The Ramsey Show - App - Don't Solve a Short-Term Problem With a Long-Term Disaster (Hour 1)

Episode Date: March 16, 2020

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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 don't know if you guys heard or not, but we're in the middle of a coronavirus, a pandemic, I guess. I was about to say epidemic and understate things again like I've been known to do. Yeah.

I'm a glass half full, abundance, anger based person. Some people are glass half empty, scarcity based, fear based people. And you need both in your life because it keeps things balanced. Sharon's more of the scarcity, fear-based, security-oriented, and I'm just like, yeah, get it done! And so I tend to underreact to these kind of things, and she tends to overreact to these kind of things, and you're one of the two probably as well, more of an optimist, more of a pessimist.

You need both. You need both in this world. You need both in your life. You need to have attributes of both if you want to have wisdom. And so some of you are completely going crazy and overreacting and hysterical. And some of you are underreacting. Me, as an example, I underreact all the time to this kind of stuff just because I refuse to be fear-based. It drives me nuts. And so I get angry instead.

I just want to punch this thing in the face. And you people that are fearful, you just make me angry because i was already angry so and fearful people then with their angry people around they get even more scared it just is a dadgum mess and so here's what happens though so i'm driving to work this morning and god says i'm going to give you a metaphor i I drive a big old Raptor, one of my cars, and I drive it really fast all the time. And so I'm whipping in. There's not much traffic because it's spring break and coronavirus, and it's coronavirus. And so I've got the interstate to myself just about except for a couple people in my way, which is some of you people are in my way.

And so I'm whipping around, and I get ready to change lanes, and I didn't see this poor little prius over there i just about ate a prius and he's honking and swerving and my my uh whatever you call this navigation stuff's going off and screaming and you know in an instant i realized he was there and of course this raptor is a big butt truck up on these big old tall wheels. I whip to correct back into the lane. My heart is beating so fast. I mean, I almost killed that guy. Me too, probably, you know.

And he'd been wishing for a virus that he'd run over him. You know, I mean, it terrified me. Y'all know what I'm talking about when you almost have a car wreck and you break out in a cold sweat right after that i just about and then when i whip to correct back to the other lane i over corrected in my fear and almost t-boned the wall how many i talked to a state trooper friend of mine. He said that people overcorrecting flip cars and cause worse wrecks oftentimes than if they'd have just hit the car. Because when we get terrified, we have a tendency to overcorrect. When we get angry, we have a tendency to overcorrect.

Some of you out there right now are overcorrecting. Yeah, I just about had a wreck. It was a real threat. There's a real threat out there right now. But toilet paper? I have read several articles on this virus, and I don't see dysentery as one of the symptoms. Toilet paper? Really?

Nowhere in any of the articles I have read does it say that the water system is going to get destroyed why are you people buying out all the bottled water why aren't you buying alcohol if you're going to have a party i mean cases of bottled water i do not i mean it's so that tells me you're over correcting you're freaking You're freaking out. That's what it tells me. And I do it too. I did it this morning. My heart was beating. My stomach was up in my throat. I was cold and clammy.

Y'all already know the physical effects of fear or anger? You know, they're about the same, by the way. We just choose to name them fear or anger. Psychological study indicating that. Something to think about, guys. Don't overcorrect. so if you have a real thing don't hit the car but don't hit the wall on the other side right and so if you got a real thing hey you're a restaurant worker you're an airline worker you work in a hotel uh you got a real

problem right now you're getting ready to have no money coming in and you got a real thing there's a car in that other lane but don't over correct and cash out your 401k just go get some part-time work and and stop your stop your baby steps just pile up cash if you're in the middle of baby step two and you have a real thing there's a car in that other lane you're about to hit them don't over correct and hit the wall and cash out your 401k just tighten up the budget look and say okay what can we not do which is most of the crap we were doing and let's take care of the four walls of our house food shelter clothing transportation and utilities let's dial this back in and weather this storm but if you over, you'll T-bone into the wall on the other side because you became angry or afraid. You're glass half full, glass half empty, fear-based, anger-based.

