The Ramsey Show - App - Doing a Budget Shines the Light on Money Problems (Hour 3)

Episode Date: November 26, 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. You jump in, we'll talk about your life and your money. It is a free call at 888-825-5225. That's 888-825-5225. Coming up at the bottom of the hour, Ramsey personality Anthony O'Neill will join us. He'll be talking about teenagers and money, college agers and money. So if you're a teen or a college ager and you've got a question, or maybe you have a teen or a

college ager and you've got a question, Anthony probably talks to more high school students than just about anybody in America. The amount of people that he is getting to is absolutely amazing. He is on the road all the time doing high school assemblies and speaking in colleges, speaking in churches all over America, and he has done a fabulous job. He's one of our most sought-after speakers around here among the Ramsey personalities and is fabulous. So if you've got a question for him, be ready at the bottom of the hour, meaning you can go ahead and call in now,

and Kelly will talk to you and get you set up, and you can be on with Anthony at the second half of this hour. He'll be with us. The phone number, 888-825-5225. Jeremiah is with us in Springfield, Missouri. Hi, Jeremiah. How are you? Okay, Dave. How are you? I can Dave. How are you?

I can't believe it. I got to meet you on the air. It's neat-o. Well, I'm honored to speak with you. How can I help? Well, today I kind of have a praise report, if you like them. You have your emergency fund. My wife and I, I'm a long- longtime viewer and a first-time caller, and we took your Financial Peace University at Second Baptist Church, and we both graduated from there, and we've been following it, and we set up our emergency fund, right? thousand dollars and it really came in handy because we had a situation come up a couple

weeks ago and uh uh i had i got really sick and i missed two weeks of work and then my wife got sick and i nearly lost her wow then my dad had a heart attack in the same week. Whoa, what a week. But that emergency fund, Dave, it was a lifesaver. So I thank the Lord that I'm able to walk again because I was crippled because my legs quit. And the doctors couldn't figure it out. We're running more tests, but I'm walking, and that's a privilege. Having an emergency fund, it was awesome because that came in handy just when i needed it wow amazing wow what a story absolutely incredible well i'm glad that you had that and it sounds like you're doing a lot better and i'm sorry you guys have been through so much

stuff wow well you're right man life happens sometimes and it's always handy to have a little money to catch it sometimes it's going to rain and you gotta. Life happens sometimes, and it's always handy to have a little money to catch it. Sometimes it's going to rain, and you've got to have that umbrella. And even if it's just the starter beginner emergency fund of $1,000, it can make a lot of difference. And, of course, when you get to baby step three, the fully funded emergency fund of three to six months of expenses. I mean, when you're sitting on $10,000, $15,000, and something like that happens, you know, it just changes the whole scenario. You're exactly right. It turns a crisis into an inconvenience. Certainly losing the ability to walk is not a mere inconvenience.

Or having your dad have a heart attack is not a mere inconvenience. But it does take those horrible life situations and eases that. So, hey, thank you for calling in and sharing that, Jeremy. Wow, I'm glad you guys are doing better. Megan is with us in Chicago. Hi, Megan. Welcome to the Dave Ramsey Show. Thank you.

How are you, Dave? Better than I deserve. What's up? I just want to say, first of all, thank you for everything you do. Because of you, we are now debt-free except for our house. My brother introduced me to you a while ago, and in three months, we paid off $18,000 in my husband's student loan. Way to go. We're done with that.

Good for you. Very exciting. Took us 13 years for the first $18,000, three months for the last $18,000. There you go. I love it. Yeah. Anyway, so my question is, we should be done with baby step number three. We're pretty much done with that by the end of this month. Good. By the end of December.

But as we were completing baby step two, we did not stop our investments for our 403B and I have a 403B and a 457. So he maxes out his and I have two that I can max out. So basically right now we're contributing 25% of our income to those funds. Oh, so you're not really following the baby steps. Okay. Well, I tried. I got my husband to knock it down to $50 a month, and he kind of stopped and said, no, we're going to do, you know, I'm nervous about it.

You're doing your plan. Okay. No, I'm trying to do your plan, but I'm dragging someone, you know, to, you know, behind me. So I'm trying to do your plan and now i want to really do your plan for baby step four five and six and do it the right way and pay off the house okay so my question is is since when you uh contribute to those funds or your 403b and your 457 pre-tax why is it beneficial to not max those out to pay off your house? Not max those out to pay off your house.

