The Ramsey Show - App - Do Rich People Stuff: Avoid Debt, Save Money, and Invest (Hour 1)

Episode Date: March 8, 2019

The show about you

Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studios, 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 am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Christina starts off this hour in Chicago. Hi, Christina. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for having me today. Certainly. How can I help?

So I'm calling because I've just recently started following your show on YouTube and getting some debt advice as I'm trying to make my way out of some debt that I've accrued after not working for a bit of time. So I was just served with papers yesterday from the sheriff's office about some debt that I have with American Express. And I've been following your show and just seeing the advice you've given other people as far as how to deal with this type of lawsuit with American Express, but I just feel like I have kind of unique circumstances in that I am working now again, and I'm in a better place to be able to tackle my debt than I was when I was first not able to make my payments. I just don't know how to go about working with them now that I've been serving papers. Gotcha. Okay. So how much do you owe them? I hope that makes've been serving papers. Gotcha. Okay. So how much do you owe them? I hope that makes some kind of sense.

How much do you owe them? $11,500. $11,500. Yes. And how long has it been since you paid them anything? I think it's been eight months or so. Really? That's all?

Eight, maybe 11. I'm trying to think. It must have been last June. I'd have to look at the paperwork again, yeah. Okay, so it's probably been a year or more? Okay. Maybe it's been a year. It's unusual for them to actually sue you, even if it's eleven-five after only

eight months. But they might. You never know with American Express. They're a pretty unwieldy bunch. What is your income now? $72,000. Oh, that's excellent. Good, good. How much other debt do you have?

I wasn't able to pay before because I wasn't working. I actually moved to Chicago from New York City, was living off some savings, trying to get a job. But I did not get a job for almost a year, which was really unusual. And the job that I took, which is my current job, started off as part-time and temp income. What do you do? Even though I was working. What do you do? I work for a nonprofit. How old are do? I work for a non-profit.

How old are you? I just turned 40. How much other debt do you have? I have about $40,000 total. $20,000? $40,000. $40,000.

What is the other $30,000? It's all credit cards. No student loans? No student loans, no car payment. I don't own anything in my name. Do you have any money left in savings? No, because I try to pay towards everything that I can when I can. So you have nothing left?

No, just my day-to-day spending, basically, my rent, all of my credit cards. You have money in your checking account, but that savings that you've been living off of for a year is gone. Yeah, I don't have any more savings because I had to live off of it when I was unemployed. Gotcha. Yeah. Okay. All right. So you've learned your lesson on jumping off the dock before the boat pulls up.

Yes. You got pretty wet, didn't you? Okay, so here's what you do. The attorney that is on the lawsuit papers is a manufacturing mill. You can imagine a factory with widgets going down a conveyor belt being stamped and robotically screwed onto. Do you know what I'm saying? Absolutely. You're one of those. This is very personal to you.

This is not personal to this attorney or their office. They are a huge operation if they're doing collections for Amex. They may actually be even on staff with Amex. They may not even be an independent attorney operation. They may just be a staff lawyer, okay? But they do tens of thousands of these all the time. Okay. And so it's very impersonal, doesn't matter to them,

and so you can't get your little feelings hurt in this process. You're going to be tough. And just don't be surprised that they don't care about you because I can promise you American Express doesn't care about you. They never have in this transaction, and they certainly don't now. Okay? So this is a simple thing. Call the attorney and begin to negotiate with them a when did you get served this week literally just yesterday oh perfect

yeah so let me just let me try to thousand freak out mode yeah on a scale of one to one thousand when they sent you this piece of paper they are a one it does not matter to them a it's not their money b it's just a job c it's one of 10 000 cases they have on their desk okay you kind of getting the idea yeah you're one you're one of the car you're one of the cars in the factory that's being bolted on and the people bolting on you have no emotion about building you you are not a custom-made car when you're dealing with amex so. So all of that to say, just play it cool. Don't give a rip because they don't give a rip. Don't let them abuse you. Don't let them yell at you. Don't let them say stupid things to you. Just say, if you're going to do that, I'm going to teach you how to talk to a freaking dial tone.