You're an optimist. You're a pessimist. Scarcity or abundance, you can put it on whatever spectrum you want to put it on, but you're still going to end up analyzing these things through your natural default mechanism. And I just told you what mine was. I admitted it right here in front of 18 million people. And so don't overcorrect. You take care.

There's two things you got to do right now in the middle of this. Number one, you have to keep your perspective. And the way you keep your perspective is where will house prices be next fall? Where will stock prices be in the stock market this time next year? Do you really think corona is going to affect either one of those 12 months from today? If you do, that's just really foolish. That's really foolish. Is it going to affect them in the short term? Absolutely. It already has. It already has. But you're not a day trader. You're an investor. You don't need the money right now anyway. You're just freaking out.

My friend Glenn Beck told everybody pull their money out of the market this morning. Glenn, shut up. Stop that. I love you. You're stupid. Don't do that. We've been friends a long time. I could call him stupid. He calls me stupid too, by the way, so it's okay. It's a friendly stupid thing, frenemies. So anyway, yeah, don't do that. Don't take your money out of your stock market. And don't overcorrect and hit the wall because you almost hit a Prius in the other lane. Don't overcorrect and quit your job because you're afraid that people at your job didn't wash their hands. That's stupid. Because, by and large, this is not a fatal virus unless you are a person of at risk due to medical conditions or age okay you

know this and uh by and large this virus hates heat and so as soon as it gets to 70 80 degrees in your area things gonna be gone all the medical people are telling you this i talked to get dr manny up at fox the other day i was up there doing morning show and he's sitting in the green room we're yakking about it he said july it'll be over probably june it'll be over most places in tennessee it'll be may because it also hates um uh humidity and we've got humidity baby we import humidity we export humidity yeah we got some humidity here so uh you're gonna be okay you're gonna be okay you're gonna be okay now you may need to tighten up on the short term you may need to be okay. You're going to be okay. Now, you may need to tighten up on the short term.

You may need to stop your baby steps on the short term if you've got a job problem. That's a reality. I've got no issue with that, and I'm not going to mess with you or call you a wuss or something like that for that. You've got to take care of business when you've got business to take care of, baby. But don't freak out and destroy your long term because you've got a short term problem. Don't solve a short termterm problem with a long-term disaster. Don't do that. Leave your money in your 401K.

Get some extra work. Get your budget down to the four walls, food, shelter, clothing, and transportation. Don't overcorrect just because your heart rate went up and you're terrified like I did this morning. This is the Dave Ramsey Show. We talk about it daily. Character matters. When I'm looking for team members, I'm looking for men and women who have character. People with character care.

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Open phones at 888-825-5225. Mike is with us in Michigan. Hey, Mike, how are you? Hey, I'm doing better than I deserve. Dave, thanks for taking my call. My honor, sir. How can I help? Well, I got a question on how to attack a morgue. He's just been hanging around

my neck like an old albatross since around 2000. I went through a separate divorce on that, but anyway, I wanted to keep the house, and I was debt-free up until then, but I want to know how to attack this more. You can get it paid off effectively. And I just want your opinion. I'd like to get your opinion on how to attack it. I've got a money market that I've been kind of, you know, put money in over the years. And I've got, you know,

some IRAs as well. But I'd like to know, do I take some money out of my IRAs and my money market, or do I just stay with the money market and get it done? I owe about $63,000 on it. How much is in your money market? A little over $200,000. $100,000? Yeah. $200,000 is in your money market?

Correct. Well, write a check and pay off your mortgage. I'm sorry, say again? Write a check and pay off your mortgage. Okay. All right, I just didn't want to, you know, get it depleted too bad, you know. Well, you're at $140,000, break my heart. Well, okay.

I just didn't know if I should maybe take some out of my retirement. No, no, no. Take it out of that money market. And listen, if you hate not having a mortgage and you're scared with only $140,000, you can go take out a mortgage later, but I wouldn't do it. Okay, yeah. I just wanted your opinion on it. Yeah, it's Monday, and by the end of the day, I would be debt-free if my name was Mike in Michigan.

