The Ramsey Show - App - Ditch Debt and Build Wealth in 7 Simple Steps (Hour 2)

Episode Date: October 8, 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. Thank you for jumping in. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Al is in Dallas, Texas. Hey, Al, how are you? Fine. How about yourself?

Better than I deserve. What's up? Hey, thanks for taking my call. We're working on Baby Step 2, paying off the debts. So you mentioned that we pay off the smallest debts to the biggest. So I'm to the point where I have two accounts. They're both $2,800. One is actually a repayment, overpayment on the Social Security. Social Security.

And the other one is basically a 401k loan. Now, for the past month, the 401k loan gets deducted from my wages, so I'd be considering that as part of the budget. Sure. Should I go ahead and do the SSI and just continue paying the minimum on the 401k and just be part of the budget, or should I go ahead and just attend Social Security? Not because it's part of the budget and not because of interest rate, but because Social Security, a repayment on that can have heavy fees

and you're dealing with a government which has no soul. And so I would get them paid as fast as possible because I would want them out of my life. And so for that reason, I'm going to, you know, that's going to be the tiebreaker, $2,800 versus $2,800 on a debt snowball for me. And I'd knock them out right quick. Now, when you get to the 401k, you know you cannot pay extra on a 401k loan monthly.

You will have to just save up and pay off the lump sum at one time. Oh, I see what you're saying. They will not let you pay an extra $100 on it a month or $500 a month. You just have to pay the whole thing off or pay the payment. And so what you do is you just build up a big chunk of savings as your last bit, and then when your savings gets up to equal to the 401K above your $1,000 baby step one, then you knock that 401K loan out as quick as you can. Ryan's in Biloxi, Mississippi.

Hey, Ryan, welcome to the Dave Ramsey Show. Hey, Dave, it's an honor to talk to you. You too, sir. What's up? My question was about your credit score. So I've only had one loan in my life. I'm 22 years old right now, and I had a small auto loan when I bought my first car. Since then, I've paid that off. I'm completely debt-free right now.

But I decided to hop on Credit Karma a little bit ago, about maybe a month ago is when I first checked my credit score just because I was curious to see what it was. And there's actually a credit score there. So my question was, how long after you pay your last debt off does your score eventually drop to zero? Well, our typical experience has been, because we don't know. No one knows except Fair Isaac, who runs FICO. They're the only ones that actually know their algorithm. But it appears between six months and a year from the time that you have all zero balances and no open accounts. If you have a credit card and you're paying it off every month, that's an open account. Right. Okay.

You can have no debt and still have a credit score all the time. Okay. So if anybody is reporting on you, and the only way that would happen is if you have an ongoing relationship with them, meaning you still owe them money or you're still using their product, even though you're paying it off every month, it could be an Amex card, then you will always maintain a credit score of some kind. So the only way is if you have absolute, you go off the grid, basically.

You're saying I have zero accounts open and zero balances of any kind. No bad debt, no good debt, no no debt that I pay off every month, no debt of any kind. Roughly six months to a year later, we're finding people's credit score disappears. Disappears. Now, when I first started this, I still had a bankruptcy showing on mine. And so it was not going to go away for a while because I had this bankruptcy showing. And a Chapter 7 bankruptcy will report on you for 10 years. It will show up on your credit bureau report.

And some of the old creditors that you bankrupt on that you don't pay, they might report after the bankruptcy. They're not supposed to. But sometimes their computers kick out that they still haven't gotten paid. Well, they're not supposed to, but sometimes their computers kick out that they still haven't gotten paid. Well, they're not going to get paid because Chapter 7, they got zero. And I had two of them or three of them report three years later, and that started the whole process over. I had to go back and dispute those because they were not allowed to report that.

They did ultimately get paid because I went back and paid my bankruptcy, but as a moral thing, not as a legal thing. But anyway, all that to say, you've got to have the thing completely squeaky clean. And then apparently, if they haven't changed it this month and they don't start counting your rent or they didn't start counting something else that we don't know that they count, then your credit score will go to zero, which is what we call it. But they technically call it indeterminable because they have no way to determine a credit score will go to zero, which is what we call it, but they technically call it indeterminable because they have no way to determine a credit score. They actually sent me an email back in the day that said, we want to check on you because your credit score has disappeared.