Your parents are cousins if you think you're going to mistreat me. So here's what we're going to do. We're going to just offer some money per month, and probably $200 or $300 a month will get this going again. So I should offer to pay monthly instead of just paying a lump sum? Absolutely, because you don't have a lump sum, darling. I do have a lump sum. You told me you didn't have any savings. No, I don't.

I have an open line of credit, though, that I don't want to put credit towards credit, but if it would get them off my back... Well, yeah, if they'll take $3,000 and settle it, which they might, yeah, go hit the line of credit and settle it. Right, because that would be like low interest through... Well, it would be like a 70% discount. Right. The interest rate doesn't matter when you reduce it from $11,000 to $3,000.

And then turn around and pay it off real fast using your new wonderful income. So, yeah, call them and make them a lump sum offer and just negotiate back and forth. Definitely don't give them more than $5,000. If it's a year plus old, old enough that they sued you, they will take 50 cents on the dollar, probably more like 25 cents on the dollar. I would offer them $2,500 and start their cash, and I'll send it to you today as soon as you send me in writing that this settles the account in full. Now, I can promise you American Express will lie to you. They're scum.

So if you don't get this in writing, it never happened. So whatever your settlement offer is, you get it in writing from them, and then you send them a check, a cashier's check, a prepaid debit card for only that amount. Do not let them have electronic access to your checking account. Yeah, just settle it. But the point is that this is a non-emotional event for them. It's a non-event for them. This is the Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war.

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This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Next Thursday, I get to be in Atlanta with Anthony O'Neill doing a Smart Money event on March the 14th. If you're in Atlanta, I'm sorry, but it has sold out. Thank you, Atlanta. We appreciate that. We've got over 3,000 tickets sold there, and we appreciate you.

We have a few tickets left to the San Diego event. I'll be solo on that one March the 25th. First solo Smart Money event I've done in about four years. So, I don't know. You think I can get through it? Maybe I can. So, we're going to be out in San Diego. That's going to be a really special event.

I'm looking forward to doing that. We're going to do some new stuff that we haven't done in a while. So some big changes coming with the smart money events and the live events in your cities in the fall session. So be ready for that. Anthony O'Neill will be doing smart parent events with our good friend, Dr. Meg Meeker in Minneapolis, May 14th and Sacramento, May the 21st. We're going to be letting you know about a very cool smart conference for the fall coming up real soon. A money and marriage event, April the 1st. No, that's not an April Fool's joke. We're really doing a money and marriage event with Rachel Cruz and Les Parrott in Kansas City.

Des Moines, Iowa is April 15th on Tax Day. Who thought of that? Dallas, Texas, May 16th marriage and money event. Again, Rachel Cruz, Dr. Les Parrott. Those live events are absolutely incredible. Our Entree Leadership Summit coming up the end of April has been sold out for many, many months. It sells out almost a year in advance usually. And this one, no exception.

I think we've got some overflow room tickets. We opened up the Grand Hall Experience, and I think there's a few of those left for that. That's going to be in San Diego. So that will take us down through May 1. I think that's going to about wrap up our live events. May will wrap them events for the – May will wrap them up for the spring. So there's a handful of them left.

If you want to jump in, we'd love to have you. Check them all out at 888-825-5225. And we want to say thank you for making Chris Hogan's Everyday Millionaires book an absolute blowout success, people wanting to learn about what everyday millionaires look like. The book is the result of a study that Chris and our Ramsey research team did, doing the largest study of American millionaires that's ever been done. And we discovered where millionaires really come from.

We know a lot about them. There's 140 statistics in the book. It is not a research paper. If you're a super nerd and you're looking for a white paper on the research project, that's not what this is, but it does have 140 stats in it. Things like 79% of millionaires inherited zero. 5% inherited less than 100,000. Another 5% less than 200,000,

which mathematically means that around 90% of America's millionaires, 9 out of 10, did not receive enough inheritance to become a millionaire. They did it on their own. Only 1% actually inherited a million dollars or more. There's 12 million millionaires in North America. If you want to be a millionaire, you need to learn what millionaires do and do what they do. If you want to be skinny, learn what skinny people do and do what they do.