All right, Jeremy is with us in Tennessee. Hi, Jeremy. Welcome to the Dave Ramsey Show. Hey, how's it going? Better than I deserve. What's up? Well, I have a delivery business, and I rent the van I use for my dad, and I pay $800 a month for that. But I can't, since I'm just paying it straight to my dad, I can't get a tax.

I can't get deducted from my tax. $800 a month? Yeah. What kind of van is this? It's a 15 passenger um it's a ram uh 3500 okay so so your dad bought it for you to use um he's had it for a while but once his job came up i made a deal with him and also the 800 also includes insurance as well. I see. Okay. So my question was, would it be better if I bought a van and lowered the payments?

And I looked into it, and I could also get – if I bought a van, I could also use that in my tax. Well, never make business decisions for taxes. Make good business decisions and then take the tax write-off that it creates, whatever that is. But don't go, oh, I did this because of taxes. That almost always indicates you made a bad call because it means you ignored other things that you should have been looking at. So we're not doing this for taxes. We're doing this to, I got to get rid of an $800 payment and I can get a $500 payment and own it and do the same job or a $400 payment or whatever. How much money are you making?

I make, before taxes and everything, about $50,000. $50, 000 a year so 4,800 bucks a month plus uh minus taxes minus 800 minus fuel and repairs yeah so you're making 30 yes okay i'm not sure i would go into debt matter of fact i'm positive i would not go into debt to own a business that made $30,000 a year. And by the way, it doesn't make a dime if you don't drive it. And so you don't really own a business. You own your job is all. So what's the van cost?

My dad paid for it used. I believe he paid $ 7,000 for it. $7,000. Yeah. You got it. He got a good deal for it. Why is it $800 a month then? Um, because he really likes the van and he doesn't like putting miles on it.

And, um, so you could buy the same van for seven thousand dollars uh i don't know if i could find one like that i'll bet you could right now okay there's what i mean like people are freaking out and this is a great time to buy stuff if you had money i don't really want you going i mean i know i don't want you going thirty thousand dollars in debt for a thirty thousand dollar a year job i i'm not sure i want you going, I mean, I know I don't want you going $30,000 in debt for a $30,000 a year job. I'm not sure I want you going in debt at all for a $30,000 a year job. But if we could get you away from an $800 payment, it sounds like you'd have a $100 or $200 payment. Yeah.

Yeah, that's a move you want to make. To heck with the taxes. That's a $600 swing a month. I mean, we're talking an 80% swing in your profitability here. Yeah, yeah, Dad likes his van way too much. And so I'm going to let him have it back since he likes it so much. And go get you another one. That's what I would do.

Hey, thanks for the call, man. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. It is a free call. Nancy is in Alabama. Hi, Nancy. How are you?

Hi, Dave. Thank you for taking my call. Sure. What's up? Well, my husband and I, we are in the process right now of trying to buy a retirement condo in Florida. Cool. And we were going to pay cash. Cool.

And, of course, in the last week, we have lost about $500,000 in our portfolio. No, you haven't. You didn't sell it. Well, that's true. The value went down, but you didn't sell it, which tells me that you've got a million dollars, right? Or $2 million. You've got $2.5 million. Yeah, we were actually on your millionaire female a few months ago.

Very cool. Congratulations. So how much did you have in the market? We had a net worth of about $3 million. Yeehaw. How much is the condo? $250. Oh, awesome! I love this!

And what's your question? Well, I guess my husband's getting a little bit of a cold feet. He's not sure if this is the right time. Oh, this is the right time. This is the best possible time. Okay. And lowball your offer. Because you is the only one making offers on retirement condos in Florida, right, darling?

