The Ramsey Show - App - Debt-Free and Living With Grandma…What Do I Do Now? (Hour 3)

Episode Date: August 12, 2021

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Thank you very much. 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. Thank you for joining us, America. Rachel Cruz, Ramsey personality, New York Times bestselling author, and my daughter is my co-host.

Open phones at 888-825-5225. Rachel's latest book, Know Yourself, Know Your Money, New York Times bestseller, is all about how you discover why you handle the money the way you do and then what to do about it. See, we've talked for 30 years around here what to do. Now, Rachel's talking to you about why you do some of the things you do that are good and some of them that you do that are bad, right? Yeah, that's right.

But understanding your motivations when it comes to money really explains your habits, why you make the decisions you make, all of that. So it unpacks everything from childhood to tendencies to dreams to fears, all of it. And it's so fascinating. I love this stuff. I mean, I love anything self-discovery because I just think we're complex people. And you can kind of get to the root of things. You're like, that's why I do what I do.

You know, and I think it's always fascinating. So when you can grow and learn from the roots, it will help you in all the things, obviously, that you've taught for 30 years of the how-to. But a lot of this stuff, you've, I mean, you've seen it. Like this book wasn't a shock to you or a surprise. Well, no, but you took, like, you know, I said nerd or free spirit, spender or saver. Yeah. And that's two of the constructs in the entire book.

But there's something about, it's like a Ramsey pastime family thing that we really do enjoy trying to figure out what makes people tick. Why so-and-so is doing what they're doing and how they do that and why and and really so that's why we like assessments that's why we like you know disc and enneagram and strength finders and i took the disc in fifth grade i couldn't even read half the words i was like i don't know what hey we're packing and we're moving we found daniel's your little brothers when he was 12 disc profile disc profile what is it he lied he laughed about it no he laughed Daniels, your little brother's, when he was 12. Disc profile. Disc profile.

What is it? Do you know? He lied. No. He laughed about it. No, he laughed about it because he said, I didn't know what it was. And he said, so I just answered all the questions any old way. And it's like a straight line.

It's like he's nothing. Oh, funny. And so now we do know what he is now. He's a very high D, very high DI. Yeah, a lot like his dad. So, but. That's so funny. Different on the Enneagram, though, way different on the Enneagram. But, yeah, so we've got these great assessments, the Know Yourself Money Assessment that Rachel and our incredible research team have put together.

It's $30 for a couple, $20 for an individual. What it does is it takes 15 minutes to take it, and it spits out 30 pages of personalized results, and it talks about your money classrooms. Talk about the money classrooms for a minute because I think that's insightful. Once you kind of know where you came from, it helps you know how to get where you're going. Yeah, absolutely. Well, there's two ways money was communicated in your home growing up, verbally what was said and then emotionally what it was felt in the home, right, the environment.

And so it creates kind of this quadrant and so that first money classroom is the anxious money classroom and this is if your home was verbally closed so money was not talked about but emotionally stressed so if you grew up in this household it was the feeling like at the end of the month you just felt tension around you didn't you know you didn't really know but oh you just felt it in the air didn't dare bring it up no classroom two is the unstable money classroom this is where it's verbally open it is talked about but it's emotionally stressed so conflict fighting you heard your parents have the same money fight possibly over and over again uh it was there and then classroom three is the unaware money classroom and this is where it's verbally closed it's not talked about but it's emotionally

calm so i always say with this classroom if you grew up you probably were one of the ones that classroom. And this is where it's verbally closed. It's not talked about, but it's emotionally calm. So I always say with this classroom, if you grew up, you probably were one of the ones that left home at like 18, 21. And you thought, I know nothing about money. And oh, it's, oh, it is a big deal. Okay. I got to, I got to figure this out because no one talked about it and it just didn't seem like a big deal. It was just like, that's just what it is. And then classroom four is probably the healthiest. It is the healthiest money classroom. And that's where it's verbally open and emotionally calm. So money is talked about. It's not taboo. You are engaged in conversations from tactical things like what a 401k is to more, you know, emotional things like generosity and contentment and the value money plays in our life, right? Like that was just talked about. But it was also calm because there was a plan probably around money there was a level of yep we know what we're doing

