The Ramsey Show - App - Don't Rationalize Business Debt! (Hour 2)

Episode Date: September 19, 2019

Chris Hogan, Debt, Home Buying, Insurance   Tools to get you started:  Take TDRS listener survey to win a $100 Amazon gift card, click here: http://bit.ly/2krRePv Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Well, I'm Chris Hogan, filling in for Dave, and I am excited to be with you. I cannot wait to talk with you about your money questions or the scenario that's on your mind. You might want a little bit more clarity. Maybe you need some coaching, or you might need some encouragement

and a little push to go in the right direction. Whatever it is, we'd love to talk with you. That number to call is 888-825-5225. Again, that's 888-825-5225. Or if you prefer, you can find us on social media at Ramsey Show, or you can find me at ChrisHogan360. Very excited to be with you. I want you to get on the phone lines. We're here to talk.

We're going to keep it real. I'm going to shoot you straight, and I'm going to tell you the information that you need. Okay, so I'm going to go to the phone lines. I have Wayne down in Texas. Wayne, what's on your mind today, buddy? Hey, Chris. How are you today? Oh, I'm focused and not finished, my friend.

What's going on? It's an honor to talk to you. Well, thank you, sir. So my wife and I are in baby step two. Okay. And we've got about $54,000 in debt left to pay off. And income's about $155,000 a year. Okay. And we're got a 30 year note on our house

at four and four and an eighth for one to 5% and have an opportunity to refinance it down to a 15 down to about 2.875. And unfortunately the taxes down here in Texas are pretty high. So our plan right now is to be debt-free in 17 months, and this would delay it about another seven months, but the increase of the mortgage would go up by about $600. So we're trying to figure out if we should wait or if this is a good thing to do. Closing costs are at $3,700. So it wouldn't take very long to recoup the costs. Right.

Okay, so talk to me about this $54,000 that you have remaining. What kind of debt is that? $4,000 on the credit card, $15,000 in our son's freshman year student loan, and one vehicle that's about $35,000. The other one's paid off. Goodness gracious. What year is this vehicle? The new one or the one that we still have the note on?

Yeah, the one you still have the note on. It's a 2019 Tacoma. What's the payment on this thing? $549. You chuckled. You know where I'm going with this. Who's driving this? You or your wife?

I know. Who's driving this vehicle? I'm driving it. You are? I'm going with this. Who's driving this? You or your wife? I know. Who's driving this vehicle? I'm driving it. I'm driving it. I can't even blame your wife. It's you? Oh, hold on, Wayne. Hold on a minute.

Okay, right now you're driving your future around, right? That's kind of what I'm saying, yeah. Uh-uh. Okay, so if we're going to get real and we're going to talk about this, bottom line is we've got to look and we've got to figure out what's the structure and the time frame. So if you're telling me the largest debt that you have is something you're driving around that's a 2019, I'm going to go to Kelley Blue Book, find out the resale on this thing, and I'm going to slap a for sale sign on it so fast it'll make someone's head spin.

Okay? Gotcha. Yeah, and I don't care if you've got to find a gremlin. And I'm not talking about the little animal. That's a car from back in the 70s and 80s. Get something and drive it that's paid for, that you can get around, and now you can start to move $549

toward that credit card. Because remember, with the debt snowball, we attack it small as the biggest and go from there. Okay? I love the idea of refinancing. I love the idea of refinancing. I love the idea of you guys being able to drop the rate from a 32 or 15. You're just not in that position just yet. Okay.

That's $600. That's, that's going to be going into payment. If you think about it, you get this vehicle sold and you attack your debt. You are essentially going to be moving what you were paying in the car payment to now this new mortgage on a 15 year. Okay. Gotcha. And so that's what I would do. going to be moving what you were paying in the car payment to now this new mortgage on a 15-year. Okay? Gotcha. And so that's what I would do.