You are now undeterminable, and we wanted to make sure there was not a mistake or that you weren't dead. And I kind of thought that was a threat, but it's a little subtle, passive-aggressive. It's like when a southerner says, bless your heart. You know, I mean, it's the same thing, right? Yeah, but I've had zero for, gosh, 25, 26, 27 years, something like that. I had an indeterminable credit score, and I've had an indeterminable amount of money as a result

because I don't have any payments. It's a pretty amazing thing. Open phones at 888-825-5225. Matt's in Charlotte, North Carolina. Hey, Matt, how are you? I'm good, Dave. I appreciate you taking my call, and we'll jump right into my question. Sure.

I have a side business, and I'm strongly considering taking it full-time. I'm going to kind of get your thoughts on it. Everybody in this kind of thing is always scared to do it, and I am too. It's a handyman slash home service, home repair type business. Wonderful business. Well, so far it's treated me good how long you've been doing it i've been going strong for six months what are you making i can make five hundred dollars a day on a great on a good day three hundred dollars on a bad day profit yes sir okay what do you make it your day job ninety thousand dollars a year okay all right

so that's what scares me walking away from that so you're talking about five days a week yes sir okay well i mean three hundred dollars a day i just did it's eighty thousand yes i don't know how to do the daily calculation in my head so i had to put it in the calculator but uh that's what i just got 500 a day and if i only worked 48 weeks out of the year that's like 120 000 i'm assuming do 500 a day, and if I only work 48 weeks out of the year, that's like $120,000. I'm assuming that would pick up the slack where my current job donates to my 401K. Oh, whoopee. I don't.

All you got to do is make a little bit more money, you cover that, and you're working for yourself. I got a buddy of mine doing what you're doing. He made $300,000 last year. Well, you know i would be happy with eighty thousand dollars i swing shit now and i i like doing the handyman thing i feel i sent some gratitude and i've done something today let me just tell you the market is un-freaking-limited if you are honest you show up on time you're clean and you don't overcharge

but you charge a good solid rate which it sounds like you're doing. You'll have more business than you know what to do with because there's so few people know how to do what you do. You have an unbelievably rare and wonderful skill. I would do it today. I think you're ready. You can make $300 to $500 a day. You're close enough. The boat's close enough.

The dock, jump, baby, jump. This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance

and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is.

Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Well, as you guys know, around the Ramsey Show, we are huge fans of people who get up, leave the cave, kill something, and drag it home, turn into millionaires. The original book that started everybody talking about this back in the early 1990s when I wrote my first book, when Financial Peace came out, it was a book called The Millionaire Next Door by Dr. Tom Stanley. It changed the way everyone thought about millionaires. I got to know Dr. Stanley a little bit while he was living, and I've gotten to know his daughter since then, and I'm big fans of each of theirs. And we're big fans, of course, of anyone who's in this millionaire space doing anything.

And as you guys know, Chris Hogan has a millionaire book coming out in January. But Sarah Falah is with us, Tom Stanley's daughter. And this is the first time we've ever talked on the air. We've talked off the air. And she has a new book coming out along with some of her dad's original research. So, hey, Sarah, how are you? I'm good. How are you?

Thanks for having me on. Well, I'm honored. The new book is called The Next Millionaire Next Door, Enduring Strategies for Building Wealth. And it's out this week, right? That's right. Yep. It was a labor of love finishing it without my father. But, you know, it's out, and we're really excited about it.

Yeah. If you guys didn't know, her dad passed in a car wreck what four years ago is it now yeah it was in 2015 that's right yeah he sure did i was thinking i remembered that and about there and um we had had him on several times over the years as we discussed this whole subject of millionaires and some of the mythology that is around millionaires so uh you used some of the research from your dad's, and you're a professional researcher too, like he was, and have put this together.

Tell me about the background on that part of it. What of this did you do, and what of it was combined with what he had done? Yeah, that's right. So we worked together really on the initial survey for the book, really started back in 2012 thinking about the 20th anniversary of The Millionaire Next Door. Like you said, it came out in the 90s. And worked together on kind of what the book should include and got to the point when we were just about to send out the survey to our sample of affluent Americans,

and he was killed by a drunk driver. And so really, he wasn't able to see the data that came back and compare it to what was there in 1996 and beyond. So that's kind of where I took up the project and kept going with it. Sarah is an industrial psychologist and president of Data Points, a data research and technology company that studies wealth accumulation and builds tools to help. And you guys have to check this out.

