The Ramsey Show - App - Debt is Not a Wealth-Building Tool (Hour 1)

Episode Date: August 31, 2018

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Live from the headquarters of Ramsey Solutions, this is the Dave Ramsey Show, where your money and your life are on focus. Sitting in for Dave, I'm Chris Hogan, and I'm so excited to be here with you. We've got a lot of things to talk about, and I know, America, that you have questions. So here's what I want you to do. Give us a call. We're here for you. The number to call is 888-825-5225. Again, that number to call is 888-825-5225.

Also, if you're on social and you would rather send us a message there, you can do it at Ramsey Show is our handle. So we're excited. We're here for you. And I'm going straight to the phones. First up, I've got Justine on the line. Justine, how are you? Hi, I'm good. How are you? Oh, I'm focused and not finished. How can I help you today? Okay. So I am trying to purchase a home. I've got one option in Southern California, but it's quite expensive out here. And then secondly would be in Havasu, Arizona. I have a lot of family

there long-term. I do want a home out there too. So, um, either way, my problem is if I purchase in Southern California, the 15 year, less than 25% of your income mortgage wouldn't work. Um, I could probably make the payments just fine. I have no other debt. My car's paid off, et cetera. But I just don't know if stretching it a little is okay, or should I just wait, stick with Arizona? I'm just lost. Okay. No, no. This is a good scenario because buying a home is a big deal.

It's also the largest monetary purchase, Justine, that you'll ever make. So tell me some details. What's your household income? About $70,000 after, that you'll ever make. So tell me some details. What's your household income? About 70K after taxes. Okay. All right. And you have no other debt, you said. And so have you saved for a down payment yet? I have about 75 to 80,000 saved. 75 to 80,000 saved for a house down payment? Yes. Oh, you've been thinking about this house thing for a while. Yeah. How did you save that?

How did you save that money? What did you do? A lot of it was just I started saving when I was like 15 or 16 and putting a little away here and there. I came into a small inheritance of about $10,000, so that helped kick it up a little and come from there. Well, Justine, how old are you now? 28.

You're 28 years old and you've got about $80,000 saved. Yeah. I am proud of you. Now, do you have an emergency fund or is that 80 part of your emergency fund? I have a separate emergency fund of about 12. I am so proud of you. You are on the ball. Seriously, this is a big deal. You see people out there, some people will say, I should quantify that, that millennials, they don't

pay attention with money. They're not doing well. You are on the ball like a lot of other people that I talked to on the Chris Hogan show. So I'm proud of you. So, all right, why are you going back and forth between California versus Arizona? Do you have family in both of those areas? Yes. I think long, long term, I want to be out in Arizona. Why? You know, maybe in like my 40s or 50s. That's where everybody's moving. That's where everybody's going to retire and I'd like to be close to them. Okay. But California is my home. So I also want to stay out here as well. So it's like a travel back and forth. All right. And right now you're renting, correct?

Correct. Do you have roommates? I live with my boyfriend. Okay. All right. So you are in a position right now where you're thinking long term. I would tell you this. I would only buy if I could see myself living in that home and in that area for five years or more.

Okay. Now, you mentioned the big deal with California. It's the price tag, right? I mean, they charge for air in California, all right? I've been out there, and it's busy. So what I would do is if you're considering that, you're going to have to look on the outskirts, right? And you want to be careful, Justine, because there are a few steps. I'm so proud of what you've done thus far.

You want to be careful when you're making big purchases because a wrong decision today will bring regret down the road. So here's what I would tell you to do. I want you to get connected with a real estate ELP and start to talk about your price range, the dollar amount that you're okay spending on a home, a dollar amount that you can afford, the 25% of your income as a payment. That's a guide. I want you to use awareness because people never think about,

I not only want a house, but then I got to furnish it. And I got some other stuff that I'd like to do. I'd like to eat, right? I'd like to have some clothes. And so there are other things to do. So you don't want to make an emotional decision when you're buying a home. You're wanting to make a major business decision. So slow down, get connected with a real estate ELP. You can go to DaveRamsey.com and search for them or ChrisHogan360.com. Find an ELP in your area that can talk you through the different markets out

there that can show you what you might look at but in in different areas but do me a favor don't make a rush decision you've done a great job saving up till now and i want you to stay focused right stay on this path don't let this money burn a hole in your pocket be very very intentional and keep the path going you want to be smart look Look at home prices in Arizona and really start to figure out and have a game plan. I think you're going to go in with well over a 20% down payment. So that's a great thing. Keep up the good work. Great job, Justine. I'm going to go on the phones and I've got Michael here from Greenville. Michael, how can I help you? Yes, sir. How are you doing today? Oh, I'm focused and not finished, my friend. How can I help?