I love that your mindset is there, but I feel like you're doing level six things right now, and we need to get back to level two. And this vehicle is something that needs to get out of your life. Okay? We got a lot of people that are doing that right now out there. And we get caught up in it because we think a car payment is normal. We just get used to it. We get numb to it. I know I fell into that trap years ago, but the mindset, when you learn how to count, you start to see this, you realize, hold on just a minute. There's something I can do a little bit different. And I'm not beating anybody up. I just

want you to be real about it and acknowledge I don't want to continue the trend. And a lot of people have told me, Chris, we're just going to go car looking this weekend. I go, no, you're not. No, you're not. You're going to go looking, but you're going to bring home a payment. Unless you have your mind right, you got to have some goals and you got to be aware of what it is you're doing, what you're not going to do. So Wayne, yes, refinancing is a good thing, but right now you need to take some other steps get this thing cleaned up and then you can look at moving to a 15 year thank you for your call my friend all right i'm back on the phone i've got carl on the line from florida carl how are you hey i'm good man how are you i

am focused and not finished what's on your mind hey um so i'm about $13,000 in debt on a car. I make about $17,000 a year. And I know it is a pretty obvious answer here when you talk to the last guy, but is it worth selling it and buying a riskier car that will probably break down every now and then? Well, I can tell you. Tell me this. Are you working full-time or part-time right now, Carl? I am working full-time.

Okay. But it's just some weeks. They just don't schedule me, like once a week or once a month. All right. And on the car, how much is the payment on this vehicle? It's about $250 a month. Okay. As you can imagine, that's a big chunk of your bring-home pay, isn't it?

Yes, sir, and the insurance is $250. Yeah. Yeah, and I can tell you, I have tried to rationalize some stuff too, Carl, where you say, you know what, if I've got a car and it's better, it might not break down. And I'm telling you, I'm here to break your heart. You know, I know people that have cars that are a few years old that still will break down. And so it's a matter of getting something reliable that's paid for. And, you know, not to mention just taking that step.

But for you, what industry do you work in right now? So I'm an EMT for a private ambulance company. Okay. At $17,000 a year? Yes, company. Okay. At $17,000 a year? Yes, sir. Okay. And you've been trained as an EMT? Yes, sir.

Okay. Carl, it's time to find another job. Yeah. Yeah. No, I mean, with your skill set and what's out there, buddy, I'm telling you, I need you to reach out to some friends and contacts and really start to find out what else is available out there. I don't want you to stop doing what you're doing right now, but we got to find something that's going to pay you commiserate

with your experience and your skillset. Um, you can make more and especially, you know, in Florida, it doesn't matter where you are. You can do that. Uh, I like the idea of going to Kelly blue book, looking to get this car sold. And I want you to save up to be able to buy a car out for cash. And I don't care if it's an $800 or $1,000 car, but it's going to take, this is $250 down that's not going to be leaving you each and every month. It's going to give you an opportunity to have some breathing room. And so this is a step that I would take. And you have to remember, anything that's worthwhile will require some level of sacrifice. But what we have to do is push against our normal way of thinking.

It's so easy to rationalize. Well, it's going to be okay. Or I can just, well, you know, I'll tough it through. No, no. I want you to make moves that set you up. I want you to make two-year decisions. I want you to make a decision today that in two years you look back on and you're glad that you made that decision. Oh, it changes the game, people. And we got to think differently. This is the Dave Ramsey Show. Over the years, I've seen so many families suffer by not having life insurance. It's not that they didn't care. It's just that they didn't know, so they did nothing. That's a huge mistake.

Listen, husbands and wives, moms and dads, think about it. If you died, how would your family pay the bills, the mortgage, food, and plan for a better future? This is what life insurance is all about, and term life is the only way to go. It's not expensive, and it's not complicated. Stop wasting money on cash value plans. You need 10 to 12 times your income in protection, and I recommend 15- or 20-year-level plans. I also only recommend Zander Insurance, and I have for over 20 years. These are the only people I personally use, and they only offer the plans I recommend. Call them at 800-356-4282 or get instant quotes online at zander.com.