Datapoints.com has all the stuff on her research as well. But you can get the new book, The Next Millionaire Next Door, Enduring Strategies for Building building wealth at any major bookstore so the new data that you guys got as you put this back together on the anniversary and then you've added to it since with your continued research what were the were there anything that just shocked you in the findings where you said wow i didn't see that one coming yeah you know we looked a lot at um some of the mistakes or the kind of behaviors that millionaires make related to investing. And I think what was surprising was, you know, just like any of us that are trying to do the right thing, millionaires make mistakes along the way, too.

And so we looked at a lot of sort of the behaviors and the mistakes, if you will, that they make related to investing. So that was surprising. And then I think what was surprising, too, was that a lot hasn't changed in terms of the kinds of, or rather the amount that they're spending on things like furniture and clothing and things like that. So some of those things were surprising that were sort of similar across time. Yeah, I was speaking in a church a couple Sundays ago, and I told them one of the key points that I've seen over 25 years of doing this,

one of the five things you have to do if you want to build wealth is you have to be careful who you hang around with because you become who you hang around with. And I see on the back of your book, understanding how those around you influence your financial behaviors. What did you find on that? Yeah, absolutely. I think that, again, you see it's very clear from the work that we've done, both with affluent populations and just everyday folks like us,

that they are, that social indifference, that not caring about what others are driving and buying and wearing is a really key factor in building wealth. We know it's related to net worth, regardless of how old you are or how much you make. And I think now with technology, it's really hard to ignore what other people are doing with social media and so forth. But it continues to be a factor. Just not caring about what other people is one of the ways to build wealth. You know, I think in my case, I was unique because one of the benefits of going broke

like I did in my 20s very violently was I no longer, at that point, I just reached, all I wanted to do was survive and thrive, and I reached the point I just don't care what people think. I still don't care what people think, and I think that was a big contributor to me personally to be able to build wealth again after going bankrupt. But I see it with other people. When you don't care what other people think about what you drive, where you live, what clothes you wear, whether you've been on vacation, if you're not trying to keep up with other people's Facebook version of themselves,

then you've got the ability to win. Absolutely. And I think just like you said, I think that that Facebook version of us is a lot different, right, than what's really going on in our lives, too. So that's something to keep in mind. But we definitely see that in the research. So gaining knowledge and composure to invest and grow wealth. That is a great word, composure to grow wealth.

What do you mean by that? Yeah, you know, we study that related to making decisions when it comes to our investments. But it really, you know, you can apply it to any kind of major financial decision that you're making, and that is to kind of calm yourself before making those decisions. So, you know, the example we give sometimes is when you just get a raise, that's not a great time to go out and look for a new car because you're in an emotional state where you are so excited about the new income level that you have that all of a sudden your decision-making is a little off.

So if you can stay calm and composed, no matter what those financial decisions are, then you have a better chance of making the right one. And I often hear, we've got one of our Ames of Personalities does a career show on choosing the right career, and there's all this stuff about following your passion out there. But you guys have found yet again in this new set of data the idea that a lifestyle-related freedom does not equate to less income or less wealth. It actually equates to greater income and greater wealth, didn't you? Yeah, you know, I think that's right.

I think that, you know, understanding that your passion or your interest, let's say, for your career has to be grounded in some kind of reality. And I think that that's something that, you know, a lot of people don't want to hear, but it is true. And so if you have a passion for the arts and then that's really where you want your career to go. You know, you have to take that with the reality that that means certain things are going to have to be set aside. So that's kind of, again, it's a lesson that a lot of us don't want to hear, but we often have to hear it to build wealth.

Now, there's a price to be paid to build wealth, and it's worth the price, and nobody does it accidentally. They all do it with a plan. Absolutely, yeah. That's one of the things that we keep seeing over and over again, again, whether we're talking about millionaires or those that are on their way to becoming millionaires, but that time spent planning and looking at your goals

and monitoring what's going on in your financial life and not sort of keeping your head in the sand, that relates to building wealth over time. We see that statistically and, of course, anecdotally as well. We're talking with Dr. Sarah Stanley Fallow of, I'm mispronouncing your last name. How do I say it correctly? Oh, it's Fallow. Fallow.