If you want to grow hair on top of your head, don't do what I did. It didn't work well. So you got, you know, you have to look at things that are winning. If you've been divorced 14 times, I'll pray for your next marriage, but I'm not reading your book on marriage. You're a marriage loser. You been married 67 years. I want to sit down and talk to you.

How'd you stay married to her? She can kill you that long because there's times I think I'm a wake up dead married to this hillbilly woman. I'm just saying. So, you know, here's the that's the deal, folks. I mean, finds it's called best practices in business. Find out a find a business that's winning in marketing and study their marketing. Find a business that's winning in their product development. marketing. Find a business that's winning in their product development. Study their product development processes.

It's best practices. Find out what rich people are doing and do rich people stuff. Now, some people are so stupid. I tweeted that the other day. Do rich people stuff. You get to be rich people. You do poor people stuff. You get to be poor people.

If you're poor people and you do rich people stuff long enough, you get to be rich people. If you're rich people and you do poor people stuff long you get to be poor people. If you're poor people and you do rich people stuff long enough, you get to be rich people. If you're rich people and you do poor people stuff long enough, you're poor people. But some people are so stupid that you think rich people stuff is going and buying things you can't afford. It doesn't mean that at all. That's dumb. Rich people don't do that. They buy stuff they can afford, meaning they pay cash for it. They avoid debt. 74% of the millionaires we talk to have never carried a dime of credit card debt.

Wow. Does that mean you can't be a millionaire if you've got credit card debt? No, it just means you're not likely to ever become one if you continue to carry it. Think about that. They don't borrow money for anything for that matter very very very debt averse the average millionaire that we studied was 49 years old and you know do you have to be 49 to be a millionaire no we talked to a whole lot of them in their 20s 30s but we studied over 10 000 of them i'm intrigued

with these statistics because i just act we're writing a white paper they're doing the actual research paper on it that we're going to publish just for the fun of it because there's a bunch of you that are super nerds like me and i just finished reading it it's going to be about 50 pages long and it is boring as crud i mean I just about fell asleep in my chair this morning finishing it. It is boring. But it's all the detail, the fine detail of the statistical analysis of the research that we did. And some of you are going to want to read that. That's fun.

But Everyday Millionaires, for regular people, this is the right book to read because it's got the inspiration in it. It's got the stories in it. And it's got the statistical evidence of the largest study of millionaires ever done. And it's a number one bestseller. No kidding. Of course it is. Everyday Millionaires by Chris Hogan.

Now, I'm telling you all that because if you will do rich people stuff, you get to be rich people. What is rich people stuff? I just told you. They don't sit around and wait on an inheritance because one's not coming. Oh, they didn't go to prestige schools. No, hardly any of them.

8% went to a named school. Most of them did get an education, though. A lot of them did graduate work, but not in left-handed puppetry or gender studies or getting a Ph.D. in German polka history. They got a degree in something that was actually usable in the marketplace. Oh, by the way, they're continual learners. Ninety-seven percent of the millionaires said that they control their own destiny more than circumstances do. Not to say circumstances didn't impact them.

That's not what I said. But 97% said they control their own destiny. By the way, when we studied the general public, you know what they said? 62% thought they control their own destiny. But 97%, that's all of them, of the millionaires, think that by and large you control your own destiny. It's very offensive to left-wing nutjobs to say that. You lefties, it's very offensive to you to say that you control your own destiny.

Because you want a universal minimum wage. You want socialism. You want to feel the burn. You want someone else to do your life for you instead of controlling your own destiny, instead of being responsible for your own destiny. Now, the right-wing nutjobs have other problems, but the left-wing nutjobs have their set of problems. And boy, have we gotten some hate over this book. Even that one little tweet I put out this morning, a lot of hate.