Trust me, these simple steps will let your family know how much you care. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave today, for this hour, and excited to be with you. Just had an opportunity to meet some outstanding folks out in our lobby. We've got people in town from Texas and Colorado, from all over. And listen to me, if you are in Tennessee, I want you to come by and visit our new office. It is outstanding. Very, very proud.

And the team is proud. We've got some amazing things for you to walk around and begin to see more about the story of the company and what we're about. So we would love to have you come in. We've got Baker Street over there that Melissa Wilson runs. We've got cookies and coffee. There's all kinds of stuff in there. It's good stuff to do. So we'd love you to come by and visit us if you are in the area. I talk with you guys and tell you to call us if you have questions. And I also tell you that you should reach out to us via social media. Now, if you're going to call us, that number to call is 888-825-5225. Again, that's 888-825-5225. You all know that number. You've been listening to it and hearing it for years. Store it in your phone so you can call us. But also, we told you via social media. And so I got a social media question in,

and this is from Brad from Facebook. And he asks, as my wife and I go through the baby steps, when we get to the save for college part, since our kids have already finished college, should we help them pay off their student loans as part of baby step number five? Okay, Brad, hear me. No. No, you should not. And here's the deal. I want you to get focused on baby step four, or if your kids are already out of college, I want you moving forward to baby step six. This is where you pay extra on the home.

So remember, if you're brand new out there, the baby steps are the foundational piece of what it is that we teach through Financial Peace University, but it's walking people through the process of how to win with money. How do you get out of debt? How do you begin to save? And how do you invest? This is how you go about it. So the extra money, no, you would pay toward the home. You now have young adults that have graduated. They need to work their debt snowball and you need to budget. And Brad, the real reality behind that of you getting focused is I don't want you to become a burden to your kids. When I did my first book, Retire Inspired, the real reality behind that of you getting focused is I don't want you to become a burden to your kids. When I did my first book, Retire Inspired, the top two pieces of research that we found, people had two main fears.

Fear number one was fear of running out of money, which we can imagine. Fear number two was fear of becoming a burden to friends and family. And if you don't have enough put away in your retirement, that's exactly what can end up happening. Your care falls to friends and family. And if you don't have enough put away in your retirement, that's exactly what can end up happening. Your care falls to friends and family. So I want you, Brad, to stay focused on taking care of yourself. And you can help your young people that have graduated learn to budget. All right, I'm going back to the phones. I've got Chad on the line in Arkansas. Chad, how are you? I'm wonderful, Chris. How are you doing? Oh, I'm focused and not finished.

What's on your mind today? Well, it's an interesting question. I am coordinating for the first time ever a class here at our church, and I had a student ask me, we're on week two, which is the debt snowball, and he owns his own business, and he doesn't have any personal debt. So they're probably in four and five right now. He asked, where does his business debt fit into this, the whole process? And I don't know all numbers exactly. Could be a car in the business, you know, could be equipment. That's really the question I'm asking. Okay. Well, first and foremost, Chad, let me tell

you, thank you for taking the time and being willing to coordinate Financial Peace University. It's because of people like you that you begin to help shape and help people in your community. So I'm proud of you. So thank you for doing that. And as far as his question, as you guys are talking about debt in the business, we have to remember, most of the time when you're dealing with debt in a business, there is some type of personal guarantee on it. What that means is that it's not just the business that's indebted. It's you as the individual. Okay, so keep it in mind. If it is a vehicle that's in the name of the business, we all know who signed to guarantee that.

It's him. So in that mindset, what I would do is as you look at it, and again, I don't know the type of business and what he has, but you got a couple of options. You're either paying on that debt inside of your business budget, or you're taking care of that debt if it's personally guaranteed in his own budget. All right. So that mindset, we're still treating it the same because if it's a business and it has debt, Chad, I'm telling you right now, it's guaranteed in some way. All right. And so people either put up collateral equity in their home or it's a signature loan where you're

personally guaranteeing it with your signature. So and I need to talk about this for a minute because people oftentimes try to rationalize business debt. They say, Chris, you don't understand. I'm about to start a business, so I got to take out this small business loan. No, you do not. Okay. No, you do not. What you need to do is start small and slow.