So I have some money in a TSP account, a little over $500. And I have a 401k with a little over $1,000 in it. And I just separated from the military and my full-time job, which is where both of these come from. And I'm trying to figure out, I'm in baby step number two, and I'm trying to figure out exactly what I should do with both of these retirements. Michael, what branch did you serve in? The Marine Corps. Marine Corps.

How long did you serve, my friend? Six years. Thank you for your service. I had an opportunity to visit Paris Island just a few months ago. Did you visit there? Oh, yeah. I promise my visit was nicer than yours. Oh, I'm sure it was. Hey, listen, you've done a good job of putting money aside. TSP is a thrift savings account. It's essentially like a 401k for military and federal employees. You've got that money sitting there. You've put it aside.

Here's what I want you to do. Roll it over. You can roll it over into an IRA. You don't want to cash it out. I know the idea and I love that you want to attack debt, but I want you to make, let this money grow for you. Time and compound interest are your money's two best friends. So leave that money alone, Michael.

What I want you to do is sit down and did a budget. Every dollar, go to every dollar.com. It's a great tool. It's the best budgeting tool on earth to allow you to be able to understand where your money is going. And I promise you, you can cut back on some things and find some extra money to be able to attack debt. And debt is a threat. It steals from your now as well as your future. So leave your thrift savings account alone. Leave the 401k money alone. Roll those over into an IRA, but don't cash them out. When you cash them out, you tap Uncle Sam on the shoulder and then he wants his part. And so you don't want that. So leave it there. Get extra money from your budget or take on an extra job. Attack that debt

and do me a favor. Once you close it out, don't open anymore. Remember, debt's a threat. It doesn't do us any good. They teach us that it's a tool. They taught me that in grad school. And I realized I'm talking to a professor that probably had no clue. There's no doubt about money. So don't do that. We want to go forward. We don't ever want to go backwards. And debt is like quicksand. It'll pull you down. 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 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. Hello, America. I'm Chris Hogan filling in for Dave Ramsey. You are listening to The Dave Ramsey Show. We are here for you, but we need you to call. We've got some callers stacked up. Kelly's got them all ready, and I want some more.

So I want you to call us, 888-825-5225. Again, that number to call is 888-825-5225. All right, I'm going back to the phone because I've got Madison in Lexington, Kentucky. Madison, how can I help you? Hi, Chris. How are you? Oh, I'm fantastic. Good to talk to you. Good to talk to you as well. So it's kind of a two-part question, and I'm currently a new listener, so I'm still kind of understanding a lot of the different things that the show teaches. I'm currently 23.

I have no debt, and I cash flowed my way throughout college and graduate school, and I'm starting to look to purchase my house within the next couple years or so. Okay. My question is, would you recommend at my age, is it that big of a difference between a 15-year mortgage versus a 30-year? And then also, on top of that, I'm still contributing to my retirement just like a smaller percentage. Is it okay to still contribute a smaller percentage in favor? Or how would you probably recommend in this scenario? All right. Madison, remind me, how old are you again?

I'm 23. 23. Who taught you about money? My parents did. Did they really? What age did they start Who taught you about money? My parents did. Did they really? At what age did they start talking to you about this? I would probably say like 13 years old. I mean, when I first got my bank account, I wasn't allowed to have a debit card until I learned how to like download the checkbook and write checks by hand.

That's fantastic. Your parents did a great job. Thank you. And I also want to tell you great job because you didn't just hear it. You've been applying it, right? Yes. Okay. So you said you're new to listening to Dave show.

How long have you been listening? Maybe for like the past couple of weeks. Oh, okay. So you're brand new, brand new. Yes. All right. So have you ever heard him talk about the baby steps? I have.