you could have cooperation collaboration between the parents yeah yeah i mean and and in that classroom you don't have to have a million dollars right you can you can you you don't have to be wealthy in that classroom by any means either so so just kind of knowing what i found and all the research when i was writing about this is people either really mirrored what they knew growing up. So if we didn't talk about money, I just won't talk about money either. Like I'll just shut it down. Or people did the exact opposite. So I've heard many people say, yeah, my parents fought all the time about money. So it's not worth it. It's not worth engaging in conversation. It's not worth the fight. We'll just figure it out. And I don't want to go there. Or my parents never talked to us about money.

And you hear someone say, so now I'm like constantly on my kids to be like, you have to learn this stuff. So it's just interesting to see people, again, you either just mirror what you know without realizing it or people just did the exact opposite. But I think that it shapes you in just that's the foundation that's laid that, I mean, any, any therapist would say your household growing up was your classroom to life it's where you learned life's lessons and same with money and so This is where you learned it and you got to figure out what lessons you want to take with you into adulthood What lessons you wish you could probably unlearn? All of it, but it's it's interesting to kind of go back there and say okay, this is it and as well I have this

if you have siblings, ask your siblings what kind of classroom they felt like they grew up in. Because even depending on your personality, you could have a perspective of one classroom and your sibling has another of how they saw things or understood things. Yeah, you were born the year we filed bankruptcy. So when ours was an unstable yeah freaked out losing everything classroom you were too small to to know it your sister was a toddler probably also too small but might have you know distant memories somewhere deep down in her psyche of that but you know so our family went through a shift. Yes, which happened. We went through from, you know, being a meltdown, disastrous mess, me and your mom, up to by the time you were old enough to know, it was pretty calm and organized and methodical because we were already doing this stuff and teaching this stuff.

Right, absolutely. Yep, for sure, for sure. And so, like, you know, you were doing the writing for this, and you said, well, I grew up in a very calm and stable. And we're like, yeah, you just weren't old enough to remember when it wasn't. Yeah, that's all. I know. I had the manuscript, and we had dinner, and I was like, here's what I'm writing about. And I feel like it was classroom four for the most part.

And you're like, yeah, because you were too young to remember classroom two. Unstable. It was crazy. It was crazy. When we were nuts. We can still get there. We can can get there we just don't live there we can drive by now and say hi but that's all oh my gosh yeah this stuff is so valuable though to know where you come from

and you get and then you look at your spouse and you go oh you have a little bit of empathy for them when you know kind of okay that's where's where you came from. Oh, you're more of an abundance versus scarcity, and I'm kind of scarcity. Oh, you're more saver. I'm more spender. Oh. You like to spend on experiences. You like to spend on things. Yeah.

That's Winston's biggest rub. Yep, yep. I want to go to Disney. Rachel is 100% would spend 100% of her money on experiences. I just take vacations all day long. 100%. And what I want to spend on Disney. Eating out has nothing to do with the food.

It's the entertainment. I need an appetizer. It's the entertainment. It's who's going. I need the meal and the dessert and the decaf coffee with the dessert. Life is a party. I need a two and a half hour dinner. When you ask Winston about Rachel, he says, Rachel's a fun girl.

He said, you make me more fun. He just said that to me yesterday. Hey, I'm Christi Wright. Do you struggle to find time to connect with God? Well, I have great news for you. Glorify is an app that makes it easy for you to have a quiet time practice that works for you. In fact, it's the number one daily worship and well-being app trusted by over 1 million Christians. And the great news is the app is free to download.