You see, it's crockpot time, right? Too often times we try to microwave stuff, right? I talked to somebody that took out a $200 thousand dollar loan to start a lawn care business. OK. A lawn care business. He needed a lawnmower and a weed eater. OK. That's exactly what he needed. Could have got one of those at Goodwill, borrowed one from a friend and been in business that weekend. But instead, he bought a truck. He bought a trailer. He bought this ride behind lawnmower. I mean, this thing, I'd never seen anything like it. It was nicer than some cars that I've seen. And what it did was, is this business idea became the rationalization to go into a bunch of debt.

And see, we don't want to do that. We got to think different, right? The only way to get different is to be different and think different. You all have heard Dave tell you for years, the definition of insanity is to keep doing the same thing over and over and expecting a different result. We're not going to fall for that anymore. Okay. I'm on a roll. So I'm going to take my other Twitter question. This is from Tammy. Tammy says, I just saved up my baby step. Number one, where do I save it? Is it cash in a safe, a savings account? I'm worried if I have it in a savings account, I'll spend it. I'm worried if I have it in cash, I'll lose it. Okay, Tammy, listen to me. I hear you and I understand what you're feeling, but here's the thing. An emergency fund, we have to decide what that is. The goal of the emergency fund, it's not a slush fund.

This is not a, if something goes on sale fund. This is an emergency fund. That means if life happens, you need money without reaching for debt anymore. So when you decide that and you see it differently, you can start to frame it up. I would say putting it in a savings account. You said you're worried about if you have it in there, you'll spend it. We just talked about that, right? Okay, if you're not going to have that discipline, you're going to spend it anyway, and you're going to keep using debt and you're not going to get to where you want to go. So you have to think differently to be different. You can put it in a savings

account and you can do this. You can unattach your savings account to your debit card, which means you can't access the funds from your savings account through your debit card. You actually have to go into the bank, wait in line, and fill out that form in order to get money there. You see, and I think, to be honest, Tammy, that's a smart move because it adds another layer and another step that you have to take that most of the times it gives you a chance to get clear. And too often, we can all get one-itis, where you see something and you really want it,

and we need to slow down and think, okay, is this something I really need? Like, how am I going to feel two weeks after I buy it? Some of y'all have been in the mall running around with a shop-o-rama, and you bought stuff, and if I gave you a piece of paper to write down what you bought two months ago, you couldn't tell me. You have no idea. But in the moment, you lost your mind. And see, that's where we have to wake up.

And so, you know what? I'm not going to do that anymore. I'm going to go in with a set dollar amount, and I'm going to spend that amount in cash. And I'm going to walk out with something that I want, and it's okay to have things that you want. But we definitely need to take care of needs. And so you never want to get confused. So, Tammy, take my advice. Use the savings account.

Don't leave it around in cash. Use the savings account. Detach your debit card from that savings account. And't leave it around in cash. Use the savings account. Detach your debit card from that savings account. And that emergency fund will be there. And if you need to get to it, you can transfer it online from your savings account to your checking or go into the bank. That's what I would do. And so that gives you comfort to know I'm not going to lose it.

The bank is insured. My money is okay. And it allows you to move forward with confidence. That's exactly the step I would take. And it just gives me this thought. What if we were to do that? We know ourselves better than anyone else. So let's set ourselves up for success. Let's start to do some things. Some of you struggle as you go to the mall, or maybe it's eating out at restaurants. Let's cut, let's stop that. Let's say you're going to eat out once a week instead of five times a week, right? Let's say you're not going to go to the mall. Let's say you're just going to just kind of do something else with your time.