People get political in a heartbeat. This has nothing to do with politics. But your politics are usually formed by your worldview or vice versa. Sometimes your worldview is formed by your politics, which makes you completely shallow. But, you know, do some critical thought and just say, okay, the reality is, regardless of your belief system, regardless of what you were told or what your party told you or what the talking points on your particular favorite channel are, aside from that, think for yourself and say, well, the largest research study,

and listen, it's double-blind, it's set up, every research technique was employed. This thing is airtight. The research technique is not in question. It was not a shill of a study. It's set up very carefully because we knew we were going to be criticized. I mean, we bolted this thing down tight. There is no leaks in it. If you want to argue with the results of the study, you're what's known as wrong.

97% of millionaires think it's up to them. Deliver yourself like a gazelle from the hand of the hunter. Deliver yourself. You know, I get asked all the time, at what age should I buy life insurance? Let me be clear. If you have a family, if there are people depending on your income, now is the time to have term life insurance. I don't care if you're 20, 30, 40, 50, or whatever. Your age is less important than your financial situation. If you have debt and a lack of savings, it makes no sense to risk your family's financial

well-being based on the cost of a term life policy. Term life rates are just plain cheap, even if you're not in perfect health. And the best way to compare those rates is through Zander Insurance. Zander only sells the plans I recommend and shops among the top companies to find the best rates and the right coverage for you. Call 800-356-4282 or visit zander.com. You got no excuse to put this off, folks. Bad things happen to people all the time, regardless of age, and it's your responsibility We'll see you next time. Fargo, North Dakota is on the line. Michael and Marissa are with us. Looks like you guys are debt-free.

Congratulations. Thank you. And how much have you paid off? We paid off $106,000 in three years. Good for you. And what was your range of income during this time? It was between $75,000 and $99,000, not including a few side hustles that we had. Gotcha.

Cool. And what do you guys do for a living? I work in HR. And I'm a police officer. Very cool. Good for you. What kind of debt was the 106? Yeah, so we were average, Dave. We had credit cards, furniture. We had to pay off two vehicles, and both of us had student loans out of college. Pretty much normal. Pretty much normal. How long you've been married? We've been married for four years. Okay. And three years of the four, you've been working on this? Yes. So tell me the story. What happened one year into your marriage that was your wake-up call?

Yeah. So after we got married, we were looking at our income and our bank account and realized that something was wrong because there was nothing in our bank account and we had a pretty good income. And we actually had the chance to hear about SPU through our church Ignite, and we didn't really know anything about it other than the fact that it teaches you about money. We really had no idea what to expect. So you just said, we need to learn something about money. We're walking in here blind. Church said do it. It sounds good. Let's do it. That's right. So what happened after the first class? So the first two years, we were slow. I said, what happened after the first class? We were a little hesitant to be put on a strict plan, but we were excited and we were in for it okay so the first class didn't do it no second class uh we realized how much trouble we were in when we saw how much debt we had dave

okay third class you start doing the budget that's right yeah it took three or four weeks for you to come all the way around because you walked in blind and you're like holy crud this guy's crazy absolutely not normal. Gotcha. Okay. I don't blame you, man, because, I mean, this is pretty radical stuff we teach. It's perpendicular to the culture. And the big change actually came in in week four where we cut up our credit cards. Michael was so quick to do it, and I hung on to mine, and I was so reluctant, and he was telling me, do it, do it, do it.

And I actually ended up leaving the class crying and upset with him because I did that. But really, that is when our finances changed and our marriage really changed, too. Isn't it weird that something like a little piece of plastic has that much emotional hold on you? It really is. I have seen people over the years just, I mean, they have physical reaction, like crying or shaking or whatever, to cutting up their credit cards. It tells you how entrenched they are in our psyche, doesn't it? Yes, absolutely. That's amazing.

That was a big breakthrough for you emotionally and spiritually both, wasn't it? Yes. Yeah. Very cool, you guys. you guys are fun i like this so how hard was it to get started on a budget how big a fight did you have huge fight um neither of us are numbers people i know in your lessons you talk about one being the free spirit and one being the nerd we are both such free spirit oh a double free spirit house i like it so so you but you were serious enough about it that you were leaning in and then you had a big fight. That's right.