Just search for Glorify in your app store. You could also access their entire content library at half price by using the promo code Christy. Download the Glorify app today. Rachel Cruz, Ramsey personality. Number one best-selling author, New York Times best-selling author of her last and latest book, not her last book, but her latest book, Know Yourself, Know Your Money, my co-host today.

Open phones at 888-825-5225. Shelly's in Destin, Florida. Hi, Shelly, how are you? Good, how are you? Better than I deserve. What's up? Well, I just need some advice. Me and my husband have been paying off our debt. We're down to one last credit card.

It totals out to be $10,596.90. And we're thinking about borrowing it from the 401K. We don't have much in there. We have around $21,000 in our 401K, and we're just trying to make the best choice. The credit card's at a 24% interest, so I just need some advice. How much was the total of the credit card, did you say? $10,000. $10,596.90. Yeah.

Okay. What's your household income? $51.90. Yeah. Okay. What's your household income? $51. Okay. How long have you been listening to this show? I've heard about you guys through church members, and I just actually signed up for your classes and your apps that you'll have. Yes, I just did that.

I'm just really excited to get out of debt because, I mean, we did cash advances and all kinds of things, and we paid off probably over $100,000 of debt. Yeah. You're tired of the fear and the chaos, aren't you? Yes, I am. And just living from paycheck to paycheck. How about your husband? Not knowing what's going to come next.

My husband, oh, he's so on board with getting out of debt. It stresses him out a lot, you know, just being all that responsibility on him. And so, and plus I want him to be able to retire at a nice age, to enjoy, you know, everything and to line our lives up, you know, biblically with the Bible. That's the most important thing. You guys are sweet people. You're sweet.

Thank you. Well, I'm glad that you're plugged into Ramsey Plus and into Financial Peace University. We'll walk you through. Rachel and I are two of the main teachers in those videos that you're going to go through. And we're going to show you how to get on a budget, which is going to help you get out of the payday advanced stuff. Because that comes from not planning well. When you start doing your budget, you're going to hear us say it again on the videos, but you'll feel like you've got a raise. Because being out of control makes you make wrong decisions.

I've been there, too. I know how it feels. I've done it, too. Okay? Okay. And here's the thing. You're going to be able to pay off the credit card so fast if you follow the stuff that we teach in detail. And both you and your husband are doing it.

That the interest rate's not going to matter much. Okay. Because you're going to pay it off in under a year. Okay. Probably under six months. Because you're not going to do anything except pay off this credit card. We're going to teach you to get so focused on it because you're sick of it. And the great news about where you are, the way you're speaking about this, you're doing it with such an open hand.

And it's almost kind of tender just listening to you that you are you're at the perfect place. You're like, just teach me. Just show me how. I'm just sick of it. I'll do anything. And that's what I keep hearing from you. And so what that tells me, having done this for 30 years, is you're going to have great success in the next 12 months. It's going to blow your mind where you are by next summer. Don't you think, Rachel? Yeah. Well, I was going to say, Shelly, I mean, from how you guys have been living

to what you're about to engage in and actually get a plan. And we said this in an earlier segment, you know, but there'll be changes. You'll do stuff that's different than you've ever done before. And it's going to first feel uncomfortable, but push through that because immediately when you start to live on a budget and it works, you know, you are in control of your money versus your money controlling you. You have a plan.

You and your husband are on the same page. You're working toward the same goal. I mean, all of that is so cohesive when it works. And it's an amazing thing. You will never experience the level of control that you're about to have. And, and yep. And he's exactly right. I'm like, yeah, there's no need to take out a 401k loan at all. Don't do it. Don't do that. Um, when you guys start to do the math and you start to see, okay, here's where our money can go. You're going to, you're going to pay it

off. You're going to be able to do this. Yeah. Interest rate matters if you're going to keep the debt around for five years, but when you're going to keep it around for six months or seven months or whatever you end up with this ten thousand dollars it's not gonna it's not gonna matter much the second thing is you never borrow in any circumstance for all you listeners out there on a 401k here's why you unplug in her case half of your 401k. $10,000 of it is $20,000 that's invested. It's now unplugged from good investments, making 10% or 12% in good mutual funds. And instead, you pay yourself back 5% or 6% or 7% or however it's set up. It's one of those three numbers.