Everybody else is standing on the side of the road looking like a deer in the headlights wondering when they're going to get hit by a truck. This is the time to buy crap like this. Absolutely. Get you a deal, though. I mean, what it was worth a month month ago it's not worth right now because you is a cash buyer closing in the middle of virus city take advantage of this crazy time right there's got to be some good come of it right well yes i'm i just want to make sure when they came

to write decision well here's the here's the thing the question you ask is not the way you answer the question the reason i'm so sure is this. Where is that condo going to be? How old are you? How old are you? I'm 50. My husband's 52. Oh, you're youngsters. Okay. So where is that condo going to be

in value when you're 70 and still enjoying it? Would you regret this decision then? Under what scenario would you regret this decision under what scenario would you regret this decision then um i i don't think i would i don't think there's a single economic scenario short of total collapse and china owns the u.s and we're all having to learn new languages i mean the entire economic collapse would have to occur for this to be a bad decision 20 years from today. There is no 20-year period in American history in which this would have been a bad decision.

That make sense? Yes. And that's the way I'm looking at it. And so all this angst that everybody's feeling right now, when you're sitting on $3.5 million, this is when you expand your fortune. You get a $500,000 condo for $300,000, and you close on it in like 30 minutes. We'll close on it Friday with cash, but I want a deal. And they're going, I'm so scared. I know, I know.

I'll soothe your fears. I'll close on it Friday. I'm so scared. I know. I'm going to buy your condo. You don't have to be scared. You are in the driver's seat, baby. You're holding aces, all aces.

This is the Dave Ramsey Show. If you do this one simple thing that we all do, you are literally at risk of being hacked and someone stealing what you've worked so hard for. Do you ever use public Wi-Fi? I'm talking about getting online at a coffee shop, a store, the airport, or even at home. Hackers can use a simple $100 device to mimic Wi-Fi, and with just a little bit of skills, they can take over your financial life. This means you may think you're on your bank's site or app or securely making that purchase online, but hackers could see and steal that information.

That's why I trust CyberGhost VPN. CyberGhost thinks about cybercrime so you don't have to. You can try it for free for seven days, protect up to seven internet devices, and keep all of your internet connection secure. That's CyberGhost VPN. Download it today from your app store and be secure in seconds. in the lobby of ramsey solutions on the debt-free stage travis and shelby are with us hey guys how are you better than we deserve dave i love it where do y'all live orlando florida fun fun good for you well welcome, welcome to Nashville. And all the way up here to do your debt-free scream. Yeah, we got a nice coronavirus plane ticket discount. I bet.

So how much was the ticket? It was like $90 round trip for both of us here and like $50 round trip home. Wow, I love it. Very cool. That's a good buy. Yeah. Very good. And Nashville's empty, so you're going to enjoy it. Yeah. All right, so how much have you paid off? $121,204.82. Wow, and how long did this take you? 33 months. Good for you. And your range of income during that time? We started at just Shelby's income at $50,000 and we worked

our way up to $175,000 last year. So you joined in. I did. So the $121,000 in debt, what kind of debt? All student loans. All? All of it. Wow. So tell me the story. What happened 33 months ago that got this started? Well, it started, you were introduced to me by the guy I was living with in college. I was renting from him. He was an old cheer coach. And so I took that information and I loved it right away. I always hated debt as it was. I thought credit cards were stupid.

And so then I told Shelby that this is exactly what we're going to do. And we weren't even married yet. And I'll let her tell you how well that went over. I said no. No way. No, we're not getting married if you're going to act like this. And so then we eventually moved down to Florida. And after we both graduated and I'm driving home.

I got a teaching job. I'm driving home one day and you say, you guys are acting like you're married. Why don't you just get married? So I was like, that's exactly what we're doing. We're acting like we're married and we're not married. So that very next day I went and bought a ring. Oh! I was listening to the podcast.

And this time she said yes. Yeah, she did um and um after we got married uh that's when we really started to kick it into gear when we were okay now what what happened on the she got she had the job and you didn't thing and was that like right after college you got the job is that what you're talking about yeah so i graduated first so i had a job okay and then when he moved down so what do y'all do for a living i'm an occupational therapist and i'm a teacher okay so now once you got married and you got this great income what was it show me you said okay let's let's let's do it let's get out of that what made you come around i think really um seeing how much i made and then still not having money. That's frustrating.