Okay. So we, we teach people, you want to take things one step at a time because in our society today, we try to do 19 things at once and we end up being not effective. Okay. So baby step one's a thousand dollars. Do you have a thousand dollars saved up? Yes. Okay.

Fantastic. Do you owe any debts? I do not. I just paid off my car last week. I know. I heard you say that early. I just wanted you to brag one more time. How much of the, how much car did you owe?

Um, I originally purchased it for $20,000. And you paid it off? Yes. Fantastic. Did you get the title back yet? I originally, yes, I have the title back. Okay. That's fantastic.

And for those people out there listening, if you've got a car payment and you attack it and you get that thing paid off, they send you the title. Now, it takes them a few weeks to come in, but that's when you know you own that car. All right, so you've got a thousand dollars, baby step one. Baby step two, you've attacked your debt. Baby step three is a fully funded emergency fund of three to six months of expenses. Do you have that saved up yet? Yes, I do. Fantastic.

All right, so now from there, you move to baby step four, five and six. Four is investing 15% of your household income. Five is saving up for kids college if you have them. Too early for you, Madison, right? And then six is paying off an attack in the house. And then finally, baby step seven is building wealth to give. So let's go back to your question. Buying a home is a big deal.

It's the largest monetary decision that most people ever make. And so, Madison, I'm a former banker, all right? So I'm going to tell you the truth, all right? You're going to be best served by going with a 15-year fixed-rate mortgage. Okay. Okay? Now, you're going to go into a bank or a lender,

and they're going to try to talk you into the 30 because the payment's cheaper. But let's do the math, Madison. You and I know how to count, right? The difference between actually a CPA, too. Oh, well, you really know how to count. Yes, you do. And so, again, we're not math.

I'm not a mathematician. But the biggest difference between a 15 and a 30 is 15 years. And so it's also thousands of dollars in interest. So I want you to only go with a 15 year fixed rate. Be intentional. Don't buy unless you can see yourself living in that house for five years or more and then slow down. You're a very intentional young lady.

I'm very proud of you. Again, another millennial that's showing that they're listening and they know how to handle this stuff. Very, very proud of you. And oh, Madison, you know what I'm going to do? I am going to give you a pre-sale of my new book. Listen, I have been working on this book. It's called Everyday Millionaires.

I got a copy here. The book's going to release January 7th. It's titled Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. And Madison, you're on your way. Making a smart decision about buying a home and then being intentional enough to not just buy it, but pay that thing off. Attack it.

For those of you that are watching on Dave's YouTube channel, you can see me holding a copy of it. It's kind of strange because it's me looking at me on this book, right? It's a little weird. But anyway, I'm so excited about this because this book is based on the largest research study that's ever been done on millionaires. We studied over 10,000 millionaires. And I'm telling you, their stories are absolutely incredible about what they've come from, what they battled. There we go. They just zoomed in on it.

For those of you that are watching on the YouTube channel, that's fantastic. I'm so proud of the team with the jacket cover and all the colorings. I mean, our team is just rock stars. But this book is fantastic. It's got stories. It's also got the stats on this research study that are just going to blow you away when you start to read and see these things. Plus, also, I'm going to point people and guide them on how to take their journey to begin to become an everyday millionaire. And Madison, you're on that path. So I'm going to send that to you.

$20 people, $20 gets you the book. Plus get this $50 worth of other things. You're going to get a copy of the ebook. You're going to get a copy of the audio book. You're going to get two video lessons, one for me talking about how to retire inspired, but also one from Dave Ramsey talking about how it's okay to build wealth. You see, we've got to change our perspective here in America and understand the American dream is still alive. I promise you. We talked to over 10,000 people that have proven it.

And guess what? There are more to come because people out there want this message. They want this information and they want to know the plan. And so you've got a great opportunity to get it for $20. Just go to ChrisHogan360.com. And you can click on the preorder and get it from there. Or you can go to DaveRamsey.com and get it from there. But you want to get this.