See, those small steps can lead to progress, and that's what we're chasing. This is The Dave Ramsey Show. Hey, guys. At the Dave Ramsey Show, we really value your input. It helps us to know what's important to you so we can deliver relevant content to help you crush your money goals. We just launched a brand new survey, and we'd love your feedback. It only takes a few minutes, and you'll be entered to win a $100 Amazon gift card. No purchase necessary. Take the survey at DaveRamsey.com slash survey or text survey to 33789.

You are listening to The dave ramsey show i'm chris hogan ramsey personality filling in for dave this hour and we have had some fantastic calls and some great social media questions as well so i want you to give us a call if you've got a question that number to call is 888-825-5225 again that's 888-825-5225 i'd love that's 888-825-5225. I'd love to talk with you. And if you prefer, you can look us up on social at Ramsey Show or Chris Hogan 360 would love to talk with you through social media. That's Instagram, Twitter, all the things. We'd love to talk to you from there as well.

All right, I'm getting back to the phone. I've got Harold down in Kentucky. Harold, how are you? Amazing. How are you? Oh, I'm good. Boy, you make me sound like Michael Jackson. You've got a deep voice. Oh, my goodness. Yeah. I'm like the movie Dazed and Confused. How can I help you, my friend? I don't know which way to go. Talk to me. I'm 51 years old, near retirement. All right. I have a $110,000 mortgage, and we have $170,000 traditional IRA. Okay. I work another job.

I'm retired. I work another job primarily to help out with my insurance, which is $970 a month. Okay. My yearly income with my wife is about $65,000. All right. We have two grandchildren that's been with me for 12 years. They're 16 and 13 that we're raising. My question is, should I cash out my, or not necessarily cash out my IRA,

but take my IRA and pay off my home. I was contemplating taking Social Security in February when I turned 62, and I can still work and make $17,000 a year. I just don't know which way to go with the insurance being so high, whether I should go on and draw my Social Security, which my health is not the greatest. Okay. But I want to go on and get that started, possibly. All right.

Harold, how much do you all have saved for retirement? Is it all in that $170,000 of the IRA, or do you have other funds? We have a $10,000 savings. Okay. All right. And you owe $110,000 on the house. How much is it worth? $170,000. Okay. $150,000, somewhere. All right. All right. Okay. All right. And you owe $110,000 on the house. How much is it worth? $170,000. $155,000 somewhere.

All right. Okay. And you said your health is not the greatest. My wife's better. Okay. Fine. Fine. And we're the same age. Same age. Okay. Yes, sir. All right. And Harold, just call me Chris. Okay, Chris. You can't stop it. I, sir. All right. And Harold, just call me Chris. Okay, Chris.

You can't stop it. I understand. You're right. And what has caused you to start thinking about all this, Harold? Well, I've been listening for off and on a year or two ago, but then the last month and a half, I started listening more and more. And it seems like everything that we've done has just been wrong over the years. You know, we're pretty conservative, actually. We've had two big financial hits in our life,

and it changed our life both times, but we made it through it. And with the grandchildren now and different things, and we paid off college for my son. Got him out of the way. What were those two big hits? Well, again, I've got my grandchildren, so I ought to give you an indication. And then my son,

I paid his college. That was a pretty big hit. $60,000, a matter of hours. Yeah, it is a big hit. I like that. Do you guys have any other debt outside of the home? Absolutely not.

Okay. No vehicles? I drive Dieters. Okay. Always have. Okay. Never have a problem with that. All right.

And I'm going to tell you, Harold, looking at this, I love the idea of paying off the house. I don't like the idea of pulling out money from your future in order to do it. And I say that because if push came to shove, if we're just going to be real, and I'm going to, I'm a fellow Kentuckian as well. If push came to shove and you had to sell that house, you can sell that house and have about $70,000 or $80,000 in equity. Now, I'm not saying you want to. I'm saying if you had

to. Now, I would say pulling money out of that IRA, this is an all-in moment on just the home. I don't like that. I don't like that. I've been here 33 years. I understand. I'm glad to know that this is the house y'all plan to stay in, but I don't like that. I've been here 33 years. That's right. No, I understand.