And so you're trading off for a bad rate of return. So it is costing you more than it appears to be costing you. The second thing is when you leave your company, and you will leave your company, you will die, you will get a better job, or you will get fired. One of the three ways you will leave your company, when you leave your company, not if your 401k loan is considered by the IRS an early withdrawal and you have 60 days to completely repay it. Oh, by the way, you just don't have a job anymore, but you have 60 days to repay the loan or it's considered an early withdrawal and you're taxed and penalized on it. So it's a disaster looking for a place to happen. So never borrow on a 401K. Now, that's a sidebar, really, because, Shelly, your story is so much bigger than just the $10,000

because you're going to such really, really, really good places. I'm so proud of you. All right, Dylan is with us in Springfield, Mass. Hey, Dylan, what's up? Hey, how's it going, Dave? Better than I deserve. How can we help, sir? Well, I'm 25. I make about 80 grand a year. I got 420 bucks a month in expenses. I'm currently debt-free minus my 401k loan that you're just talking about. I'm currently living with my grandmother right now. I got $22,000 in savings, and I want to buy a house, but I'm not real sure where to go from here

or what to do with the market the way it is, and all the houses around me are pretty expensive, so I'm just not super sure what to do. Cool. Yeah, that's a great question. How much is your 401k loan? I think there's about 8 left on it.

Okay. Write a check today and pay it off. Okay. And now we've got, not 22, but now we have 14. But you make 80 and you've got no bills because you live with your grandmother, right? So you pile up money pretty fast, can't you? Right, minus

the expenses. I kind of take care of her, too, with groceries and everything else. Yeah. Well, what I would encourage you, Dylan, is to figure out what your expenses are per month and then get an emergency fund of three to six months' worth of that. Have that just cashed in the bank, which, again, that $18,000 is going to help you with the $14,000. That's left in your savings. It will be a good jumpstart if not completed, depending on, again, what your expenses are. And then from there is what we call baby step 3B.

And that is where you're going to save up for a down payment on your home. And you want to save up at least 10% to 20%. And then the formula we always use is that your payment is no more than 25% of your take-home pay on a 15-year fixed rate. Now, that's to say if you want to buy a home, and I don't know your situation, are you single? Yeah. Yeah. Is buying a home something you want to do, or do you want to rent for a little bit? Do you want to stay with your grandmother? Like, what do you want to do? I'd like to buy a house. Okay. one already. I sold a year ago. They built houses right on top of mine. So I sold mine, but I do want a house. Yeah. Yeah. Yeah. So yeah,

when you get to that point that you have that down payment saved up, then I think it's a great time. I mean, you're in a good position, obviously. You're going to be completely debt-free by this afternoon because you're going to write a check and get that taken care of. And you have some good savings. You can save up a little bit more, but that down payment savings will be your next step. Good work, brother. Good work. The question you've got to ask, it sounds like more than anything, is just how long do you need to be there and want to be there to take care of your grandmother in this situation?

And, you know, it's working for now. Is that a three-year plan, a three-month plan, five-year plan? And then that'll help you answer when you're ready to buy. But, yeah, get out of debt, build your emergency fund, and save your down payment like Rachel laid out. That's exactly what we teach. This is the Ramsey Show. Imagine a world where people never have to worry about money ever again. At Ramsey Solutions, our mission is to teach people how to get out of debt and build lasting wealth.