$20? Are you kidding me? I couldn't believe they had the price so low. Because it's a lot of great information. And you will enjoy it. So I'm excited for people to get this of great information and you will enjoy it. So I'm excited for people to get this and I'm excited to share it. Get your copy. We have already sold over 14,000 copies already. So I'm excited for people to get this information. So everyday millionaires, how ordinary people built extraordinary wealth and how you can too. You can

pre-order your copy right now. All right, America, I'm going back to the phones. I've got Michael in Baltimore. Michael, how can I help you? Hi, Chris. How are you doing? Oh, I'm focused and not finished, my friend. I have $25,000 in student loan debt. I'm a recent college grad, so I'm staying at home for a while. But I did just accept a federal position,

making $43,000 a year. So I'm thinking maybe no longer than about 15 months for me to pay off the debt. Michael, I like that. And I thank you. I've read the Total Money Makeover. I've listened to the YouTube channel for a while, a few months. So, you know, I'm really going to be focused. If I can cut it down any more than that, then I definitely will. But I want to save for law school after I get this debt cleared. And so I'm wondering what's the best plan. Do I do a 529 plan? Do I just invest in mutual funds or put it in a savings account? Okay. All right. Michael, very proud of you. Right now, how long is it until you plan to go to law school? I'm thinking about five years. Okay. So in five years. And where are

you thinking about going? What state? Maryland. Okay. All right right so you'd be in state so this is what do you think law school is going to cost in five years uh that i am not i'm not sure okay i'm going to tell you a lot right a lot yeah and so uh and walking through this process so it's five years or more so it's definitely something you want to save your way toward. I don't like the idea of just putting it in a savings account because that's not going to grow for you. It's just sitting there. That's like money in a hammock, right? It ain't working. You could look at utilizing mutual funds to be able to save toward that. But you need to be smart. You need to be aware because you're investing that money. And so investing money goes up and down. It's like a rollercoaster ride.

So you want to have your eyes wide open. I want you to get connected with one of our financial coaches. Go to DaveRamsey.com and click on financial coaching, and you can get connected with a local coach in your area that can really look at this, talk with you about the different costs of school, but most importantly, my friend, help you tighten up your budget now so you can get prepared for later. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options?

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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. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in for Dave. And we have had some great calls thus far. And if you've got a question about money or you've got a question about something just going on in your life, give us a call.

The number to call is 888-825-5225. Again, that's 888-825-5225. Or you can hit us up on social at Ramsey show. And speaking of social, I've got a question in here. This is from Facebook. It's from Amber. Amber says, Chris, we were working hard on baby step number two when my husband lost his job.

He is starting his own business and things are picking up, but our emergency fund is long gone and I'm working hard on building it back up. Thankfully, we only have a truck payment and a house right now, but we're having a hard time paying the bills. I'm not sure what I should do because I never know how much money is coming in and what I should do. Well, Amber, listen, anytime someone has a loss of job, that is definitely a scary time frame. And I'm glad you all had an emergency fund prior to had some money.

But we've got to really begin to pull back and let's get more intentional. Now, there are a couple of things as I read this, and I'm going to get to some tactical things for you. But the first thing that jumps out at me is the pronoun usage. You say I you say you are working hard to build it back up. And Amber, I want to, I want to encourage you to make sure that this is a wee thing that you and your husband both. You see, when someone is starting a business, it takes time to ramp it up because you know what they say about a business that doesn't make money. It's got a name. It's called a hobby. And so what your husband needs to do is to sit down with you and show you what this business is going to do, that it can make money, how much money it might make, and when it can start to make some.

This is an important thing because this family pressure is something that needs to be shared by everybody, you and him both. And now it's a matter of thinking of options. Like your husband may have to get a part-time job or or a full time job and work on the business on the side. You see, we've got to ramp this up and see the only time something changes is when things change. So I'd say let's shift the stress and start to get intentional by making some of these practical changes. And I want you to tighten up your budget and let's get a for sale sign in that truck. Because if it's got a payment right now, it's a threat to you. It's adding to stress. It's not bringing you any relief. And so you can sell that truck, save up cash, get, get a truck for

800 to a thousand dollars. It'll get you from point A to point B. And now we have to change the way we're thinking. And I think this is an important step for you all. This weekend, I want you to sit down together. Let's look at the business. Let's look at the numbers, what's in the pipeline, what's coming in, and what's going to close. And we have to have this attitude because the family needs to eat. And so the family needs a plan. That's why parents and mom and dad, the adults, have to work and get focused. Amber, thank you so much for writing in.