Like Fallow Law. Yeah. They told me before I went on the air, and I still messed it up, Sarah. I'm so sorry. Fallow. They told me before I went on the air, and I still messed it up, Sarah. I'm so sorry. Ta-la. And daughter of Dr. Tom Stanley, iconic work called The Millionaire Next Door. A lot of you have read it. If you haven't, you should. And you need to read Sarah's new book that she did combined with her dad's research project

that they were working on together when he passed away. The new book is called The Next Millionaire Next Door. It is now out, and you need to read it. Now, you know, we've got a book out called, Chris Hogan, called Everyday Millionaire. And let me just tell you, if you want to be a millionaire, there's not one book. You read all of them, and you learn from every one of them. There's no competition. That's why we had Sarah on.

We've been friends with them for years. We love that she's got a book out coming the same year that we do, and we love helping her. And we want you to go buy this book right now. It's called The Next Millionaire Next Door. Sarah, thank you for being with us today. Thank you so much for having me. This is The Dave Ramsey Show. Hey, Spencer here from Smile Love. At Smile Love, we'll straighten your teeth and help you love your smile.

That's what we do, and we do it for less than you'll find anywhere else. I guarantee it. I'm serious. We're talking about paying thousands of dollars less without sacrificing any dental expertise. We're hands down the most affordable way to straighten your teeth. It's easy to get started. You just go online to smilelove.com and use the promo code Dave to get an additional $100 off. So go to smilelove.com if you're interested in straightening your teeth and use promo code Dave for an additional $100 off. We started this company

to help people who aren't fully confident in their smiles. You know that full, unrestrained, laugh as hard as you can kind of smile? That's what we're all about, and we think everyone deserves to have it. So if you ever find yourself holding back your smile, get started today at smilelove.com, and remember to use promo code Dave

to take an additional $100 off. smilelove.com, promo code Dave to take an additional $100 off. SmileLove.com, promo code Dave. In the lobby of Ramsey Solutions, Corbin is with us from Minneapolis. Hey, Corbin, how are you? I'm doing quite well. How are you doing, Dave? Better than I deserve. Going to be up there at a sold-out event coming up in a couple weeks. I heard, yeah.

Are you coming? I hope so. You want tickets? I would love tickets, yes. Well, I know a guy. I'll get you in. Awesome. It's sold out, but I can get you in. We'll get you a pair of tickets.

So, you're here to do your debt-free screen. I am. Love it. How much have we'll get you a pair of tickets. So you're here to do your debt-free screen. I am. Love it. How much have you paid off? $31,700. All right. Love it. And how long did this take?

It took three years, almost to the day since I started the financial piece. Very good. And your range of income during that time? About $47,000 to $50,000. Good. What do you do? By day, I'm tech support at Travel and Expense Software, and by night

and weekends, I work in the film industry, mostly doing on-set audio, but other things, too. Fun. Good for you. Very cool. What kind of debt was the $32,000? It was mostly student loans, but then also a car loan and a car repair loan, too.

Gotcha. Okay. So you, a single guy making $47,000, pay off $32,003 years, which is basically $1,000 a month, give or take, during that time, average. And that's really watching what you're doing. You must have cash flowed the whole thing. Yes, it was very tight. When I was, at least at the beginning stages, I figured out that if I budgeted everything out and all of just the basic bills and food and gas, I had about $40 left over per month. Wow. So it was tight. So you picked up some extra jobs, and that helped put you over.

I got a little bit out of film, but film doesn't pay too much. I got you. Okay. Good deal. Good deal. So three of film, but film doesn't pay too much. I got you. Okay. Good deal. Good deal. So three years ago, you said you started Financial Peace University. How did this whole journey begin other than that? It's kind of a story.

Well, first of all, my sister who's here did your program and did her debt-free stream, and that's how I first heard about you. And so I learned some of it by osmosis kind of but I also like that's good enough I got it um which wasn't smart uh so um so then it was in 2014 which is when I moved 60 miles away from home just you know again by myself to an apartment uh signed the lease everything figured out everything was good I had to move on the 7th of August, and the 3rd of August, my car broke down completely. Engine died. Everything is done.