Yeah. You also said a few days later, I don't know, after I told her what we're doing, you said, no, you're approaching it all wrong. You've got to focus on the why. She doesn't want you to come in and tell you, oh, we're doing this, this, and this. She wants you to understand, or you need to make her understand why. Dream together.

And that's what really got her on board, I think. Yeah. Very cool. Way to go, you guys. Wow. How old are you two? I'm 27. And I'm 28.

And you are debt-free. No student loans. That's right. And Elizabeth Warren didn't pay them off. You did. No. Yay. Way to go. I'm so proud of y'all yeah yeah who were your biggest cheerleaders

um probably other than each other probably my sister we uh when i got all gung-ho about this a couple years back i was telling everybody about it and most everybody was like oh you're that guy yeah yeah i love you by the way and uh most everybody's just shutting me down and uh my sister was like well you know what you're this is actually probably good information and uh then she's competitive so she's like i'm not letting you pay off your loans before she's older than me oh that's good did she get her done yeah she she finished uh probably a year or a year and a half before we finished but she had an eight-year head start so i always reminder of that okay so you're 27 28 year old millennials and you know i'm big fan of millennials if you listen to this show and you paid off 121

thousand dollars in 33 months you got to know that as people within your age group or people within any age group, that that's very, very impressive and very unusual. What do you tell people the key is? Because you've done a very unusual and wonderful thing. How did you do it? I mean, the first thing for me was just to not compare myself and where we are in life with other people. Because when I first said no, I was like, I want to travel. I want to experience all these things that people my age do. And so really thinking together about what our future is going to look like instead of what I want right now to look like. I think I've never had to sacrifice as much as I thought I was going to when I started

this, nor as much as I thought I could have. And I think it set me up through so many other areas of my life just to be like, you know what? I did that. This is nothing. I can do a workout plan for a month. I went 33 months without going anywhere. So I was working every night.

There you go. Very cool. Yeah, there's something about discipline begets discipline. And there's something about once you learn that if you live like no one else, later you can live like no one else and give like no one else. Once you get that dialed into your emotions, that ability to delay pleasure, it applies to life well. It really does. You guys are very impressive. I'm so honored to meet you. Yeah, very, very well done. We're honored to meet you, too. Well done. And thanks for braving the coronavirus craziness and coming up here from Orlando to see us. And we really, really appreciate

you joining us. Very well done. We got a copy of Chris Hogan's book, Everyday Millionaires, because you are on your way, baby. Yeah, that's right. Less than a decade, you'll be there with the numbers you're giving me. You're on your way. Yes, hopefully. Yeah. I love it.

Very cool. Very cool. All right. Travis and Shelby, Orlando, Florida, $121,000 paid off in 33 months, making $50,000 to $175,000. Count it down. Let's hear a debt-free scream. Ready? Three, two, one.

We're debt-free! That's how it's done. Done with style, baby. I love it man that's just fabulous right there so beautiful so well done our question of the day comes from blinds.com where the satisfaction guarantee means even if you mismeasure or you pick the wrong color they'll remake your window blinds for free amber in north carolina dave my father recently passed away in November. I'm so sorry. At the time of his passing, he and my aunt had taken out a loan together of $160,000. My aunt co-signed the loan. His mother and sister are now trying to push this loan off onto myself and my two siblings. 23, 20, and 18 respectively.

My father did not have enough funds to create an estate. Are we legally responsible for this loan? Being that there is a cosigner still living. You're not legally or morally responsible. And tell your grandmother and your aunt that I said so, and they go be grown-ups, they co-signed the loan. You didn't. You did not get an estate. If you got a million dollars in a CD, yeah, you go back and clean this up to help the family out, but you didn't get nothing. And debt is not inherited unless you're dumb enough to co-sign it, like his sister was. So she inherited the debt.