Oh. I'm investing the full amount. Yeah, yeah. Well, I mean, you can do whatever you want to do, obviously. But the reason is that all of the data points that we have dealing with millionaires, not people with theories, but people who are real millionaires, is that they pay off their home in 10.2 years on average. And after studying millionaires and what they do, that's what we determined. And so what we want to do is put you on a plan to pay off your home.

And most people pay off their home doing their stuff in about seven years if they work our plan, which is 15% of your income going into retirement, not 25%, 15%. And, you know, then maybe step five is kids' college, if that needs to be addressed. And six is then, you know, you put the rest of it on and pay off the house. And most people that are doing that while living a life are paying off their home in an average of about seven years, which gets you ahead of the game for the millionaire status. But you can certainly do whatever you want to do.

I mean, you could never pay off your home and completely fill up all of your retirement, and that's your plan. That's okay. But our plan actually tracks and follows with what the typical millionaire has done. And so, you know, you can do whatever you want to do, obviously. And, you know, so I don't know what your husband wants today. And I guess you need to ask him about that. Open phones at 888-825-5225. You jump in.

We'll talk about your life, your money. As I said, Anthony O'Neill will be with us here at the bottom of the hour. If you have a teenager or a college-ager or you are one and you have a question for Anthony, he's probably got his finger on the pulse of that generation more than just about anybody right now. We did a survey a while back with 50,000 high schoolers participating. Yeah, who's got data like that? Nobody. We do. Yeah, you can get in here if you want to talk to Anthony. The phone number is 888-825-52 the baby steps is the right time to buy life insurance? My answer is typically now.

Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs. That's when they're at the highest risk. And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance since it's the most affordable way to get the right amount of coverage and not break your budget. Go to Zander.com or call 800-356-4282. These are the guys I personally use. Term life insurance is inexpensive and your family needs this no matter where you are

in your baby steps. That's Zander.com or call 800-356-4282. Zander.com. In the lobby of Ramsey Solutions, John and Michelle are here with their straight out of debt t-shirts. I love it. Congratulations, you guys. Here to do a debt-free scream. Where do you live? Right outside of Philadelphia in Allentown, Pennsylvania. Oh, very cool. Good, good.

Welcome to Nashville. Thank you. Good to have you. And all the way down here to do a debt-free scream. How much have you paid off? $165,158.69. Love it. And how long did this take? 29 months. Wow. And your range of income during that time?

Started out around $121,000, and this year we're going to end around $220,000, $230,000. That's a nice jump in two years, two and a half years. So how did your income go up that much, over $100,000 in that period of time? Well, it's a combination of a couple things. We own a small business, and we had a really good year last year and a half. That'll work. And Michelle, she works like a crazy woman. Okay. What do you do, Michelle?

Well, I help with our business. I'm a marketing director for a restaurant. I am in the development office for a Christian school. And I work with John's brother through a county program. His brother has Down syndrome. Wow. Absolutely wild. What kind of business have you got, John?

Power washing. Okay. Wow. You guys are going crazy, man. This is great. What kind of debt was the $165,000? It was quite a list. It had some business debt in there, a small business loan.

We had four vehicles. Two of them were for the business. A slew of credit cards. We lost count. And we had an HVAC loan in there, and a big chunk of it was Uncle Sam. How much did you owe the KGB? I mean the IRS. About $23,000 of that, I think. Wow.

Yeah. So you guys basically borrowed on everything. Yeah. I mean, you were like anti-Dave. Yeah. So what in the world happened? I mean, you didn't just flip. You completely flipped 29-Dave. Yeah. Yeah. So what in the world happened? Because you've, I mean, you didn't just flip. You completely flipped.

Yeah. 29 months ago. Yeah. We, well, see, we got knocked on the head quite a lot and it didn't hit us until 29 months ago, I guess you could say. It hit him sooner. He wanted to do this a long time ago. Oh, okay.