We want your questions, America. I'm going back to the phones. I've got Melissa in Tampa, Florida. Melissa, how can I help you? Hi, Chris. Thanks for taking my call. I have kind of a tricky situation. Uh-oh.

Well, so here's the thing. My husband and I, we've been married 15 years. We were always intentional with our money, Dave Ramsey listeners. The only debt we had before we moved was our home, which when we sold, we made $78,000 extra on it. Good. So when we moved to Tampa for his job, I was finishing nurse practitioner school and had all these jobs lined up where we were. I've moved here. I haven't quite gotten a job yet that I've enjoyed.

It's part-time. It's not going to make enough to get us out of this situation. So my loan is for $68,000. We bought a home for $430,000 that the bank financed. What we ended up doing was they were trying to sell the land next to it, which is amazing. You can see the Gulf of Mexico from the yard. It's beautiful, a lot of oak trees.

We had to buy the land. So the owner knows we have money invested and we're good for the money. He let us buy the land off of him, put down 20%, and we're paying him 7% interest only until we can refinance it all together in a year, showing our two incomes once I'm working. So they would say we're stupid, probably, for doing that. But if you could see this yard and the future we'll have here with our two boys it's beautiful but anyway so my question is do we struggle for a year and i try to work but he travels so much i don't know if i can work full-time to have the proof that we have the income to refinance it all together yeah or do

we use investment money we have over200,000 in rice and stocks. Our $30,000 in children's. We have over $60,000 still saved in the bank. We just don't know what to do. Yeah. The $60,000 in the bank, is that your emergency fund? It's emergency fund and then just savings and checking. I've combined trying to think.

I didn't expect to get on the call or would have written all this down before calling. But we have about 60 roughly altogether, emergency fund included. Okay. And so right now you all are in this position because of this land. Yes, and my new student loan is $68,000. And I'm a nurse practitioner. I could get a job making easily $80,000, but I can't. He travels.

What does his travel have to do with you working? No child care. I can find it, but it's not easy finding a job when you don't have connections. Really, it's been a lot harder than I thought. Okay. Well, this is one of those examples, and you're right. Dave would point out and say, you've gotten yourself in a pickle because you made some emotional decisions. As you were telling me about the view. I mean, you could walk outside from your porch right now and look and see the same thing you're going to see with this land you're buying.

But now it's a matter of doing what's necessary to get what it is you say you want. And so that means, Melissa, digging down, looking at this and thinking, what am I going to sacrifice to be able to get this land? You see, you guys made that decision. The land was that important. So now comes the sacrifice part. And so you're going to have to give up some stuff. And so I do. I want you to look at child care. I do want you to get plugged into a local church, a local community, a local community. Start to talk and get networked and find out what the options are. You see, right now you're feeling hopeless because you don't know options. You're feeling stuck.

And trust me, we've all done silly with money. I mean, I've done stupid with money before. But we have to glance back but focus forward. So now as you're focusing forward on what it is you're willing to give up, you and your husband talking, talking about what you're going to sacrifice, what you're willing to give up to plug in. You've got a great education and a great career as a nurse practitioner. You can make some really, really good money,

but you're going to have to sacrifice some stuff from right now. And that might mean time away from the kids to be able to work full time, but we've got to prioritize a few things. And again, anytime we're wanting to make progress, we're going to have to sacrifice. And I don't know why people don't tell us this as we're growing up, right? We should know this, but we get, we forget because we get older and then we start to want things. And sometimes we act before we think all the way through. Well, now we get a chance to fix some stuff. And Melissa, I know you can fix this, but it's going to require awareness and clear willingness to be able to sacrifice. And again, make sure as you all move forward, we slow down. We don't want to make emotional decisions. We want to make business decisions when it comes to money,

because that's what will help keep us on track. Melissa, again, thank you very, very much for your question. All right, I've got another question here from social. It's Paula from Facebook. She asks, should paying off my PMI, which stands for private mortgage insurance, be included in Baby Step 2 if it's less than my only non-mortgage debt? Paula, no. Okay? PMI, private mortgage insurance, for people that are out there. This is insurance

that didn't protect you. You know what it does? It protects the bank. It protects in case you default. It gives the bank that coverage to be able to protect themselves. And if you finance the home and it's over 80%, they have PMI already slapped on it. And listen to me, this can range. We're not talking about a few dollars here. PMI can go from, from 150 to almost $300 a month. So Paula, no, I want you to be focused. Baby step two is attacking that debt. You'll attack the house and baby step six, but remember the home appreciates each year, or it should, depending on where you live. And you do want to double check and understand your status with PMI. Uh, every few years. A real estate ELP can help you with that. So stay plugged in, stay focused, and remember people, follow the baby steps. This is the Dave Ramsey Show. We'll be right back. Hello, America.