Yes, sir. Cool. What were you fighting about? We were fighting about how much we needed to throw at debt and how quickly we needed to attack this. But finally, after about one year, we finally bit down and decided we need to be gazelle intense about it, Dave. Okay, so you kind of back and forth on the intensity a little bit until you got a little progress and got used to budgeting. And then after a year, you pushed the pedal down. Yeah, we were Dave-ish.

And finally, we were sick and tired of being sick and tired, Dave. I was sick of giving our money to someone else. Yeah. So who was wanting to be the most intense in the early days? Which one of you? Oh, geez. I would say I was, Dave. I was.

Okay. So were you overboard, or was she just slow to come around? I think I was just slower to come around. I liked shopping. I liked spending money the way I wanted to, and I didn't want any restrictions on that. And just after we looked at the amount of debt that we had and realized how much we could actually put towards our debt snowball, I think that's when things really, really changed for us.

Good for you. I'm proud of you guys. Well done. Thank you for being so open and sharing how hard this really is. Because this can, I mean, it does not start out smooth for most people most people fight struggle scratch because it's such a dramatic change in almost every area of your life isn't it yeah it sure is it's hard very now that you're there it wasn't worth it oh yes the complete complete change of heart dave and you know we're giving it back by facilitating classes now.

Oh, wow. Second class. And now Marissa's hardcore in the class. Oh, yeah. She prepares every step the night before we sit down and we go through our plan and who's going to speak on what. And we get excited about it, Dave. Yeah, if some girl's in there or some guy's not wanting to cut up their credit cards, now it's Marissa in their grill. Yep.

You guys are going to be great coordinators because you've done it right. You really have experienced the transformation, the whole process. I'm so proud of you all. Very, very well done. Okay, coordinators, what's the secret to getting out of debt? So the secret to getting out of debt, Dave, is you need to get on the same page as your spouse. And everyone says it because it's so true, Dave. You need to stick to your budget.

If you need to have a weekly meeting, that's just fine. But it's so important to be gazelle intense and focused in on that budget. What about you, Marissa? We came up with the same material together, 100%. Getting on the same page as your spouse. I couldn't imagine doing this without Michael and without us really being on the same page as your spouse. I couldn't imagine doing this without Michael and without us really being on the same page together in this. Yeah, you just can't do it.

I mean, people do it, but it's so rare. I'd say 1% of the success stories are somebody does it without their spouse. It's all the data points say working together is a big, big deal. Learning to work together as a team when you're married is just a, it's everything. So way to go, you guys. Well, Dawn, who was your biggest cheerleader outside of the two of you? Yeah, so our biggest supporters through this have been 100% my family. My sister and brother-in-law are actually on their own debt-free journey right now

and hopefully will be calling you come December. And we also followed the Ramsey Baby Steps community, and that is such an encouraging page on Facebook. Yeah, it is. It's gotten big, too. There's like 100,000 people on there, and all these side threads are breaking off, which is awesome. Yeah, it's a very, very active page.

It's the official Ramsey Baby Steps community or whatever it's called, something like that, yeah. Cool. Well, way to go, you guys. Well done, well done. We got a copy of Chris Hogan's book for you, number one bestseller, Everyday Millionaires. You will be that before we know it.

You have now conquered one of life's biggest troubling areas, money, and you did it together. You got the stuff. You got the right stuff. So proud of you. the right stuff so proud of you all right michael and marissa fargo north dakota 106 000 paid off in three years did 75 000 to 99 000 income count it down let's hear a debt-free scream three two one we're debt-free scream. Three, two, one. We're debt-free. Yeah.