Wow. And so I'm like, I need to move now. I have no way to get there, no way to get to my job when I get there. I don't know anybody up there. So I just ran out and bought a car. And up to that point, I had been smart in only buying cash or using cash for cars. But at this point i was like every car i get breaks down in a year i'm tired of totally impulsed yes and i like i was

just like that car looks nice i'm gonna get that one and so i paid too much for it i'm pretty sure and um and so but of course i'd already signed the lease so that was something i hadn't taken into account right and so moved up there and about four months later, my, that car, the engine fry broke down. The exact reason that I bought the new car is what happened. And so I took out a car repair loan. And, um, because I was like, I'm not going to let go of this car. I just got it four months ago. I'm going to keep it. And, um, so yeah, so replace the engine at that point in time it was like there was i was overdrafting it was it was it was bad um and because i wasn't budgeting and um i think i don't

know if it was for a moving gift or if it was for um or for a christmas gift but courtney gave me a the box for financial peace but i was still stubborn i'm so like i put it on my dresser and i'm like i I'll probably do that. I'll probably get around to it someday. Yeah, if I just sleep in the same room with the box, it'll be okay. Yeah, absolutely.

Learn it, you know, by osmosis. And it didn't. I didn't. And so I was still overdrafting and actually it was, I believe it was April 2015 when she came up

to stay over at my apartment so she could fly out of Minneapolis to do her debt-free scream. And I'm like, she knows my situation, and she will see that unopened box, and she will give me a lot of crap because she knows, and I can't have that. As only a good sister will do. Exactly. So I'm like, before she gets here, I'm signing up for a class. And that was the motivating factor, so I finally got it. So it's her fault. And I'm like, before she gets here, I'm signing up for a class. And that was the motivating factor. So I finally got it.

So it's her fault. And I'm grateful. So on the way to do her debt-free scream, you get shamed into the process that causes you to be here to do your debt-free scream. Exactly. That'll work for me. I'll take it. Exactly. I'll take it. That works.

That's good family stuff right there and i should say it ended up being a pretty good bookend too because i went out of um got out of debt in this last april and um the singles at my church decided to go on this big trip to montana and i have am i the same vehicle that i got replaced um yeah the engine replaced is an suv so i'm like i'll get i'll take everybody you know i can put a bunch of stuff in there. I thought I would take it in for a quick... You see where this is going. I take it in for just a quick oil change

and tune up before I go. And they say, oh, you're about to blow a tie rod and some other things. That's about a thousand bucks. And I'm like, oh, okay, thanks. And so I just do that. And then I go on to the Montana trip, come back and came back, and my alignment

was out, so all of the tires were just shredded, and there were other things wrong. So in a five-week period, I had $2,300 of car repairs plus a vacation, and I was able to cash flow the whole thing. But good news is now you're not broke, and you can just pay for it. Yeah. Exactly. Wow. So that's a good thing. Man, you do not have luck with cars no i don't well i'm walking so what do you

tell people the key to getting out of debt is you you really you have to commit to you have to want to do it you know you have to you know you can't just and actually you can't just sort of want to it has to be the motivating passion for a while because i was like the only thing i could think about for three years i've got to get out of debt game on no one wins by accident yeah yeah that's very important so um it was obvious your big sis was a big cheerleader who were the other cheerleaders my parents are good cheerleaders yeah and um there was primarily that yeah and um of course a lot of uh people from my parents are good cheerleaders yeah and um there's primarily that yeah and um of course a lot of uh people from my church are on the board to on board to i uh you know this is my financial

peace class yeah that gang that gang you get tight-knit in those classes don't you they're pretty good yeah they'll get up in your grill yeah it's it's good stuff so mom and dad sister financial peace at church our life's good man man. Yeah. Very, very cool. Many people say you were crazy? Not at the beginning. At the beginning, again, I was so broke. They were just like, yeah, do whatever so you can actually pay and buy things. But it wasn't until the very end where it was like, okay, I paid off everything. I'm cutting off credit cards.

I don't want a credit score. Everybody said, no, that's wrong. And, of course, you know, it was, yeah. Once you start winning, then they start wondering. Yeah. I'm like, well, you need a credit score. No, I don't. I really don't.

I love it. Way to go, Corbin. Proud of you, man. Congratulations. Very, very well done. How old are you? 30. All right.