Yet another reason not to co-sign a loan. So no, you are not liable 23, 20, and 18, and the grandmother and the aunt are trying to dump it on you guys. Somebody needs to be smacked in your dysfunctional family. No, no, no, no, no, no. You do not pay this loan. You're not morally, certainly not legally obligated under any circumstances well i guess under circumstances that you didn't outline here but um if you

promised you were going to do it or uh you received a million dollars you have to go back clean up the 160 that'd be nice but you're you know you got nothing you said he left no estate. He didn't have any money. And you're supposed to take on his debt. Uh-uh. This is the Dave Ramsey Show. Thank you. So one of the things we found in our research when people are investing is that people who have a high quality broker in their corner, like our SmartVestor Pros, that teach you. And in crazy times like these, when some of you become very, very fearful and others become too greedy, your SmartVestor Pro talks you off the ledge in either case and says, no, just stay the course. Ste says no just stay the course steady wins the race

steady wins the race steady wins the race no one gets hurt on a roller coaster except those that jump off steady wins the race yes this is a buying opportunity it's definitely not a selling opportunity because where will the stock market and the economy be one year from today do you think that the coronavirus is going to completely destroy the United States of America? That's asinine. Of course not. Of course not. Now, are some people hurting? Yes. Are some people sick? Yes. Are some people going to go out of business? Yes. Are stocks going down? Yes. But it is not a permanent condition. It is a temporary condition. And so you that are wise investors do not play temporary conditions. You play the long haul. You play for the long ball. You're reaching out into the future saying 15 years from now, 20 years from now,

how will this situation look? And you got a smart SmartVestor Pro to talk you off the ledge. So if you need some help with this, just jump in at DaveRamsey.com, click SmartVestor, and find the SmartVestor Pro in your area. There's two or three of them. You pick the one you want and sit down and get some really, really, really good advice. So in 2008, when the market crashed, it didn't really crash. A crash would mean it was gone, it was over. You got nothing.

If anyone says to you, I lost all of my retirement in the stock market in 2008, mathematically speaking, they are a liar. Emotionally, they felt like they lost it all because they lost a bunch. If they bought at the top and sold at the bottom, I buy high and sell low because I'm functioning on fear. You know, this is what people do, right? So if they did that, but listen, here's the numbers, okay? The Dow was at 13,000.

It went to 6,300. It basically went in half. And where did it go from 6300 in 2009 late 2008 where did it go what was the peak just a few weeks ago in january 30 000 what's 6 000 divided into 30 000 five a million dollars then turned into five million if you wrote it out. So you start it with a million, it becomes a, or you start with two million, it becomes a million, and it turns into five million if you wrote it out. That's your 2006 to 2020 January scenario. If the market simply returns to what it was in January by the end of the year, every dollar you put in right now, you would make a 41% rate of return on. How awesome would that be?

So you think long term. You have to think long term. If you're not thinking long term, you should not be in the stock market. It's not a savings account. It's an investment. It's not something you play with day in and day out. I almost never sell a mutual fund. The only time I ever sell one is if it is really dogging compared to the other funds in the same category. In other words, I got a bad one, and I'll take that money and redeploy it into another one. I'm continually putting into the stock market millions and millions of dollars,

and I haven't lost a dime because I haven't sold any. And so when it goes down, I understand you can be afraid. But if you've got someone to talk you off the ledge, all the data tells us, all the data points tell us that when you have a good broker in your corner you make a much higher rate of return on your portfolio and the main reason is they keep you from doing stupid stuff when you're emotional it's not that they really do all that much better than you would have done on your own except they just keep you from going crazy when you're crazy and we all need a little of that sometimes sometimes it's a little of that sometimes.

Sometimes it's a 30-second conversation. Sometimes it's simply an email reminding us of historical data so we don't jump off the dadgum ship, you know. Stay in the deal. Stay in the deal. Stay in the deal. And a smart investor pro in your corner makes all the difference to be able to do that. And so be sure you're thinking that way.