That's how it's done right there. Oh, man. Powerful. I like debt-free screamers that tell the truth until it's hard to do this. Because getting out of debt is not easy. Getting into debt is not easy getting into that's easy i mean any fool can walk into the mall and sign up for six credit cards and go across the street and buy a car and then sign up for a vacation you can't afford on a home equity loan any fool can do that

press hard there's three copies when you're signing your name that's all you got to do and you don't even have to be able to sign your name or it's legible any fool can get into debt and lots of fools do this fool right here did i got into a bunch of it i got a phd in dumb i know what fool looks like i see that boy in the mirror any fool can get into debt oh but it takes adults to get out it It takes people saying, I'm going to live like no one else so that later I can live and give like no one else. I'm going to bust it, baby. I don't care what people think. Adults devise a plan and follow it. Children.

Oh, and there's a bunch of those. Do what feels good. This is the Dave Ramsey Show. We'll be right back. Thank you for joining us. We're glad you're here, America. Open phones at 888-825-5225. Albert is with us in Gainesville, Florida. Hi, Albert. Welcome to the Dave Ramsey Show. Hi, Dave.

How are you doing today? Better than I deserve. What's up? I'm a big fan, and I just want to say two things. First, I'm going to use this as like a halfway debt-free stream. I'm halfway through my $45,000 in debt. That's a good one. Yeah.

So looking forward towards the future. I know I'm not at the home buying part yet, but I wanted to know, when you say 25% of your income or your take-home should go towards a mortgage payment, do you mean just post-tax or like post-tax retirement? Oh, post-tax. Things like that. Just post-tax. Post-tax alone. Yeah.

Not counting your 401K or anything else you buy out of your check. If you pay health insurance out of your check, I don't count that. I'm just saying after taxes, what you get home with after your income tax withholding, then that tells you pretty much what you've got to work with. And then if you, in a sense, put some of that in retirement and some of that maybe into health insurance or something, that's okay. It might reduce that amount, but still, it gives us a fairly good calculation to where we're not.

The whole purpose of 25% of your take-home pay going to your house payment and no more than that is just so you don't end up house poor, so your house doesn't own you. That's all it is. I mean, I want you to get a house. I just don't want your house to get you. That's the thing. Hey, thanks for the call. Sky, wait a minute.

It's going to be Carrie is with us in Philadelphia. Hi, Carrie, how are you? Hi. Hi, Dave. Great. How are you? Better than I deserve. What's up?

I am, we, my fiance, we just are planning our wedding, and we are trying to talk about finances and everything, get everything squared away, and figure out how we're going to join our finances when we get married. I was wondering if you had any advice for that. Yep. The old-fashioned marriage vows. Now, this is after marriage, okay? This is not before marriage.

You can start talking about it. You can even do some pretend mock-up budgets in pre-marriage counseling but until you're married i wouldn't combine finances now once you're married the day you're married i would completely combine them the old-fashioned marriage vows say for better for worse in sickness and in health unto thee all my worldly goods i pledge meaning we're both all in those are the marriages that work best and those are the people that have the highest probability of building wealth very few people who get married and treat each other like roommates uh where you okay half of that mustard in the refrigerator is mine you know and you start all that crap where you're splitting it.

I pay for the car, and you pay for this, and you pay for that. That's like having a roommate instead of combining your finances. When you combine your finances, it forces you to communicate. It forces you to dream together. It forces you to be afraid together when times are bad it forces you together and it's one of the most healthy things you can do with money as a matter of fact marriage counselors often say use a combining of a budget to force communication in a marriage that's struggling and we have experienced many times over the six million people going through Financial Peace University, many, many, many, many, many, many thousands of letters, tens of thousands, hundreds of thousands of letters over the years from people saying Financial Peace University saved our marriage because we force you from a practical standpoint to start budgeting together in one checking account.

And that forces you to talk about it if sharon goes and buys a big thing and i go and buy a big thing there's not enough money in the account checks are going to be bouncing all over town so we have to know together what's in there and it forces us to stick to our budget it forces accountability it forces communication and you know it's not your student loan my student loan if you're married it's our student loans you're the one brought it but it's ours and it's brought it, but it's ours. And it's ours. It's ours.