Very good. How does it feel to have no payments? It feels so good. I've had several times since then where I, you know, just make I realize a few months ago that would have broken me for the entire month. And now I can just, I need that, and I budget it, and I buy it, and it's good. It's so liberating, thinking back at it. It's a completely different way to live. Absolutely.

Very, very well done. We've got a copy of Chris Hogan's book for you, Retire Inspired. Thank you. You know that's the next chapter in your story to be a millionaire now. Absolutely. You are on your way. You know how to do it. Yes.

And you'll be there. You're going to be outrageously generous as you go along. You know God owns the money. You learned that at the church. Absolutely. And so you're just going to manage it well. I'm proud of you, sir. Very, very well done.

Good stuff. All right. It's Corbin from Minneapolis. $32,000 paid off in three years, making $47,000 to $50,000. Count it down. Let's hear a debt-free scream. Three, two, one.

I'm debt-free! Yeah! Yeah! That's our done right there, baby. This is the process. Oh, man, I love it. Very, very, very well done. Fabulous.

You know what? You can do this. You. I'm talking to you. You're running down the running trail right now and riding on your bike doing a trying to get some miles in you're on a road trip right now on vacation you plug this in for your spouse to hear you can do this you could have no payments then you would have control of your largest wealth building tool which is your income you you would have control of your largest wealth-building tool,

which is your income. You would increase the quality of your life and your generosity to others. It's a mathematical, relational, and spiritual adventure. Oh, you should do it. Thanks for listening to the Dave Ramsey Show. MC Chef. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Jake is with us in Knoxville.

Hi, Jake. How are you? Hey, doing good, Dave. How are you? Better than I deserve. What's up? I feel a little bit like the prodigal son calling me right now. I did FDU before I got

married about five years ago. I did it by myself. It was actually extra credit for the class at Bible College. I did the class. I guess in my young immaturity, the only thing that I

actually implemented was the no credit cards. And so we've got, fast forward five years later now, we've got two kids. We've got a mortgage, and we financed two cars. So the cars in the house are the only that we have. But I just got an inheritance check, and it honestly kind of kicked me in the teeth because I really felt like I needed to get serious, and I was like, well, I don't want to just use this as a get-out-of-jail-free card, and I want to be wise with this, and

so I'm really just trying to get your take on how I should... How old are you? I'm 27. And how long have you been married? Five years. Y'all had this discussion about the way you're feeling about this check? Yes, absolutely. What's she saying?

She's saying we just need to pray about it and figure out what's the most wise decision. Okay, how much is the check for? $27,500. Will that pay off everything? Not quite, but we do have $8,500 in savings, so we could take, I think, maybe three of that and be done with everything. Everything but the house, yeah. Okay.

Yeah. Good. And then begin your emergency fund. So who passed away? My grandfather. Okay. All right. Well, there's a couple gauges we want to do.

Number one, we want to be biblically wise, which is what she was saying, and pray about this. And then number two, we want to do something with this money that your grandfather would be sitting in heaven and see you doing this and smile. Oddly enough, these are actually the exact same things, because when you start doing smart things with money, that's going to be honoring to his memory, in other words, right? Yeah. And so paying off the debt would not make him mad as long as you had a process to never go back in.

And that's what bothers you a little bit. So what I want you guys to do is I want you to go back through Financial Peace University, and I want you to park this money in a side savings account that is not attached in any way to an ATM card, a debit card, or your checking account, where you can't get to it without a trip to the bank. You have to physically go down there, make it hard to get to, and park it there for nine weeks until you go through the classes together you've got the one-year membership i'm going to pay for it for you to go to financial peace university okay and financial peace university is a one-year membership you got nine

lessons in nine weeks you've seen some of them some of them have been redone since you saw them and uh you go through those then when you get done with that i think you'll know what to do and you take that money and work the baby steps but uh the problem is as you said the get out of jail free card if you don't change your behaviors and have something more than just a promise to yourself you're going to straighten up then you could really cause a problem later um and so what you want to do is prove to yourself during this nine weeks that you have changed your behaviors and when you all are looking at each other going okay we are really doing this we're not screwing around we're not goofing off we're not gonna ish we're really

gonna do it no ishing dave ish financial peace university ish wise. We're not going to ish it. And so that will get you into a mess. And so, you know, if I'm you, I want to prove to myself that I'm not going to goof this up. And that's what I'm telling you to do. So go to the nine classes in nine weeks and then stay. You can watch the videos and you can go on and keep going. You can go to the Legacy Journey class online. You can get in the groups online and continue the discussion with the tribe and talking about it. You've got EveryDollarPlus connecting to your bank online, and that's there with you for a year. I'm giving you every bit of that.