Probably about two years before I was on board. Okay. So what happened that got you on board? What happened that caused all game on? Well, he would listen to your podcast on a regular basis. And in between VeggieTales, I would start to listen to them when I was in the car by myself without the kids. But there was a show where somebody called in and they were talking about contentment. And for whatever, you know, the Lord used that and just spoke to my heart at that moment in needing to be content and not needing to go into debt to get the things

that we wanted. And that was when it changed. And that was when I came home and said to him, all right, let's do FPU. Like, let's do this. Wow. So you went to the class? We actually ended up coordinating the class. Wow. Because the closest one to us was about 30 minutes. Yeah, so just start one. Yep.

There you go. Yeah. Way to go, you guys. So we've been leading. We're currently leading a class now. I think this is our sixth one, I believe. Oh, my gosh. You're all in.

Yeah. Well, nothing like teaching it to make you do it that's right that holds you accountable like nobody's business well done you guys how's it feel you did it amazing it's surreal still i think it is yeah two and a half years ago you were in deep stuff yes it was it was pretty credit cards the bank does we did we laid them all out on the table one time, and it was embarrassing, honestly, to see how many we had. I mean, we played the shell game with balance transfers for years. We've been married 13 years,

and we've been playing that game as long as I can remember. And, yeah, so now to not have a month where we need to pay a balance on something, it feels awesome. So, Michelle, when you guys are leading a class and a spouse is kind of coming in with their arms folded and their lips stuck out, you, 36 months ago, and they're like, what do you say to them? Because you've got to be the one that goes after that person. Right. And I just tell them that I wish that I would have had somebody at that point telling me to just do this. Like, to see where we could have been a year and a half sooner than we are now. You know what I mean?

Like, this could have been us a year and a half ago. So contentment and the Holy Spirit just speaking through that, that just got your attention. It did. As much as anything. Yes. What was the shields up? What was the hesitation? Why did you not want to do it?

I didn't want to have to say no to myself, I guess, is the most honest answer. Okay. That's fair. That's fair. That's a good answer. It's accurate. I mean, it's the way all of us are about some things. I'm kind of that way about pizza.

But good job, y'all. Very well things. I'm kind of that way about pizza. But good job, y'all. Very well done. I'm proud of you. Wow. And led the class. What, six times you said? Yes. Wow.

Amazing. Amazing. Very cool. So what do you tell people the key to getting out of debt is? Well, you definitely got to work together. Obviously, you know, I couldn't have started this without her you know we need to be doing this as a team so you know that and you know everybody says the budget and the budget's totally because without that you don't have a roadmap

and contentment and contentment yes and you got to have love your life not theirs yes you got it you got to be going i'm gonna i'm gonna live like no one else so that later I can live like no one else. Truthfully, Michelle, my motivation when I did this all those years ago was so I could spend more. I wanted to get out of debt and build wealth so I could spend more and give more. I mean, it was just I'm a spender and a giver, and I wanted to do more of that, and I couldn't do it when I was broke. So I figured out the best way to do that is to get wealthy. And it was just, man, it's a different thing. So it's kind of a weird motivation, but it's the truth, you know.

So, well, well done, you guys. Well done. What was the toughest part for y'all? I think we're such a busy family with all the jobs Michelle's doing. Yeah, she works six jobs. And our business, I mean, you know, our business is so seasonal. So through the summer, spring months, months you know we're just so busy so i think our restaurant budget was the hardest thing for us to try to nail down because by the end of the day we're just so

whooped we don't want to we don't want to cook yeah you know so it's convenience food exactly that's it so that was that was probably the toughest thing for us and you know so it's convenience food exactly that's it so that was that was probably the toughest thing for us and you know 29 months it's not it's that's not short it's not no and and definitely halfway through it you know and and we have our seasonal swing so over the winter time for us man it was tough and and to not make really any progress for four months, it was kind of discouraging. But, you know, being able to listen to the podcast and hear people come in here and do the debt-free screams, you know, it kept us motivated and said, you know what, let's just stay the course. And, man, when we hit the ground running this season, we just pounded it out. I think the last two and a half months, we paid off about $60,000 of that.

So it was awesome. Yeah. So you were game on or holding on. You were treading water or going wide open. Exactly. Back and forth, back and forth. That's kind of frustrating, too. It is.

It is. That was definitely difficult. Yeah. Way to go, you guys. Well, we got a copy of Chris Hogan's book for you, of course, Retire Inspired. That's the next chapter in your story for sure, making all this money and no debt at all. Wow. You're going to be millionaires and outrageously generous along the way.