You are listening to The Dave Ramsey Show. I am Chris Hogan filling in for Dave, and we have had a blast with your calls. If you've got a question about money or life, give us a call. You know the number. That number is 888-825-5225. Again, that's 888-825-5225. We'd love to hear from you. All right, I'm going to the phones. I've got Dee on the line in St. Louis. Dee, how are you? I'm doing well. How are you? Oh, I'm focused and not finished. How can I help you today? Yes. Well, I'm 65, looking to sell my home in East St. Louis, Illinois. It's worth about $90,000, but it's a high crime rate area.

It's a beautiful home, but I chose to stay here after my kids were grown. And so now I'm looking to sell the home and just looking for some education, increasing opportunities to enhance sale. Dee, why are you considering selling your home? Well, it's in an area that's not producing. I mean, the home is not going to go up in value or anything, so just holding on to it and at 55, I think I'm done with the gunshots. Okay. I'm just looking to sell.

Yeah. How long ago did you buy the home? I spent about 40, 40-plus years ago. Okay. How much did you buy it for? Probably $40,000. Okay. Okay.

And you estimate the value to be at $90,000 right now? It's at $90,000, but the neighborhood, I'm not sure. I probably wouldn't get $90,000 for it. Okay. And you estimate the value to be at 90 right now? It's at 90, but the neighborhood, I'm not sure. I probably wouldn't get 90,000 for it. Okay. Where are you getting the 90,000 number from? Actually, it was just a number thrown out from the guy that was willing to take it for what it was worth. But you can't just, you know, buy it all day long unless they actually hand you the cash. It's like, okay. That's right. They can talk about it, but until money changes hands, we don't know if they're serious, right? Exactly. Okay.

So, and you've never had an appraisal done on it? No. It's just a fact of the city that it's in. It's like if someone decides to buy it, yes. Yeah. Yeah. Well, I would say this. I mean, the thing to think about whenever you're looking to sell something, you need

to remember, you know, it's only worth what someone's willing to pay for it right yeah uh but if you were to sell this hypothetically let's say you you got 90 or to 100 000 uh do you owe anything on the home no okay so you've paid it off what would you do with that money d actually i would save it um in the long run i wouldn't even buy another home or so i would just kind of process uh of uh i could very well shape in one of my own kids but you know i wouldn't dare look at buying another home outright going into a bank or anything because i'm not dealing with a fico score either. Right, right. Well, you don't want to go backwards.

You're not trying to take on any more debt. No. And I think if I'm in your shoes, I'm going to reach out to one of the real estate ELPs. You can go to DaveRamsey.com and click on ELP. Let's get a real estate professional to come out and really look and talk to you about your home. I'm proud of you for paying this thing off. Now it's a matter of what do we got to do to market it to get it sold? And the best way to do that is you can't listen to speculation, family members or even neighbors. Everybody's got an opinion about what homes are

worth. But I want you to talk to a professional because this is a big deal. You've worked hard to pay this off and now you've got an opportunity to sell it. So let's get connected with a real estate ELP. That's an endorsed local provider. These are professionals that Dave and I trust. They're going to give you the information you need, be able to give you comps about your home. And listen, I want to define that word because people throw that around a lot. I'm a former banker.

You hear comps, and everyone goes, oh, yeah, no, I know what that is. And then I asked a buddy, I said, hey, what's comp mean? He goes, I have no idea. I think is it compensation? I go, no. A comp with real estate is a comparison. So they look at other homes like yours to let you know what yours is worth. So do that.

Reach out. Get focused. Get the right information so you can make an informed decision. And then you can think about what to do from there. I do like the fact that you said you wanted to save the money and really think through of what's next, and that's a good move. Thank you for your call, Dee. All right, I'm back to the phones. I've got Steve in Chicago.