It's ours. Everything's ours. You change your pronouns from out of the abundance of the heart, the mouth speaks. And you change your pronouns from yours and mine to we, we. You become French. It's ours. It's we. And that's the process I would use. I'm just telling you, there's all kinds of data in the research on the marriage side of the coin and on the finance side of the coin that that's the best process that causes people to win.

Now, it's not to say that one person is stronger than the other. One person is better than the other. It's not about him telling you what to do or you telling him what to do. This is about us learning to work together. We both have a vote. Submit yourselves one to another and um i mean i i have i have made in the marketplace all of the money that has come into our house for 32 years of our 37 year marriage and yet we have an income we have an income it's our household income she's got as much say over it as i do that's how we

chose to run it and that has worked very very well as opposed to i'll make it all by god i guess i'll do what i want to do with it and you're just going to do whatever i say you know well yeah now that's toxic garbage isn't it and you don't want to play that nobody wants to play that so good question i'm honored by you asking it thank you carrie appreciate you joining us open phones at 888-825-5225 alan is in reno nevada hi alan welcome to the dave ramsey show okay what's going on dave gonna make it brother how can i help all right um just want to say you know god bless you brother i love everything you know, God bless you, brother. I love everything you do, your ministry.

Thank you. Currently, my wife and I are in baby step number two. And through my student loan, they deposited $7,000 in my account about two months ago. I haven't touched it. I'm just wondering if I should put that towards my snowball, or should I just give it right back to the collector? Hmm. So how long have you been working on getting out of debt? About two months now.

Okay. All right. So the next time a student loan comes up, you're not going to take it, right? Yeah. Actually, I'm done. I'm graduating in May. I'm in a church ministry degree in a Bible college. Good.

And I'm going to try to be a part-time teacher. So, yeah, so as long as, I'm not going to take out any more student loans. So, you know. Your wife working is your wife working outside the home, and she's helping you pay the bills right now, or what? Yeah, yeah, we both rank helping you pay the bills right now, or what? Yeah. Yeah, we both rank in about $70,000 a year, but I'm starting to get a lot of overtime on my job. Oh, good.

So that's going to change this year. Very good. Okay, good. Well, yeah, I just wasn't sure if I should. How much debt have you got? About $50,000. And is that all student loans? No, a car, $14,000 for the car, $30,000 student loan, and $7,000 credit cards.

Gotcha. Okay. Well, I'm obviously not going to tell you to borrow any more money, and so I'm going to pretend for a second that I don't know the source of this money and that you just have $7,000 in your account. And what I would do with that is I would just apply it to wherever you are on the baby steps, which if you don't have $1,000 in another account, then I would set up your baby step one out of this for $1,000,

and then I would throw $6,000 at your smallest debts, your first few debts, and knock a few of them out, listing your debts smallest to largest, working your debt snowball. And that's the direction I would go. Hey, thanks for the call. Open phones at 888-825-5225. Laura is on Facebook. Facebook.com slash Dave Ramsey has about 5 million of you hanging out there. I will warn you, if you follow a Facebook page like ours,

it's different than a personal page in that if we post a message on our Facebook page and you're a follower, you might not get it. Facebook throttles it back, and they don't send everything out. The only way you get everything is Instagram or be on one of our newsletters or something like that. So you may want to sign up for the company newsletter so we can keep you in the loop on stuff that's going on. Oh, and you can, of course, join the official Ramsey Baby Steps community, the Ramsey Baby Steps community, if you want to, in a private Facebook group to discuss things. That's cool, too.

Anyway, Laura says, I have $300,000 of term life insurance at work. Do I need additional coverage? Yes. If you became ill while you're at work and you had like diabetes, cancer, scare, heart attack or something like that, and then you left that job, you would not have life insurance. And you'd be unable to get life insurance because you became uninsurable. And so that is a nice benefit at work. It's wonderful.

But you need coverage because life insurance is not portable, meaning it does not go with you when you leave the job. So you need your own standalone term insurance too. This is the Dave Ramsey Show. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know you can listen or watch anywhere with the Dave Ramsey show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the app store and download it today.