up and are paid on time they don't call you up and offer twenty three hundred dollars to settle a seventy seven hundred dollar card so i'm assuming you're behind you're in default with them so i can also assume then that you're broke, that you don't have any money. If you have $7,700 and you owe $7,700, you should pay $7,700. If you're broke and you have no money and they offer you a deal and you can scrape together the money to cover the deal, they made an offer, you made an acceptance, morally you're okay. What you should do is you should get that in writing,

and you should not give them electronic access to your checking account because they will misuse it more times than not. Misuse the access, meaning take money out of your account that wasn't agreed to because that's what they wanted all along was access to your account. So it's a wonderful deal. If you can scrape up the $2,300, if you're broke and can't pay the bill otherwise, it will damage your credit because you're not paying a bill as agreed. Anytime you don't pay a bill as agreed, anytime you don't pay a debt as agreed,

it hurts your credit. But so what? If you're through borrowing money, wrap it up. Let's get all your debts paid off. Let's work our way out of debt completely. Have no debt. Don't worry about your credit score in that case because you're not borrowing money. The only thing you need a credit score for is to borrow money. So if you're not borrowing money, then you don't have to worry about your credit score. Now, I wouldn't set out to intentionally damage my credit score, but I wouldn't avoid a $5,000 discount when you're broke and they got you

on the ropes and they're punching you and life is kicking you in the kneecap. I wouldn't avoid a $5,000 discount for worrying about my credit score. Again, if you're broke, and that's the guess that we have here, and that's why you should do that. So, yeah, I would accept the offer and I would get it in writing and I would either send them a cashier's check or open up another checking account or have a prepaid card that you put that amount 2300 on the card and then give them that card number. You can do that. Then you cut the card up, never use it again. A debt prepaid debit card, that kind of a thing.

But do not give them electronic access to your checking account. It has to be in writing, no electronic access to your checking account, and it would only settle debts when I am broke. That simple. Amanda is in Tampa, Florida. Hi, Amanda. Welcome to the Dave Ramsey Show. Hi, Dave.

Thanks so much for having me. Sure. What's up? Okay. So basically what I'm calling for is I am currently, I'm 27 years old. I'm out of debt and I'm making about $42,000 a year. And I am about to be out of a lease of a house that we were renting with a best friend of mine.

And they just got married and they're going off to buy their house, which is awesome. So I'm trying to figure out, I've been going back and forth for a couple years on whether or not I could buy a house on my own and it's just nerve-wracking I'm trying to see if that's the best bet for my next step for myself. If I'm hearing you right you're debt-free you have your emergency fund and you have a down payment. I have a very small down payment which is where I'm kind of kind of set back and kind of worried about that but yes I have a I have a very small down payment, which is where I'm kind of set back and kind of worried about that. But, yes, I have an emergency fund, a starter. Well, yeah, a decent emergency fund, and I'm debt-free.

How much is in your emergency fund? Five grand. Okay. That's a little small. Yes, but I do not have a car payment. You should have three to six months of expenses set aside in the emergency fund. I doubt you can make it three months on five grand. You might.

You might, but that's a little slim. And then how much of a down payment do you have saved? Five grand. In addition to that five? Ten grand all day. Okay. That's correct. Good, good.

Okay. And you're 27 and you make $42,000 a year. Correct. Okay. Well, to start with, we you make $42,000 a year. Correct. Okay. Well, to start with, we tell folks three things about buying a home. Number one, be out of debt. You're there. Number two, have your emergency fund. You're there. Number three, never buy more than a 15-year fixed-rate mortgage

where the payment is more than a fourth of your take-home pay. Okay? And that's going to be pretty limiting with the numbers you're giving me in Tampa, Florida. Right. And how much house you could actually buy reasonably. That's a conservative way to buy a house, and that keeps you from getting into trouble. Are you in a relationship of any kind um i'm dating right now but i'm not married or anything like that okay seriously or just

casually uh seriously okay all right um i would probably rent for a year then for for for two reasons one is i'd love for you to have a little bit more room in your down payment world and you're you know we're a little tight you've done a really good job by the way to be a hundred percent debt free and have 10 grand saved at 27 with a 42 000 income excellent job that you did not do that easily that was really concentrating, focusing. You've been very responsible, very mature. Well done. Very well done. Another year of that would probably turn that into $15,000, maybe even more $1,000 in your account.