Steve, how are you? Hi, Chris. I'm pretty good. How are you doing? Oh, buddy, I'm focused and not finished. How can I help you today? Great. I have a question for, I guess, some advice.

Okay. My wife and I are currently on baby step two. We have probably paid off about $75,000 in debt so far. We have two cars' remainders for approximately $60,000. We'd love to go on that. We plan to purchase a house still beginning of next year, put up the house she has for sale, and then use that equity as a down payment. Now, we recently saw a human probably, well, her sister passed away,

and she's going to become a little bit of an inheritance. She doesn't want, we don't really know exactly how much, but she thinks it's going to be enough to pay off what she owes currently on the house. Well, that still leaves our two cars, which if you follow the program, that would be the next to be paid. So she wants to keep the house and then turn it and turn rent it. I'm saying no, because then we would use that money, we would lose that money for the payment on the new house, or even we had the income from, or the, I'm sorry, I'm a little nervous.

No, you're good, buddy. Take your time. You're all right. The inheritance, and use that to pay off the vehicles and maybe a sizable down payment on the new vehicle. Okay, all right. I mean, I'm sorry, on the new house. Okay.

So, Steve, you guys got a lot going on. Was this her aunt that passed away? No, it was her sister. Her sister. Were they close? No not not so much okay all right well it's still family right and and so what you don't want to do is to ever start to count money that you don't have uh right so i i'm with you we teach people the baby steps for a reason steve we're going to attack things smallest to biggest. But whenever you're dealing with someone that's had a loss and you're dealing with inheritance

money or life insurance money, there's a process that I advise people to do. And that is to put that money in a money market account and let it sit for three to six months. The reason why is that you're emotional, right? You understand where this money has come from. And when we're emotional, we can do some things with money. We can make some decisions that we'd look back on and really wish we'd slow down a little bit. But you brought up a few other things I want to point out. Yes, we're going to attack the cars before you start to pay off the house. Tech and debt, smallest to biggest, is how you get out of debt. You want to get focused. It's called that snowball. The idea of renting out a house while you all buy another one, you know, you're not in a position to be a landlord right now, right? Because you're going to get someone in there that doesn't pay

you. And now you've got a mortgage to pay as well as your own mortgage on your primary house. That's called a recipe for drama. Okay. Drama. You might as well just get some Pepto and take a big swig out of it, right? You don't want that. Don't go down that path, all right? And don't buy another house till you sell one. I've lived that stupid too and made six months of double mortgage payments, right? So I want you to learn from my stupid. Don't do that.

We got to just slow down. We're trying to do too much too fast. Be clear, right? Walk through. You and your wife get on the same page, right? And you all make decisions together. You've got some options. You all have paid off $75,000. You've done some stuff, right? You know how to win with this. Now we have to stick to the plan. And the crazy thing is, is when

you're a couple, you've got to make sure everybody's voting and everyone knows their job, right? Because when you're rowing in a boat together in the same direction, in unison, you get to the destination a whole lot faster. Thank you so much for your call. I appreciate that. Alright, I got Tanner up next. I'm going to get him in here. Tanner, from Minneapolis, how can I help you? Hey, Chris. How are you doing?

Oh, I'm focused and not finished, buddy. Hey, is it snowing in Minnesota yet? No, but the fall weather is definitely coming. It's cold right now. It's cold right now? It's colder than it usually is. It's about maybe 60s right now, and I'm used to being in the 70s, 80s.

Tanner, did you call the 60s cold? Seriously. You live in Minneapolis. You know what cold feels like i know but usually you know usually we're in the we're in like the high 70s yes and it's colder than usual it's windy real windy well listen what's your question my friend um so um i got about 10106,000 in debt. That includes my home outside of my home. I got $3,000 on credit cards. Okay.

Um, 9,654 on my auto and about 18,122 on, um, other personal. Well, what you're going to have to do, Tanner, and we're going to get you a copy of the Total Money Makeover, you're going to have to list those debts out, buddy. Follow the baby steps and attack them with the debt snowball. So, again, walk the path. You've got to slow down and stay focused. Listen, I want to thank all the callers. I want to thank Kelly Daniels, James Childs,

and all of you, America, for listening in. We're so excited to be here with you, and we want you to tune in later. This has been The Dave Ramsey Show. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.