And I'm glad to know that this is the house y'all plan to stay in. But I don't like the all-in moment of pulling money out of the IRA. Now, in looking at this, I do want you to do this, though. I do want you to get connected with a SmartVestor Pro because you mentioned something that is very vital and important to think about. The whole aspect of Social Security. See, the timing of that. You know, the longer you wait, the more you're going to make. But it also limits you in how much you can make when you start taking Social Security.

So this may be something that you want to hold off on for another two, three, four years as you guys get more serious in saving for the future and attacking the home. So this is about timing. And you're right. You've had some big hits. You took care of your son's college, and you've got your grandkids now. You've taken care of family. And guess what?

Harold, the past is in the past. Now you're here right now. So what's the next step? So I do want you to get connected to a SmartVestor Pro. You can go to DaveRamsey.com and click on that and find a SmartVestor. I want you and your wife to go in and sit down, and I want you all to develop a plan for the next 5, 10 years of your life. And it's amazing. When we start to see these end lines and these goals, we don't mind making more sacrifices.

And what I found is we actually start running a little bit faster because we have clear goals and we've got a clear plan. Those things will keep you focused. Harold, thank you very much for your call, my friend. It was good to talk with you. Next up, I've got Stephanie in Virginia. Stephanie, how are you? I'm good. How are you doing? Oh, I'm doing pretty well. How can I help you? Yes. About 12 years ago, my husband purchased the house. We have two mortgages on it, and one loan is actually going to be burning in two years. That's the way they made him have him set it up because he's commission-based. But the house is actually worth less than what we owe, and our payment is about 27%. I know it's over what Dave Ramsey says of our income. I don't know what we owe and our payment is about 27%. I know it's over what game Ramsey says of our income. I don't know what we should do. We try to refinance like three years ago and got declined.

That's how we found out the house was worthless. Okay. So when you tried to refinance, did you get declined because of the value of the home or because of your financial situation? Value of the home. Okay. We needed a total of $140,000 at the time, or $144,000. And at the time, the house only appraised at like $127,000. Okay. So tell me about these two mortgages. How much is the first mortgage on this? First mortgage is $108,605.80. I know I just said that wrong.

It's okay. But 109. Okay. And the second one? About 19. Okay. All right. And so you got an appraisal three years ago?

Yeah, about going on three years, yeah. Okay. Is this you all's primary residence? Yes. Okay. And this is the only property you all own? Yes. Okay. And this is the only property you all own? Yes. Okay.

What's your household income? I always get confused. Are you guys asking me for after taxes and everything? Yeah, that's fine. So it varies. Like I said, my husband's commissioned one paycheck. He can have a great one. What did he make last year?

What did he make last year? What did he make last year? When it comes to when we did our taxes, it was like $70. Okay. All right. And are you working outside of the home? I am not. I'm a stay-at-home mom to two wonderful kids. Okay.

So looking at this, and you guys are living there, you plan to keep living there? For now, yeah. I mean, this isn't like a forever home. We're all kind of growing out of it. But for now, yes. How much square footage is it? I want to say a thousand. Okay.

Yeah, about a thousand. Like I said, we're growing out of it. We have two kids. Right. Well, kids are little. Yeah, they're little. Kids are little. We have two kids. Right. Well, kids are little. Yeah, they're little. Kids are little. They're little now.

Yeah. That's what I'm saying. If we move out, it's going to be years down the road because we want to purchase land and build. But again, that's when we're out of debt and down the road. All right. So outside of this mortgage, what other debt did you all have? We have a credit card debt and student loans, uh, student loans, but the student loans is in

full bearance. So it's mostly just credit card debt that I'm paying on right now. Okay. All right. Well, I'm going to say this, Stephanie, you know, from where you all are right now, not being able to refinance means you're going to have to stay focused and pay this thing down, right? You're going to have to just buckle down, sit still and pay it down. The

appraisal from three years ago, the home value is going to increase, but you guys borrowed on this. You stole from your opportunity to be able to move forward. So now we've got to clean up the mess. Got to sit still and get focused and more in tune with what you're doing. This is the Dave Ramsey you are listening to the dave ramsay show i'm chris hogan filling in for dave and boy we've had some fantastic calls. Listen, we want to hear from you. If you've got a money question on your mind that you've been wondering about, you go, you know what? I want to know.