And if that means we have to take on the toxic money culture that says you need debt to get ahead, then we're okay with that. We've seen millions of lives changed, and we will continue to create digital products and services to help people transform their lives. If you want to join our 1,000-member team on this crusade, Continue to create digital products and services to help people transform their lives. If you want to join our 1,000-member team on this crusade, we're currently on the hunt for software engineers with expertise in Ruby on Rails, Java, C Sharp, and front-end technologies. Or if you're a UX designer or an SEO and content marketing specialist,

we'd love to talk with you. Together, we will disrupt the toxic money culture in America. Find out about all the available jobs by texting careers to 33789. Text careers to 33789 to find out about all our open opportunities. in the lobby of ramsey solutions on the debt free stage joshua and anna are with us. Hey guys, how are you? Hi. A lot better now that we see you. Good to have you. Thank you for having us. Well, we're honored to have you. Thank you for being here. And where do you guys live? New Jersey. In Jersey and all the way to Nashville to do a debt-free scream. That's right. How much did you pay off? $70,437 in 10 months. Whoa. And your range of income during that time? It started at $102,000, and it has ended now in $202,000.

All right. What do you guys do for a living? I am an ICU nurse. And I'm an audio tech. All right. Wow. Wonderful. You guys are killing it.

Way to go. Very good. What kind of debt was the $70,000? Oh, my gosh. What kind of debt was the $70,000? Oh, my gosh. It was a car payment. It was a student loan debt, and it was credit cards. $30,000 in student loans, $9,000 in cards, and the rest was the car. So you guys were just normal.

Yeah, we were. So, I mean, not going well at all, but kind of felt like normal. Yeah, it's just the way everybody is, right? Normal, just a little too long, though. I hear you. So, what happened a year ago that got you guys fired up and doing this Ramsey stuff? This started in January. Well, we've been together since I was 17, and he was actually longer than that.

We were together since high school. So, we had our oldest daughter when we were really young. And all we've known is work and struggle and debt for 20 years. It's going to be 13 years since we've been married this September. So back in 2019, in January, we went to a marriage conference in Kingsway Church in Cherry Hill. And they had a clinic about finances. And Anita and Steve Jenka, if you guys are watching, they were the ones that touched base on the finances and talked about FPU. And that's when the light bulb went out for us.

You thought maybe it doesn't have to be struggle all the time. Yes. Well well it went a little bit further we had some savings that exceeded the amount of debt but they were savings you know trying to accumulate you know for the for the kids whatever and somehow just not being reckless and just thinking that the harder you work, just with hard, hard work, hard work, hard work. Well, we weren't budgeting. We weren't paying attention to our finances. And it was just work, work, work, work, work, work, work.

Chaotic, hectic lifestyle. You feel like a rat in a wheel. It just disappeared. It just disappeared. The money disappeared? Yeah. Oh, yeah. You had a leak.

Yeah. It wasn't material things. It was just... No big item. Stuff would come up and it's like, take a thousand here, whatever. Yeah. Basically, that's what it came down to. Wow.

And so then you've got all that regret, which tastes really nasty on the back of your tongue. Extremely. We almost, I mean, I lost it. You know, it was towards the end of 19. It was September 2019. I lost it. I mean, I lost it. It was towards the end of 19. It was September 2019. I lost it. I said, this is it. I'm done with the struggle.

I've had it. I'm not living like this anymore. No, no. I said, I'm just this guy. I'd rather go on my own. I told my wife, I said, if I'm going to struggle, I'll just move into a room. You can have everything. I said, but I can't continue.

I'm going gonna drive myself into the grave um and it was just so then you go to the marriage conference and financial peace university and you say i gotta go to that class and they started it in september of 2019 oh yes so we we heard about it january we started the class september 2019 fPU, and it was hard because every time we watched those videos, it would just be like a slap in the face. Like Dave is calling me stupid again. Yes, and it was hard on us because every time we tried to sit down and have a budget meeting, it was fights. Because we could not believe when we added up $70,000, we were like, we're going to be dead by the time we get this paid off. It's never going to happen.