And we'll see where this relationship goes by then. Right. Okay. And that might change the house that you would buy or when you would buy a house or where you would buy a house and so on. Right. And so I'm not saying you can't buy a house if you're a single lady. If you told me you weren't in a relationship, you weren't dating, you know, hey, go ahead and start looking for maybe a nice little condo and get you a starter place, right? That'd be fine. But I'd hate for you to do that this year and then in two years be wanting to sell it or a year and a half be wanting to sell it because now you've got a combined household income of X

because you got married. Right. And it changed the whole dynamic then. I mean, like double the house, right? Right. And so, you know, I'd rather you not buy if that were to happen. You're in a transitionary phase of life, and so I'm just trying to gauge that with you.

It's okay to go by. It's okay to go by. But the downside is that you're a little tight on the funds, and with 15% of your take-home pay on a 15-year is not going to be a very big place. You might want to go look at some places that fit that and see if that grosses you out you know you go like i don't think so i'm gonna rent for a little while you know you might do that or you might go hey that's a cute little place let's do it and then if then if it works out

with the with the young man later on and it gets serious or whatever the well we'll just sell the cute little place you could do that There's nothing wrong with that. But, you know, I don't think you're going to lose huge financial ground by renting for one more year. Get you some new roommates, rent for a year, and then see where you are. Meantime, pile up a little more money, see where this other thing goes. It might change your decision at that point. Neither one of those are under the stupid column.

If you follow the guidelines I gave you on the purchase, you'll be okay. But if you rented for one year to see how it works out and then bought as a single young lady because this doesn't work out with the young man, then that's fine. Either one of those is fine. I don't want you to be a renter for the rest of your life, and I don't want you to rush into buying. And those are the two things I'm after. So it's not like 100% of the time it's always smarter to buy.

No, it's not. There's sometimes that you're in the middle of a transition, and it's not smart to buy, you know. And so I'm okay either way, but that's kind of my warnings on either direction that you should go. Good question. And very well done again. Very proud of you.

Good job. Good job. You really have done a great job with your money. Really impressive. This is the Dave Ramsey Show. Thank you. 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 Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs.

Christian Healthcare 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. In the lobby of Ramsey Solutions, Mark and Angela are with us.

Hey, guys, how are you? Good. Excited. Welcome, welcome. Now, where are you guys from? All the way from Ramstein, Germany. Germany? Yes, sir.

That may be the longest-traveled one in a long time. I think we've had Australia. We've had a couple of others. But you Yes, sir. That may be the longest traveled one in a long time. I think we've had Australia. We've had a couple of others. But you guys, that's a bunch. Well done. So I'm guessing military. Yes, sir. Cool.

Which branch? U.S. Air Force. Okay. Well, thank you for your service. Thank you. How long have you served? About to hit 20 years. Oh, wow.

Amazing. So how much debt have you two guys paid off? $97,000. Wow. How long did that take? 18 months. Good for you. And your range of income during that time? About $90,000 to about $120,000. Okay. Cool. Cool.

And so, Mark, you're in the Air Force. It's you, right? Yes, sir. Okay. And what is your job in the Air Force? What do you do? I'm the commandant of a leadership school. Okay. Wow. Look at this. And what do you job in the Air Force? What do you do? I'm the commandant of a leadership school. Okay. Wow. Look at this. And what do you do, Angela?

I'm a stay-at-home mom. I homeschool my kids. Very. And I'm a photographer on the side. Oh, neat. So how long have you guys been in Germany? How long have you been stationed there? 14 years.

Wow. Yes. Okay. So your German must be decent. All right. Not too bad. Okay. Good.

Very good. Cool. I imagine the kids picked it up. A little bit. For sure. Well, good. All right. Not too bad. Okay. Good. Very good. Cool. I imagine the kids picked it up. A little bit. For sure. Yeah. Well, good. Very cool. So what kind of debt was the $97,000? Oh, everything you can possibly imagine. So we had a brand new Honda Odyssey, a $30,000 signature loan that was a debt consolidation, and then credit cards that we racked up right after the debt consolidation again, and a $10,000 Ford that we had as well. So the debt consolidation didn't fix it. It did not.

It just kept growing. So tell me what happened 18 months ago. So 18 months ago, we were in Amsterdam and we were hit by a streetcar. No. Yes, sir. And so when I married my wife, she owned a house, a car, and she had her own business. And 15 years later, I had walked her into about $97,000 worth of debt. And so we were on a vacation at the time that we couldn't afford, obviously.

I pulled the car forward a little bit too far onto the train tracks. The driver was distracted of the street train, and she plowed into the car. Wow. And so we were all safe. God used that as a really big moment in our life. Every kid in the family and my wife and I, all 10 fingers and toes were great, but the car was destroyed.