I want you to call us. The number to call is 888-825-5225. Again, that's 888-825-5225. We'd love to hear from you. And if you prefer to find us on social at Ramsey show or at Chris Hogan, three 60, you can send us your questions that way as well. All right. I got to get back to the phones. I've got Chris here on the line. Chris, how are you? I'm doing well. How are you? Oh, I'm focusing on finish my friend. How can I help you today? Uh, yes. Uh, my wife and I have been having some financial trouble and I went out and I bought Total Money Makeover. I read the entire book yesterday, and I was trying to set up a plan for the baby steps. And he talks about the different kinds

of insurance that you need to have. Yes, sir. But some of them can get kind of pricey. And so I was wondering if I need to get all of those, but have to sacrifice my disposable income that can hack off my debt. Okay. So in looking at that, number one, I'm proud of you that you went out and you got the book and you read it. What caused that to happen? Well, the financial troubles in a marriage led to like a bunch of other troubles. And, you know, I've been in charge of the budget and it's been my fault.

Okay. So I'm going to go out there and I'm going to fix it the best way I know how. Okay. All right. How long have you been married? I've been married four years. Okay. All right.

And so there's a couple of things. I'm glad that you read the book. That's absolutely fantastic. Has your wife read it yet uh no uh her and the kids are visiting with family i bought the book and we were going to talk about it when we get back that's part of i was setting up anything so i could tell her about it no no no and i like that because see you said something you had handled the budget prior and when it didn't go well, you got all the blame. Okay? And so the problem is you all had a pronoun problem.

You were doing I and me. And I want you all to speak French. I want you to do we. We do the budget. Right? And then we get it right. And we regroup. You see what I mean?

It's a different mindset as you're working together and it's a team. So love that. So when she gets back, I want you to tell her the stories. Let her read it. You guys have a conversation. But I'm going to tell you this. There are insurances you need to have sooner and some are okay for later. Chris, how many kids do you all have?

We have two kids. Okay. And do you both work outside of the home? No, my wife doesn't work currently and I'm in school. Whoa, whoa, slow down there, Chris. Is she a stay at home mom? Yes. As of right now.

Okay. So she works in the home. Yes, sir. Yeah. You said she didn't work. I'm trying to help you. Otherwise you're going to be at my front porch with a backpack wanting to stay with me. Okay, behave. Don't get in trouble. Now, she works in the home, you work outside the home. And I'm saying that because life insurance, term life insurance is

absolutely imperative. That's the thing I want you to get put in place ASAP. Because life insurance is how you say I love you to your family. Because if something happens to her, my friend, you're going to have to change the way you work because of the kids. And if something happens to you, she's going to have to change. So that life insurance is imperative. You want to get 10 to 12 times your annual income. And so your household income is how much right now?

About $50,000. Okay. So you're going to be looking at around $600,000 in term life insurance. Okay. And so you can go to Zander INS and get a quote on that. You want to get that in place immediately. Now, there are some other things in there that we talk about that you can get in place. And you'll see those in the book talking about long-term disability and things of that nature.

And you can work through. But tell me this. The term is first and foremost, what debts do you guys have? Besides our home, we have about $60,000. Okay, what is that 60? Credit cards. Cars? Yes, we have two car loans, two high credit cards, and a loan we got out for some flooring for our home.

Okay. Tell me about the cars. How much is the loan? For both the cars, we have one that we have about $9,400 left on it, and we have another one that's about $5,700. Okay. All right. And then the credit cards? The credit cards together are about $5,700. Okay. All right. And then the credit cards? The credit cards together are about $21,000. How many cards does that mean? Is that three, four, twelve? How many? Two. Two cards. Okay. So you guys have been using the credit cards to supplement your lifestyle?