We were hopeless. That's the right word. And, you know. When did that turn? When did it? When did it turn from hopeless to hopeful? After the life group, you know, just having that sense of community and seeing people from all different kinds of walk of life. So the other people in the Financial Peace University group.

Yeah, yeah. There was a doctor in there. You don't feel so dumb because everybody's in there. No, no, not at all. That's when it sank in. Okay, well, maybe we can do this. Yeah. Okay.

And then COVID hit. Yep. And you're a nurse. Yes. I see you nurse. I see you nurse. And it gets better it gets better covid hit and i'm just as i'm starting my 2020 season um because i work for

the union so it's all theatrical and mainstream production so live well the first whiff was all the pharmaceutical trade shows and conferences were canceled. Okay, that's not good. Then when Live Nation did their release, they canceled the whole touring season. I was like, oh, my goodness. And I'm like, now this couldn't get any. We gained some momentum from 2019. We got the rhythm down. We got the wheels going.

Were you working all the time, though? So what happened was when COVID hit, he lost his job because there was no concerts, nothing. No events, yeah. And he was like, I can't stay home. Like, I have to go and find a job. And I said to him, listen, I'm an ICU nurse. I can't escape this. We have no idea what's going on.

We have no idea, you know, what's happening. What we know is that it's bad. And we had just actually gotten our standard insurance life policy. We had just gotten it approved in January, right before COVID hit. So I told them the girls don't need to lose to parents. You know, you stay home, you take care of the girls, you help them with homeschooling and you stay safe. And we, I will go and I will work. And he wasn't too happy about it. But I'm like, I'm doing it. I'm not going to have you out there risking your life for pennies on the dollar, you know, compared to what he was making before.

So just stay home. And you got like triple time. So I was working six days a week, 13, 14 hour shifts. Your pay went through the roof. And so I was working my full time job. And then I went to travel nursing. So I was working three full-time job, and then I went to travel nursing. So I was working three days a week around home, and I was working another three days a week up north about an hour away from home. So you made a couple hundred that year.

Yeah. And so I was living in a trailer outside of my house because I was scared to get them sick and stuff. It was a little rough in the beginning, but we saw our opportunity to be gazelle intense. And that's what I did. And I just want to thank you guys because unknowingly, you and Rachel and all the Ramsey personalities and all the callers were the ones that kept me going.

So on my drives up north, on my long nights and my long mornings, I would listen to all the podcasts and that's what would keep me going you know not being able to see my family not be able to be with them it was really hard on them it was really hard on me but we were just focused we were zeroed in on being debt free because we got tired of being tired of being tired well you took a really hard scary yeah situation and the work you did Thank you for all the work throughout this

time. And you took it and you said, okay, what can I do? How can I better my family in this hard time? And then you guys together made that decision and it's amazing. And you guys are never going to be the same. This is so awesome. This is so awesome.

It's like every time I got to fork out something I don't want to do it. I don't want to do it. I don't want to spend that money. No, not only that. Yeah, but it's not only that, but I mean, that hopeless, chaotic, we're stuck in a rut, we'll never get out. You're never going to think that way again the rest of your life. Your brain has been stretched to a different level.

You can't go back to the same shape. People think we're crazy. Oh, you are. You're awesome. At work, they're like, why are you working so much? I'm paying debt. I work around with my budget budget everywhere i go and i show it to all my nurse friends i show it to everyone i talk to my patients about it i'm very very we're very passionate about it it's awesome last thing i'm worried about is what you care what you care about

it that's awesome you are amazing this is such a great story we've got a copy of the total money makeover for you and the Legacy Journey for you. The Legacy Journey is the next chapter in your story because you guys have completely changed your whole lives. Yes, our family too. I am so impressed. You're amazing. Wow. Thank you, guys.

Man, oh, man. We are so, so grateful. You have no idea. Wow. Wow. I feel like you just came through a war. Man, amazing. Wow. Wow. I feel like you just came through a war. Man, amazing. Wow.