And we had been looking for a long time to get debt free. And every year we'd made a New Year's resolution that this would be the year. And she had pretty much given up hope that it was ever gonna happen. And at that moment while we were in Amsterdam, we had no money to get our family home. It literally took our last dollar. And so I was standing right at the rental car

counter and the price was in Euro. And I knew how much was in my account. I was moving every penny I had. And I was afraid that the Euro conversion rate was going to be more than the money that I actually had in the bank. And so they're waiting by the rental car to get the van. And I'm sitting there swiping the card, like terrified that it's going to decline and we're going to be stranded in Amsterdam. But it went through and God is amazing. He got us home. But that was a really big deal. And that changed everything in our life. Yeah, it snapped. You said never again. Never again. Never is my family going to be this exposed. Yes, sir. Yeah. Wow. So which car? Was that the Odyssey? It was. And it totaled it? No. Oh, darn.

We wish. Darn. That would have helped. Yes, sir. Because that's an expensive car. It's like a $30,000 car, right? We own it now. Yes.

Oh, now you own it. You fixed it, and now you own it. You paid it off. Okay. Yes, sir. Wow. So that's a big wake-up call. So then you come home, and you say, okay, enough's enough.

We're going to change. Then what happened? So we started to do the budget. I'd been listening to you for probably three months at the time, but I didn't really have the commitment that I needed. So that snapped in me, and I was convinced. But it took about three or four months to get her on board and for her to realize that it was really different this time and that it wasn't just me saying for the last 10 years that this is going to be the year. And so the day that I knew that she was on board

and that we were actually going to make this happen, she had a yard sale and I came downstairs outside to see how it was going and she had sold all the kids' bikes. Whoa. And so I knew she was really intense at that moment. And from there, Dave, she's worked so hard. She has a photography business.

She works until two o'clock in the morning. Most days, She homeschools all four kids. We're literally here because of all the hard work that she did. So when she got committed, she wasn't going to be stopped. He had told me for a long time that this was our year to be debt-free for a long time. We had some stocks that were waiting to go up, that that was what was going to get us out. We kept saying this was going to happen or this business idea was going to take us. And I didn't believe him anymore. And so when he decided to do, he read the total money makeover and I didn't want to

hear it because I didn't believe it. So I said, if we're going to do it, it has to be this year because I'm not letting another year go by. It has to be this year. So we made our last payment today. All right. Very cool. Well, congratulations, you guys.

What do you tell people the key to getting out of debt is? You did it. $97,018 months. You first. You have to be sick of it. You have to be ready to do whatever it takes to just get it out and be done. Amen. And the envelope system really worked for us.

Good. Yeah. Okay. Every dollar has to be deliberate, you know, and we hustled. I mean, we were doing everything we could, you know. You were working extra, selling stuff. Yep. He has a kid's jiu-jitsu class that he was teaching in the evenings.

I was taking any kind of photography jobs that I could make and create. I opened a studio. I mean, anything we could do to make this year happen. And you just have to have that mindset. You have to just say, that's it. We're done. We're done. I've had it.

That's it. And we're so sick of it that we just plowed through. Yeah. You don't care what other people think. You don't care about stuff. You don't care about nothing but getting out. That's right. Yeah.

What about you, Mark? You just have to decide that this is it. And so you don't decide you're going to eat today or that you're going to drink today. Today is the day that you decide you just don't have any more debt. Before this, I would pay the minimum on the credit cards and I would swipe it at the grocery store that month just to feed the family. And the amazing thing is, you know, there's the quote that once you make a decision, the universe conspires to make it happen. And we had been looking for this settlement for like four years. And as soon as we were both on the same page that this was going to happen, God gave that $20,000 to us. And that got our debt snowball going really fast.

Wow. And then our income went up by $900 a month immediately. And then that started going. And we were going to cancel a vacation and some friends of ours paid for it for us. at the end some other friends of ours gave us you know a big gift of cash as well to get us over the finish line and it's just every step of the way i feel like god almost paid off as much of this as we did yeah um but it's getting committed and just decided this is who we are we just don't use credit cards it's it's just who you are you just stop very cool well congratulations we've got a copy of ch Hogan's retire-inspired book. That's the next chapter in your story for you guys to be millionaires

and outrageously generous along the way and all the way from Germany. And you brought the four kids. What are their names and ages? Okay, so Justice is 13 and Kyrie is 11. Then we have Kenzie Grace. She's four and Kaylee is 2. All right. Very cool.

So have they been practicing the debt-free scream? Do they know what this is? Yes, sir. They do. They do. All family tree changing. You know, our two big kids really pulled the weight a lot for us because I was working and homeschooling them

and we wouldn't have been able to do it without their being so great with our younger two kids and helping. My son has made a lot of dinners. So it's a family thing and we talked about it the entire time why we are doing this. Yeah. We're changing our tree today. Very cool, you guys.