So well done, you two. Very well done. We're proud of you. Who was your biggest cheerleader other than the U2? I don't know. We kind of kept quiet to ourselves about it, you know, just had our heads down grinding. Okay.

I mean, your FPU class has got to be going nuts. Yeah, yeah. They're pretty excited. So, you know, it was exciting to start this last session now and tell everybody, look, we did it. We did it. So this works. I love it.

And you brought the kiddos with you. What are their names and ages? We got Caroline here is 8, and Madeline is ten. All right. Very good. Very cool. All right. Madeline and Caroline and Michelle and John from Philadelphia, $165,000 paid off in 29 months, making $121,000 to $230,000.

Count it down. Let's hear a debt-free scream. Ready, girls? Three, two, one. We're debt-free! Way to go, you guys! Yeah, baby! I love it, I love it, I love it!

So well done. Man, that is a blast. Well, that's how you love it, I love it, I love it. So well done. Man, that is a blast. Well, that's how you do it, folks. You get on the same page, get on a budget to give you the roadmap, the guideline. You deal with contentment. When you're content, you don't need to buy stuff, right? To feel better.

You know what I'm saying? Yeah. I said that out loud, didn't I? It's real. It's very real. Anthony O'Neill up next. If you want to talk to him, the phone number is 888-825-5225. This is the Dave Ramsey Show.

There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts, no hidden fees. And if you're thinking our low cost means less coverage, think again. We'll be right back. to ensure you receive reliable coverage virtually anytime, anywhere. Plus, you can keep your same phone and number and add multiple lines to save more. We're so confident you'll love Pure Talk USA that we invite you to try our service risk-free. Just visit puretalkusa.com, enter promo code SAVEDAVE, no spaces, and receive 50% off your first month. That's puretalkusa.com, promo code SAVEDAVE. Anthony O'Neill, Ramsey Personality best-selling author, joins us this half hour.

Your questions if you're a teen, a college-ager, or have one, or just your questions about money. The phone number is 888-825-5225. 888-825-5225. He also has put together not only the Graduate Survival Guide with Rachel Cruz and he, best-selling book for your graduate, Five Mistakes You Can't Afford to Make in College. We've got the Teen Entrepreneur Toolbox, Everything Your Teen Needs to Start and Run a Business. And last week we launched the Smart Parent event, two of them coming up in May of next year, Minneapolis and Sacramento. Meg Meeker and Anthony O'Neill talking to parents about teens and about kids of any age, for that matter.

Yeah, kids of any age, Dave. And I'm just excited on that one day because you have Meg, who is a doctor who's been talking to parents for years and years. And then you have myself who spent the last 15 years in youth ministry, in high schools and colleges. And I've really learned the heartbeat and what's in the minds of today's young people. And so combining those two together and really helping parents become not better parents because they're already good parents, just making smarter decisions as parents. I don't believe in a word of perfect parents. I believe in a parent who has a perfect heart, and we're just going to help them become a smart parent.

Yeah, good stuff. Smart parent, those tickets are on sale May 14th, May 21st, Minneapolis and Sacramento. You can get them at DaveRamsey.com. And you can follow Anthony on all of his social media, YouTube, Instagram, Facebook. His YouTube stuff is just plain fun. And tens of thousands of subscribers to that. It's very, very popular. At Anthony O'Neill.

The website is AnthonyO'Neill.com. Amy is in Tampa. Hi, Amy. Welcome to the Dave Ramsey Show. Hey, Dave. Hey, Anthony. Hey. How can we help today? Well, I had a question. My son just graduated from

college debt-free. Great. We're excited about that. And I had some money left over in the 529 because he was able to get scholarships, so he didn't use all that 529 money. Now, he also just got married right out of college, and his wife now brings with her

$27,000 in student loan debt. So should he take that money? I think I'm under the understanding that he can take that money out. We can take that because he got scholarship without being penalized. I'm not sure if that's right. Up to the amount of the scholarships. Okay. And you may need to file an amended return for the years that that happened.

You'll have to talk to your tax pro to find out exactly how to do it. But basically, you can withdraw from a 529 up to the amount of scholarships. There's no taxes on it at all. So how much is left in the 529? There's about $12,000 left. Okay. And how much did he receive in scholarships value? Oh, golly. A lot.