All right. Joshua and Anna, Leah and Melania. Melania. Ah, beautiful name. Sorry, I was about to mess it up there. And $70,000 paid off. But boy, oh boy, oh boy. In 10 months, making $102,000 to $202,000.

Never be the same again, this family. Count it down. Let's hear a debt-free scream. You guys ready? Yep. Three, two, one. We are debt-free! Woo-hoo!

Wow! Thanks for joining us, America. Our scripture of the day, Jeremiah 32, 17. Oh, sovereign Lord, you have made the heavens and the earth by your great power and outstretched arm. Nothing is too hard for you. Arnold Palmer said, always make a total effort, even when the odds are against you. Now, you hear us, by the way, talk about term life insurance all the time, guys. That's because term life insurance can make all the difference financially for your family if god forbid something happens to you you know that last couple say um you know we're facing the really scary unknowns with covid you remember when we all didn't know anything about covid um and most of

us admitted it back then um but um man that family went and got life insurance didn't they that's what they said and they had gotten it before covet all started right our term life calculator makes it easy for you to find the right policy it shows you how much coverage you'll need and it takes less than five minutes to get your numbers here's what to expect first answer a few questions give us a snapshot of your life the free calculator will then tell you how much coverage you need. It's usually about 10 to 12 times your annual income. And how long you need to keep the insurance. And then you'll be able to compare rates and select the best policy through Zander, our trusted partner.

They shop over a dozen insurance carriers, help you find the best deal. To get your results, text TERMLIFE to 33789. We'll help you with the term life calculator. It's very easy. Text TERMLIFE to 33789, and you can make sure that your family is taken care of. Open phones at 888-825-5225. Rachel Cruz, Ramsey Personality, bestselling author, and my daughter is my co-host today.

Josh is with us in Chattanooga. Hi, Josh. What's up? I'm doing great. How are you doing, Dave? Better than I deserve. How can I help? Well, I've always been an employee, and here recently i've had a youtube channel that

has really taken off and i'm starting to get paid from that and i'm not sure i have people telling me i need like a you know business license or llc where i can write off these expenses but i'm not sure if i really need that wow good for you what kind of money you making off of youtube uh well like this week i made 900 off youtube so it's i mean it's trending up real fast but like this week i made 900 bucks so it's doing really well so if that continues you might make 50 60 grand a year or more yeah that's what i'm hoping what's your channel about josh i'm just curious uh i get old cars running. I've been sitting 20, 30 years.

The channel is Sleeper Dude. Okay, yeah. Hmm. Very cool. You'd like it, Dave. I think I would. I'm a bit of a gearhead. I think I'd like watching you.

What's it called again? I'll look it up. Sleeper Dude. All one word. I'll be looking for your comment. Sleeper? Dude. As in take a nap, sleep.

Oh, it's the car's a sleeper. Yeah, it's a it okay okay all right now i understand okay cool well we just told 22 million people so hopefully we'll get your youtube revs up all right yeah anyway anyway um for those of you that don't know the more viewers you have on YouTube, once you reach a certain point, they will actually start paying you because the ads that they run on your YouTube video, they make money on and they share a little of it with you. Not much, but a little. And so if he's getting $900 a week off of this, he's got quite a good viewership. You don't get that with 500 of your friends looking on. It's tens of thousands hundreds of thousands to get to that point so very cool we make a little money on

youtube too but uh here's the thing you you do not need an llc unless you want one you what you do want to do is open a separate business checking account and put all of your YouTube revenues or any other money you make on this endeavor, if you bought a car and sold it as a part of the business or something like that, you would put any money you make into that account, and the only thing you write out of that account are business expenses. Okay. And so if you bought some video equipment, if you bought some tools to work on the cars,

anything that you're doing that's associated with the business that would be a business expense needs to come out of that account. And so if you put all the income of the business into that account and the only thing you take out of that account are business expenses, by definition what's left in there is your profit. Right. Okay. Revenue minus expenses is profit.