Very proud of you. Well, Amsterdam's a nice trip. Nashville's a better trip. And especially when you're here to do a debt-free scream. All right. It's Mark and Angela, Justice, Kyrie, Akinzie, and Kaylee. $97,000 paid off in 18 months, making $90,000 to $120,000 all the way from Germany. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free! Wow. three two one well done wow well done well done great job you guys great job love it man that's how it's done right there man you know what there was so much truth in what they said there the number one key to changing anything les brown the great motivator i used to listen to les brown tapes when i was first getting started then i got to meet less and we became friends he says people change their lives when they finally say, I've had it. Well, that's when you make your marriage better. That's when your kids will start behaving.

That's when you'll get yourself out of debt and start building wealth. That's when you'll lose weight when you say, I've had it. No more. I'm done. That's when it changes. Something happens when you get this visceral scream down inside. Yeah. that's when it changes something happens when you get this visceral scream down inside

this is the Dave Ramsey Show Thank you for joining us, America. You jump in. We'll talk about your life, your money. Alejandro is on Twitter. I'm ready to do a debt free scream how do i sign up to do one well you can just jump on davramsey.com under the radio section and there's a place there for you to get in touch with kelly daniel she's our associate producer and she schedules the debt free screams we do um a maximum of one an hour and you can either a lot of people make the trip here like from germany who thought

that up and or uh sometimes they just jump on the phone and do it but you need to be scheduled either way because they're backed up for many many weeks and so just jump on at daveramsey.com and um you know you can be debt free everything but the house or everything including the house, and you're no longer using debt. Like, if you're still using credit cards, we're not going to put you on the radio. You haven't figured it out yet. So, Kelly's shaking her head in there going, I know the people I talk to. I was out of debt, and I just bought a new car.

Does that count? I'm debt-free debt free no you went back in debt dube you know you kind of missed the point so not you alejandro but the other folks there's some of the other folks anyway go to davramsey.com click on the radio section and there's a place there on the radio page for you to get in touch with kelly and be scheduled to do your debt freefree scream. Guys, I listen to countless stories of how people are either screwing up with money or how they're winning with money, and I have for 30 years. You want to know what the number one correlation we have of all?

Five million people have been through Financial Peace University. You know what the number one correlation of people that win with money is? The number one thing they do. The number one thing they do when they debt-free scream. The number one thing with all the data that we gather. You have five million people doing something. You can tell what's going on, right? The number one thing that causes people to win with money.

You know what it is? Budget. The husband and the wife, if you're married, are on the same page, and they have a plan, and they stick to the plan. They're doing their money on purpose before the month begins. Give every dollar an assignment, every dollar a mission before the month begins. That's why we named the software, the app for your phone that we spent $3 million in two years developing called EveryDollar.

We named it EveryDollar because you need to give every dollar a name. You live more and you worry less. You've got a plan. You've got a game plan. It's completely free. You can put it on your phone, your spouse's phone, put it on your desktop. It all works together. If you want to connect it to your bank, there's a small charge for that

because the bank people charge us. But it's free. Over 3 million people are now using this. It's super easy. You can set up your budget in about 10 minutes, and you can actually follow a budget. Some of you have downloaded the app and are not using it. Hello!

It does no good! What, do you just think you put it on your phone and it's magic? I have an app. Well, do you use it? You actually have to do the freaking budget. That's how it works, people. Christine's with us in Los Angeles. Hi, Christine.

How are you? I'm doing great. Thank you for taking my call. Sure. What's up? So I'm in charge of a chapter of a national nonprofit where I live, and I'm currently looking to bring on a treasurer for our chapter. And I want to make sure that the person I'm bringing in is someone who has an appreciation of the financial principles and values you teach.

Do you have any tips on how I can get that information out of them during the interview process? Yeah, ask them. How do you feel about debt? How do you feel about budgeting? How do you feel about budgeting? How do you feel about thrift and frugality? What part do you think that plays in a nonprofit? I mean, if we get in financial trouble, are we going to go to some savings that we have set back, some retained earnings? Or are you going to suggest we use a line of credit, which would be what a lot of nonprofits do?

See, our family foundation, the Ramsey Family Foundation, we support many ministries around, mainly ministries that we have some kind of personal connection to. But when one of them decides to go into debt, we don't support them anymore because we feel like that's inconsistent scripturally. And we're supposed to be managing God's money. So we just, you know, we're not able to give to them anymore because now they use a line of credit instead of actual good money management. You know why? Because if I'm giving money to a charity, I would like for the charity to be helping the people they're supposed to be helping instead of paying a freaking bank. That's why. You know what I'm saying?