We sell all that for $129. It's about $500 worth of stuff, though. And it's a really, really, really incredible value. And it's yours. And we want you to take care of it. All we ask is that you follow the stuff. Both of you plug into this. And someday when you're doing really good, find a guy who feels like a prodigal and you help him out.

And that's all I ask you to do. Thanks for the call. Megan is in Chicago. Hi, Megan. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve.

What's up? So I am a newer listener, so forgive me for my ignorance. That's okay. I am on Baby Step 2. We have our $1,000 savings, and we're currently working on our debt. We have about $34,000, and that includes our cars. We do not have a mortgage. We currently rent.

Now, my question is, we're going to have this paid off within the next two years, maybe even a year. Great. Now, we have a plan that we wanted to take our children into an RV for about two years and travel the country. However, we would have to finance to get this RV and something to tow it with. We feel like time is of the essence since our kids are getting older, so we would not like to wait if possible, but I just wanted to see what your advice for something like this would be. That's a neat dream. I like having the dream.

That's very cool. Very cool. Well, Megan, I don't tell people to borrow money because every time I find people borrowing money, I find broke people. Right. And if you borrow on something that goes down in value as fast as an RV does, I'm going to find really broke people. Have you ever tried to sell a used RV?

I've seen other people sell them. Oh, most impossible to get rid of them. They're hard to get financing on, and they go down in value faster than almost anything with wheels and motors. They are mathematically horrendous. They're just a mess. And so the other one is a medium-sized boat. If you get a $100 million boat, you can get financing on it.

And if you get a cheap bass boat, you can get financing on it. But the middle range of boats, the $50,000 to $150,000 is a difficult product. And so you just about have to have the money to just consume it and be able to afford it. So what I would tell you to do, what's your household income? It's about $60,000. Okay. I would get myself out of debt. I'd work extra jobs.

And then I would save up and pay cash for an RV that would suffice for the two-year period of time. And then if you sell it, it's somewhat of a loss. At least you don't have any debt on it and you don't get caught in it. It's not a problem. It doesn't ruin your life going forward. Because if you take a wonderful dream like you have and you finance it, you're going to turn it into a nightmare. Right.

It's going to cause a problem for your family. Because, I mean, you put $100,000 in an RV, by the time you get home, it's worth $50,000. Right. And you're going to be stuck and owing all that money. And, you know, you're going to mess up your kid's college plan. You're going to mess up your retirement. I mean, it could be disastrous if you do this wrong. And so what I'd do is save up and buy one or look for a program where you can rent one for two years.

If you can do that for two years and just turn it back in. I doubt there is one. They're probably very, very expensive. I know you can rent them short term for the weekend, and those't bad deals but a two-year plan is different um and when you add all of this up it might be that you guys could stay in your you could travel in your car um or your suv or whatever it is you own and stay in hotels cheaper by the time you add it all up because you're going to lose so much money on this transaction and again i'm not trying to ruin your dream i just don't want your dream to be a nightmare so do it with

no debt you do it used and um and do some mathematical analysis on it and you got some nights to do that while you're working to get your other debts paid off right now and then if you want to save up 50 grand and buy a three-year-old or a 2-year-old $100,000 thing or something, and then it becomes worth $25,000 by the time you get home, I'm not going to be mad at you for that. That doesn't ruin your life. But if you just go write a check and finance something, you're going to be in a mess, kiddo. And I don't want that for you. I want you to win.

Hey, thanks for the call. Well, with 14, almost 15 million of you listening each week, we know how valuable the stories on the show are in providing you motivation and inspiration. If you haven't checked out our Listen and Watch Anytime app, the Dave Ramsey Show app, you need to check out the Dave Ramsey Show app in the Apple Store or Google Play. You can certainly listen to the podcast by going to iTunes or the Google Store. But check it out, folks. We've got the Dave Ramsey Show app as well. and there's a lot of features there, and it's free.

This is 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 in debt? That's pretty impressive, and it could be you this year. Keep listening for more inspiration.