Now, then if you take some of the profit home, you'll pay taxes on it. I'll come back to that in a minute. All right. But if you take the information in your checking account, the income and the expenses, and you sit down to do your taxes, you can do it as a sole proprietor on Schedule C, or you can have a tax preparer do it, or you can incorporate it into an LLC if you want to. It's not necessary for you to write it off, though. You can write it off as a sole proprietor and not have to open up something.

The only reason you really need an LLC is if you're afraid of being sued for something. Okay. Yeah, I wouldn't be worried about that, really. Not yet. You get a big enough number on this, some idiot will figure out a way to sue you. Yeah. But in the meantime, right now, 50 grand is not a big enough target on your butt. You don't have to worry about it.

But you start cranking off 300 or 400 on this, go ahead and get an LLC, okay? Is there like a percentage I should save back for taxes exactly that's my next that's my next speech so um when you take money out of this business account that we just opened josh's sleeper cars or sleeper dudes or whatever that this kind of thing right the sleeper dude account when you take money out of it and bring it home I want you to set aside a fourth of that into a separate savings account for taxes. Okay. Because you're supposed to pay quarterly estimates on your business to the IRS. Now, the quarterly estimate is a one-page form that shows the revenues for the quarter,

the expenses for the quarter, therefore the profit for the quarter, and then it estimates your tax based on that profit, and you're supposed to send them that amount of money, which will be about a fourth of this. It'll be very close. Okay. All right. Great.

So when you calculate that, now the cool thing is when you go to fill out your quarterly estimates, if you've set aside a fourth of your profit out of this account, any money you take out of this account, so you pull $1,000 out of this account, you write $250 over into the tax savings account for your quarter lease, and you write $750 into your personal account to spend and buy groceries with. Yeah, okay. And that's the process.

So set aside a fourth until you get to making, oh, more than $100 and something, then you'll have to go a little more than a fourth. But for right now, I think, and that's profit, not gross. So for right now, I think a fourth will be very, very close for you. So really two big things. One is a separate checking account that gives you your profit. And then when you take money out, the separate savings account to pay your taxes, you're withholding on yourself is what you're

doing does that make sense to you that makes sense very cool congratulations man i'm proud of you that's a neat thing it's fun when you kind of stumble into something you know and he's like oh wow i get to make videos something i love and i'm making 900 bucks a week it's fun there's guys and gals doing stuff on youtube that are making serious money. I mean, our friends Tyler and the gang, the Dude Perfect guys, they've been killing it for years. Yes, yes. Sharp, sharp young men. But, I mean, they're the top five, six YouTube channels in the world.

They're huge. And so they're making a lot more than $900 a week on that, to say the least. Like, a lot of zeros. And good good because what they're doing is good clean fun and it's entertaining families love it the kids love it and it's just an incredible youtube channel we had them speak at uh our entree leadership summit down in dallas the other day when we were down there just great guys yep yep great guys and so you know there's this youtube thing is there's some serious players in it.

And just social media. I'm like, people have large Instagram accounts and they're made. I mean, like they it's. Well, the influencers is a different crowd. Yes. But the YouTube crowd is some of those are influencer types, too. Yeah. But some of them are actually content.

You know, they're actually have content. They're actually providing entertainment or they're providing instruction on something or whatever. And it's going beautifully. And, you know, our show, of course, this show is broadcast every day on YouTube. Yep. And so, and it's got a huge following. Thank you, guys. Thank you to the YouTube people call themselves the YouTube Crazies.

Hello, YouTube. So, thanks, YouTube Crazies. We appreciate you being there. All right. That puts us at this hour of the Ramsey Show and the books. 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. Have a friend or family member that needs a daily dose of Ramsey advice in their life?

Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.