And so just talk to them like that when you're interviewing them. And say, you know, our efficiency of these dollars going to these people is contingent upon how good a job we do managing it. Right? Yes. And just ask them. That's exactly how I would interview them. It's how we interview them, by the way. My daughter Denise is the director of our foundation. And before we give, you know, substantial sums anyway, not small sums, but substantial sums,

she actually does due diligence and sits down with the people that are running the ministry and the charity and see how it's run. And we look at their financials, and she goes just like we're doing in investment. And a lot of foundations are that sophisticated. A lot of people who do large gifts are that sophisticated. They actually look at their giving as an investment on God's behalf. You know what I'm saying? Absolutely.

Now, I think you can bring all of that up in the interview. And I definitely would do that. And I think you're wise to do that by the way because I think it makes your charity more appealing when it actually does the work it's supposed to be doing because it's not wasteful and it is efficient and paying interest with money that was donated to you is wasteful you should be feeding those hungry kids or whatever it is that charity or ministry is supposed to be doing.

So, good question. I love that. Thank you. Mo is with us. Mo is in New York. Hi, Mo. Hi, Dave. How are you?

Better than I deserve. What's up in your world? All right, so I'm going to give you the rundown because you're probably going to ask me anyway. But I finished step one and step two, and I'm pounding out step three. It should be done soon. but the question is like this. I'm supposed to be doing four, five, and six sort of at the same time. Five I'm taking off because it's not applicable right now. Okay.

But I'm supposed to be investing 15%, which I can do as soon as I'm done with three. Good. But my mortgage is like 2.5% of the rate. Do I want to invest more and just pay down over the 30 years, just let it go, or do I want to pound out the house faster? You want to put 15% of your income into retirement, and anything else you can find, you pound out the house. It's not about the interest rate.

It's about the freedom and the risk. When you get that house paid off, dude, you're not going to be going, hey, I can borrow money at 2.5%. I want to go borrow some money. You're going to be going, thank God the house house paid off, dude, you're not going to be going, hey, I can borrow money at two and a half. I want to go borrow some money. You're going to be going, thank God the house is paid off. I heard you do the math with a previous caller, I think yesterday or the day before, about the same question, but his was a higher rate. Doesn't matter. Doesn't matter.

The bottom line is by the time you adjust for risk and taxes on your investments, you're going to end up with down close to a mortgage rate and here's the thing when you don't have a house payment it changes all the decisions you make it changes your relationships it changes everything and it sets you free in places you didn't know you were a captive the borrower truly is slave to the lender yeah i mean mo you can do what you want to do. You're a smart guy. But if you're calling me asking me what I would do, I wouldn't trade being debt-free for any other possible financial decision.

There's nothing I want badly enough. And there's some dreams I'd like to accomplish. There's some things I want to pull off. But there's nothing I want badly enough. And you can't scare me bad enough to get me to go back in debt because that would scare me bad enough to get me to go back in debt because that would scare me beyond my wildest nightmares thank you man appreciate you calling man i've lived so long without that y'all i mean it's been 20 something years now since i've had a dime of debt and it's just i mean american express calls my house you know what it is it's a, I mean, American Express calls my house. You know what it is? It's a wrong number, you know, or somebody soliciting some kind of crap

because we know we don't have any American Express, anything. You know, Discover calls my house. We know it's a wrong number. I got a collections notice the other day. I threw it away because I knew it wasn't me. I'm not even going to call the stupid people. They sent me a collections notice in my mailbox at my house. Unbelievable.

I threw it away like six times, and then I finally opened it, and it was actually an ambulance bill. My wife had had an episode, and we did owe it. They never billed us. They threw it to collections. I actually owed it. But I don't even look at collection notices, because I know it's not me. That one was me. I had to go. I actually owed it. But I don't even look at collection notices because I know it's not me. That one was me.

I had to go pay the $600 bill. But, oh, my gosh. Yeah, yeah. I didn't know. I mean, the ambulance picked her up. We didn't know what it was. It was about a year ago, I guess, something like that. No big deal.

She's all right. Nobody panic. But I don't have any debt. It changes it, you know. I have zero worries. I used to open up the mail and my heart rate would change. Sweat would come out on the palms of my hands and on my upper lip. Y'all know what I'm talking about?

Right above your eyebrows. You know what happens, you know? I open the mail now. I just smile because it's all mutual fund statements. Shut up. 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.