I mean, it was like a $40,000 a year school, and he got it down to about $16,000 a year. So he got a lot of scholarships. Okay. So he probably got enough in the last year. When did he graduate? He graduated in December last year. A year ago in December. Yes.

Okay. Yeah, and he got married in July. Okay. Yeah, and he got married in July. Okay. Well, I'm thinking that if he didn't file a tax return in the year he graduated from school, which would be 2016 that, or 2017, I'm sorry. I've got my years mixed

up here, but he would have to go back and file a return or amend that return to show that scholarship. I don't know how you do it exactly, okay? So you need to see the actual tactical part. You'll need to talk to a tax pro. But I'm guessing that you're going to have to do it in the year, withdraw the money in the same year that he got the scholarship money.

Does that make sense? And so we need to kind of do this retro back to 17, I'm thinking. But you talk to a tax pro on exactly how to do it. But you definitely can pull that out just on that last year of school without any taxes. That's a smart thing to do is to take that out. Oh, absolutely. And pay off. It's his money and pay off her debt.

Yeah. That's going to be right. Sure. Even if he wants to go to grad school, it was kind of saving that money thinking he would go to grad school. And he's about 50-50 on grad school right now. He needs to pay cash for grad school. Yeah. Okay.

And they need to get out of debt. Get out of debt first grad school. Okay. And they need to get out of debt. Get out of debt first? Yeah, absolutely. She's not got much debt. Clean it up. What is she doing for a living? She's doing a lot of things. She's hoping to get a job in the film industry.

They're in Birmingham now, and she's hoping to move to Atlanta to do that. But she's just been working in film there in Birmingham. Okay. How old are they? 22. Okay. Yeah. You know, Amy, here's one thing I want to add on with Dave,

because this is money that you worked hard for that you saved, that you've invested into his future. I would say, Dave, don't even cut the check to them ask them hey where can i send this to to pay off that debt so that way is going towards a good means and it's your money so you can make that decision for them they're 22 you give a 22 year old extra you know 13 12 000 i don't see them pretty much paying off debt so amy um congrats on being an excellent mother on really getting kids through college debt free but i would say you know go ahead and cut the check to that company to go

ahead and help them get rid of that debt you've got to verify though how to do that with a tax pro and when to do it in what year i don't want you to get i want you to be able to be able to take that with no taxes and no penalties because you took credit for the um for the uh scholarship that he was able to get so good stuff all right brian is with us in houston texas hey brian how are you hi dave how are you better than i deserve your question for anthony and me yes sir um i've been watching your videos online and i've read the book um i have not gone through uh fpu um but i've been kind of following your guidelines um my wife and i were in a pretty bad financial crunch um last year we bought a house back in 2015, and there was more housing we needed.

We afforded it at the time. I am a home inspector in the Houston area, and the market just tanked. And I had a really, really bad year. We didn't have savings to cover it, and we had to pay a lot of bills and utilities. Brian, what's your question? Okay, my question is, we have gotten rid of a lot of our debt, but we're still struggling. We sold our house, and I'm still transferring money month to month out of the savings account, and I don't know what to do at this point.

So you have an income problem? Yes, sir. Okay. So what are we going to do about the income problem? I don't know. I've looked into Uber. I've looked into taking a part-time job. Real estate is selling in Houston.

Why are you not getting home inspection jobs? I work for a company. Work is good right now, but we are, I am number five in a company that has five employees and it's commission-based jobs and it's fees for payment depending on the market. Okay. Any reason you can't go out on your own? I signed a no-based job, and it's fees for payment, depending on the market. Okay. Any reason you can't go out on your own? I signed a no-compete. Oh, well, there's that.

Okay. All right. So, basically, what we're saying is your job sucks. It doesn't suck, but it could be better. What do you make a year? I've even contemplated getting my real estate license. What do you make a year? What do you make a year and contemplated getting my real estate life what do you what do you make a year real estate what do you make a year uh between 85 and 100 and you can't pay your bills why in houston we're we're i don't know i don't know are you doing a budget uh we

are working on a budget. We recently sold our house, and we're renting at the moment. And for some reason, we just have not figured it out. Yeah, okay. I think you're going to have to sit down and do your budget, boss. You don't work on a budget while you're on the air with me. I mean, you're not working on a budget. You're not doing a budget.