Corey is with us in Pennsylvania. Hi, Corey. Welcome to the Dave Ramsey Show. Oh, hi, Dave. How are you? Better than I deserve. What's up? So I just started recently listening to your show,

and thank you for the time you take to give out such sound wisdom. I really appreciate that. I bought your book, The Total Money Makeover. I completed Baby Step 1, and I'm in Baby Step 2, and I just want to kind of figure out my debts here. I got the snowball idea down, so all my debts are in collection except for one small medical bill and my student loans, and I also have a lawsuit against me, a judgment, I should say,

from a credit card debt collection agency. And I can't even make enough. I can't even keep up with the interest rate on the payment, and I just want to know how to handle that. Are you paying payments on that judgment? I have not because I kind of went into uh scumbag status if you will and decided not to pay my debts and then when i heard your show god kind of pricked my heart and you said this man's talking some stuff in your life corey are you paying payments on the student

loans right now uh it's in deferral right now okay i. I just got into Baby Step 2, and I'm just getting everything situated. Okay, good. And how much is the lawsuit for? $5,000, right around $5,000. And what's your household income? $35,000 a year. And how long has the lawsuit been laying there? This was that I received the judgment on that at the end of 2018

two years okay no one year one year and some change okay um and how much is the student loan debt uh just a little over eight thousand dollars okay. Okay, good, good. All right. So like $15,000 sets you free, right? That's right. So $1,000 a month, yeah, $1,000 a month side job, even if you spent what you're making now on living, $1,000 a month side job has you 100% debt-free in a year, right?

Yeah, it sounds right, yeah. Yeah, 1,000 times 12 yeah you're there baby you got this okay cool good god i'm excited for you this is good times all right so i would uh leave the student loans in deferral and i'd take care of that little medical bill first the second thing is i would save up two thousand dollars cash very very quickly i want you to do this real fast then i want you to, set a judgment and say, I was talking to my financial coach and he said, even though you're broke, they might work with you because they might rather have some money now since they had never gotten anything. So I don't have any money, but I got $2,000. If you want to take that

as settlement in full, remember that phrase. If you want to take that as settlement in full, we'll do a deal right now and you'll probably be able to settle it for somewhere around that. Okay? Awesome. Now, you're going to have to argue with them, and they whine, and they roll on the floor and foam at the mouth and all this crap. But you've got to go through the little drama, right? But you'll get there with the negotiation back and forth.

And always blame it on your financial coach who said this was the thing, because I'm your financial coach, and I just told you that. So it's a true statement. Okay? And tell them your financial coach said you weren't allowed to go any higher than that because you're too broke and you only make $35,000 a year and you've got all this student loan debt and this is just like a one-time, good-time deal, so take the money while you can fast.

Kind of mess with them. You following me? Yeah, yeah. Now, two things to remember. Get it in writing, the deal. Got it. If it's not writing, it things to remember. Get it in writing, the deal. Got it. If it's not in writing, it didn't happen. You can tell credit card collectors are lying if their mouth is moving.

Get it in writing. If it's not in writing, it didn't happen. It was a myth. And it needs to say, this amount settles this account in full. You keep that piece of paper hard copy the rest of your life. Okay? Okay. And the second thing is you keep proof of the payment that you make

the rest of your life. And so the second rule is no electronic access to your checking account. Because if you tell them $2,000 but you've got $3,000 in your account, they'll clean your account out and then you'll not have the money for your rent. So get it in writing and no electronic access to your checking account. You can wire it to them. You can do a prepaid debit card off a different account. You can do stuff like that, but no electronic access to your main account

because they lie. Okay? Then once you clear that up, then call the student loan people and get on a payment plan and plow your way through that. Get an extra job. Get on the every dollar budget. You've got this, dude. You've got it.

You can do it. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. You can now listen to the Dave Ramsey Show on Spotify, Pandora, or anywhere you listen to podcasts. For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.