Yes, sir. Yeah, I know. Okay. And so as your wife gets back and you guys start talking about this and looking at it, it's really important to identify the problem, right, as you start to move toward the solution. But I'm going to tell you, Chris, the big thing is looking at this and realizing what have we gotten? What has doing it our way gotten for us? Where are we? Do we like this? Do we like this feeling?

And when you look at it and you go, I don't like this. This isn't working. That's when you decide to make a change. And I love that you dug in and read the book. I mean, that fast. That tells me you're very motivated. Now I want you to come back and get your wife excited. Let her read that as well.

And you guys start to develop a plan together. But in looking at this, that term life insurance, from an insurance standpoint, that needs to be in place ASAP. And so it's going to take four to six weeks for that policy to be what's called full and in effect. And just in reality, they'll come and get fluids and you'll submit some paperwork and it'll take some time. But in four to six weeks, you'll have that in place.

And so it's very, very important. And if you're watching on the YouTube channel, they just put up a graphic of one of Dave's articles talking about life insurance. And I can tell you, as a financial coach, I have run into people that did not have life insurance in place. And I'm going to tell you something. When they have a situation inside of their home or they have a loss, now you've got all of that financial strain, all of that financial stress on top of the emotional strain and stress of a loss of a loved one. And I'm going to tell you, it's a compounding situation that doesn't have to happen. And a lot of people out there are reluctant to get life insurance in place because they say, well, Chris, I don't want to do it because then something might happen. Really?

Okay. What if something happens and they don't have it in place? Now think about what your family is going to have to do. And I've bumped into people, I'm telling you all, that have had to sell homes, talk to widows and widowers that have had to take on two and three jobs trying to make ends meet, and they could have just simply gotten term life insurance in place. So hear me. And I had to pause for a minute because some of the stories that I remember sitting across from people from brought tears to my eyes. It broke my heart. It did. And you always think hindsight's 2020. Well, in reality,

in that type of situation, you don't have an opportunity to go change anything. What's done is done. So hear me. If you're listening and you don't have term life insurance in place, get moving. Care enough about your family to get it in place. And even if you have a stay-at-home parent, that person needs to have term life insurance coverage as well. Because, God forbid, if something happens to them, you've got to change the way that you work. So, again, that mindset.

And you go to my website, ChrisHogan360.com. I've got several articles on there talking about life insurance. And it's really, really important. It's a glaring hole that I see as I travel around and I talk with people. And so you have an opportunity to fix it by simply getting that quote. All right. Okay. Let's see if we can grab one more call here. I've got Dennis on the line in Kentucky. Dennis, how are you? I'm hanging in there, Chris. How about you? Oh, I'm focused and not finished my friend.

What's on your mind? All right. Well, I just drove the wheels off of my $1,000 car. It lasted me a good couple of years. I love that car. I want to find another one like it, but I don't think I'm going to find another one just like that in town. My luck with these $1,000 cars is not so great. I have $7,000 in the bank. That's not including my emergency fund. All right. I have $38,000 left to pay off. I would love to throw it all at that debt, but I have my eyes on a 2014 car here in town that's got 180,000 miles on it, but I've had a mechanic come take a look at it. It's a $5,000 car.

He says it's solid. It should last me, you know, four or five years at the very least with very little maintenance. What would you do? Okay, well, I'm going to tell you what I'd do. If I got $38,000 in debt, I'm going to go get another $1,000 car

and I'm going to write some checks toward that debt and be ready to roll. Listen, Dennis, you've been here. You've done this. Stay focused, my friend. Stay focused. You're not finished. I want to thank all the callers for taking the time to call in. You're not finished. I want to thank all the callers for taking the time to call in. Thank you very much.

I want to thank James Childs, the producer, for making this show happen. I want to thank all of you for listening. This has been The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.