So you need to give every dollar a name, every dollar an assignment, and all of a sudden it will come clear like the sunlight. Exactly what you're supposed to do. It'll come right in your face, man. Hey, thanks for the call. Anthony O'Neill joins us this half hour. I'm going to let you talk next segment, I promise. This is the Dave Ramsey Show. Our scripture today, Colossians 3.17, In whatever you do, whether in word or deed,

do everything in the name of the Lord Jesus, giving thanks to God through Him. My friend Seth Godin says, The secret of leadership is simple. Do what you believe in. Paint a picture of the future. Go there. People will follow.

Boy, that's the truth. That is the truth. Good stuff. Anthony O'Neill joins us this half hour. Ramsey personality speaking to teens and colleges and churches all across America. The new Smart Parent event coming out in May with Meg Meeker in Minneapolis and Sacramento, if you want to come. He'll also be speaking at the Smart Conference in Dallas January the 12th,

which I think will be our next event of any kind around here as far as live events. Yeah, yeah. I'm excited about that, Dave. It's going to be a big day. It's going to be a real big day. We even have some VIP vip uh parent and student backstage tickets available if they still want some i'm like 20 though so it's almost gone yeah so tell them what you do with that so me and dr meg will be backstage with just parents and

uh teenagers or millennials at the lunch break at the lunch break um give them a lunch and we just answer questions about life about about relationships, about college, really any questions that they ask us. We do it. We come in there. We have lunch with them. We laugh. We take pictures.

We sign books. And then we spend about 35, 40 minutes and just really answer any questions that come our way. You know, the last one we did in Kansas City, some of the teams you got to interact with were pretty cool. Oh, man, they're amazing. We've done this two times, and I'm really looking forward to Dallas. That's one of my favorite cities to go to. So, like I said, we only have like 20 tickets left, if that, from what I was told this morning, out of 100. And so we try to keep it very small so we can maybe make sure to hit everybody.

Yeah, make sure everybody gets their questions answered. Good stuff. All right, Mark is with us in Atlanta, Georgia. Hey, Mark, welcome to the Dave Ramsey Show. Hey, Dave,ave i would ask how you're doing but i already know the answer to that some things are predictable our daughter will be entering by the way i'm an fdu coordinator and our daughter will be entering um the georgia teachers retirement program next year after she finishes school and her question or our question, should she add to her retirement program, which will more than exceed 15% of her salary in the Georgia system,

or use that money instead to save up for a down payment on a house? If she has no debt, she will have no debt. Okay. So the Georgia retirement, are you saying it's mandatory, the teacher mandatory withholding? That's correct, yes. And it's over 15% of her income mandatory. Well, the combination of what's coming out of her paycheck and what the Georgia's retirement program will put in there exceeds 20% right now.

We don't know what it will do 10 years from now. Sure, sure. Okay, because you don't have any control over that at all. Okay. Exactly. All right. Right. Well, I do want her to start saving for a house because she's at baby step four.

It sounds like she's debt-free, right? Yes, absolutely. Always will be, by the way. Or will this owner. You know, that's good, Mark. Hey, Mark, thanks for being an FPU coordinator, man. We need more solid people

like yourself. Quick question. Does your daughter, this is Anthony, by the way, does your daughter have three to six months saved already as well? Yes.

Oh, yeah. Yeah, she already has an emergency fund saved. Oh, man. Yeah, fully funded emergency fund. Yeah, and she'll have no car payment, no kind of debt at all, no student loan, truly.

And how old is she? 22. What's that? America. This is amazing. I agree with you, Dave. Yeah, start saving for a house, 22 years old, debt-free, three to six months of expenses already saved, and retirement's looking good. She has an amazing father that has taught her how to do this correctly.

And it sounds like within the next two years, she'll have enough money to buy a house. Not only did he teach her, she listened. She listened. America, yes. Yes, that is amazing. Yeah, well done, sir. Well done.

You've got to be real proud of her. We're proud of both of you. So thank you. Thank you for leading the class, and thanks for setting up another financial peace baby we call them out there you know that's doing this right coming out of 22 yeah definitely she's got 15 going in now once she's got her house bought uh of course you know what we're baby step four six right there until she's married and got kids and worry about her college kids for her future children and all

that kind of stuff we don't worry about that today. But at some point, I do not want her to rely exclusively on the Georgia retirement system for her retirement. I always like to have some money that I can control. And so let's do a couple Roth IRAs later on or a Roth IRA if she's single, a couple if she's married. And let's get some of that money where she controls what it goes into, what it stays in, how much goes in, how much goes out, all that kind of stuff. With a retirement system managed by a company or a government, you don't have any control over any of that. And we think it'll go okay. We know it's not going to go zoom-zoom because none of them do.

But we think it'll go okay. We don't think you're going to lose all that money, but it's not going to give you the best rates of return. So I would have some other stuff from a safety perspective, a control perspective, and so forth. Luke is with us in Nashville. Hi, Luke. Welcome to the Dave Ramsey Show. Hey, Dave.

How are you doing? Better than I deserve. What's up? Hey, I run a small business, and my yearly revenue is projected to be about $100,000. And about half of that is profit before I pay myself. I'm typically in the habit of paying myself about 40% or so of my biweekly revenue. And so my question is, I have some things. I'm in a media business, so I need to upgrade some of my biweekly revenue. And so my question is, I have some things. I'm in a media business, so I need to upgrade some of my equipment.

At what point do I say, hey, I want to put back some more money, maybe pay myself a little less, put some more money back into the business? You know, I myself am in maybe step three and almost done with that. So how do I make that decision? Well, around here we buy computers like water. We buy because we're in the media business, too, and we buy cameras and all this other stuff. And what we had to figure out a long time ago was that it's a never-ending hole. It's a black hole. You can just throw money in it the rest of your life. And as soon as you get

a computer out of a box, it's already obsolete. It's a doorstop the day you buy it and so uh aggravating this crud can you tell and so anyway what we had to do is we just took a percentage of our revenues and we allocate it to equipment replacement and that way we've always got some being replaced all the time but we've also got a limit that way and we go well that's our envelope the envelope's empty we have to stop buying and we hold up on that augusta georgia chris is with us hey chris your question for anthony and me yes sir um i currently have a two-year-old and um doing your baby steps and being very successful at that right now um but i'm a little bit of a planner and i'm trying

to figure out what i need to do for college funds besides the 529s and the IRAs and stuff like that because I have a fear that he may end up being like me and not wanting to go to college and wanting to do something different in life. Yeah, so Chris, give me a little bit more of that. What do you mean by that as far as why do you have that fear at two years old? My parents had put money up in like a money market and had that money saved for college. I didn't want to go to college, so the money was just kind of given to me.

But I want something to be able to live a little bit more advancing, I guess, because money markets don't really have a big return. I'm scared that if I put the money into like a 529, when he gets to 18, he doesn't want to you know go to college and now the money is stuck in a 529 and nowhere to go my understanding is when they're 529 you can't uh remove the money without it being taxed and yeah but it wasn't it wasn't taxed to that point You just have some penalties on it in addition to the taxes you would have paid anyway. Right. Okay, so the 529s are... Penalized and taxed, but they're not taxed until you pull the money out.

So the only thing at risk here is the penalty. Yes, sir. Because you're going to pay the taxes. If you put it just in a mutual fund because you're scared he's not going to go to college, you're going to pay the taxes anyway. Yeah. How old are you? I am 33.

Do you wish you'd gone to college? I wish I would have went to a different college. I started at a small... Do you wish you had a college education? Some days I do, yes. Okay. Then make sure your son gets one. Yes.

And tell him that he's going to have one and you're going to pay for it. Yes. And just brainwash him. Yes. We told our kids their whole growing up life from the time they were three on, you're going to college. Here's your college fund. Look at this whole envelope. It's got your college fund in it.

And then when they're 12, they can calculate the mutual fund. You're going to college. We've brainwashed them. They're going to college. Now, we're in control of it. What they studied, where they went, all of that. But education is a good thing. Agree? It's needed. It's definitely

needed, Chris. So tell your son or daughter that they're going to school, and you're going to pay for it. Bottom line. Anthony O'Neill, thanks for dropping by. Thank you, Dave. Thank you, America. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.