The Ramsey Show - App - Dump Debt By Following the Baby Steps—in Order (Hour 1)

Episode Date: July 24, 2018

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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, your money. This is all about you. The phone number is 888-825-5225. That's 888-825-5225. Starting off this hour is Daniel in Cincinnati.

Hey, Daniel, how are you? Hey, Dave, how are you doing? Better than I deserve. What's up? I just want to thank you for all that you do. Your show has already begun to change my life and my family as well so I'm very thankful for you. Thank you, how can I help

today? Kind of a unique situation, I've heard you speak on it in the past before but I wanted some specific clarity I guess so I found your show in January of this year and I had already kind of had Baby Step 1 and Baby Step 3 completed,

but I skipped Baby Step 2 until I got the wisdom that I'm supposed to not have that. So I've been working on that, and I've been working on that with my wife. We've been married for a little over a year now. And a big question for you is more of some guidance and maybe just kind of how to do this the right way, I guess. But it's kind of a family thing. So my wife has some student loan debt totaling $33,000 at the beginning of the year. And this was before we were together, dating or married. But to my understanding, her and her father had an agreement, I guess, that if she were to go to a Christian private college, that he would pay for the college in full.

The problem we're having now is kind of after, once we started having talks at marriage and stuff, um, her parents started to talk to us about this and kind of come to an understanding on it. But apparently her mom wasn't really in the loop on that conversation and on that idea. Um, so now we're at the point where we're having conflicting ideals when it comes to her dad versus her mom versus, you know,

my wife and what we should do about the student loan debt. Whose name is the student loan debt in? So it's definitely in her name, but I think it's also in her mom's name. I think it's co-signed. I'm not certain. It's not a parent plus loan then. It is a straight-up student loan. Yeah. Okay. There's not a parent plus loan then. It is a straight up student loan. Yeah.

There's multiple. There was different loans. So what is your household income? Household income was aiming to be $70,000 this year. I make $40,000. My wife was making $30,000. She just lost her job about 10 days ago. She's searching.

Optimistic about that. She'll probably find something similar within a couple weeks. Sure. Okay, good. And what other debt do you have? So my car loan, unfortunately I bought a brand-new car a year ago before I found you, and that's the debt we're working on paying off right away right now. I'm at $11,000 right now.

I bought it for $18,000. Do you have any other debt other than your car loan of $11,000 and $33,000 in student loan debt? No other debt. Okay, good. And how much is in your emergency fund where you skipped a step? We have $11,000 in there right now. Okay.

Pay off your car today. Okay. And then pay off your student loans. Mm-hmm. As fast as you can. So my wife is a little uneasy about doing a – I tried to get her to knock down – to get her to agree on knocking our savings down to $1,000, like I've heard you say before, but she's a little uneasy, I guess, about that,

especially with her delusion. The problem is this. You've been talking about what instead of why, okay? You guys can get – you make $70,000 a year, you can get out of this debt. But you can't if you work your plan. Uh-huh. Because you've helped no one get out of debt, and we've helped millions. That's right.

So, I mean, you have to decide what you're going to do here. Yeah. So it's up to you guys. You can live your life. You're adults. You're allowed to do you're going to do here. Yeah. So it's up to you guys. You can live your life. You're adults. You're allowed to do whatever you want to do. But the way we do things when someone calls on this show is with as much love as I possibly can, I want good things for you. and my 30 years of helping millions of people, what would I do if I woke up in your shoes one year married with $44,000 in debt and $11,000 in the bank,

making $70,000 a year? Well, I would work the baby steps. And the reason they're numbered is so that you do them in order. Yeah. I agree. This is fairly easy stuff here. So, you know, now, can you talk her into it i don't know i don't know maybe she wants to work her plan um she can work her plan if she wants but um i think the two of you need to sit down and talk about okay what is our goal if our goal is financial peace some

money in the bank building wealth and no debt what is the shortest fastest most efficient way least painful way to get to that goal and most high probability of getting to that goal um it would be to take your you know your savings down to a thousand dollars and pay off your car today get on a really tight budget and attack with a vengeance those student loans because her parents aren't going to pay them because her mother's in charge and her mother um you know is not concerned so um enough for her husband to keep his word her daddy is a wimp He's not going to keep his word. Had I given my daughter my word, we would be keeping my word at my house. But her daddy's a wimp.

You're going to pay the student loans. Mommy's in charge. So just get over it and move on. You don't get to control their house, and they're not going to pay the bill. And the bill is in your wife's name, so you're going to pay the bill. That's what's going to happen. And I really wouldn't argue with them anymore. There's not any point in arguing.

Just step back and love them where they are, and it's just how they run their house, and that's cool. And then you guys have to decide how you're going to run your house. What are we going to do here? Are we going to just, you know, wander along and stay in debt, or are we going to attack this with a vengeance and a proven plan? And that's what you've got to do. So hold on.

I'm going to send you a copy of the book, The Total Money Makeover. I might suggest you just sit down with your wife and say, hon, won't you read this? This is why I'm so excited. And then let's talk about it before you just reach over and pay off the car. I'm not suggesting you push your wife around emotionally. I'm saying you explain to her why this is important and why it works and why we're doing this. And, you know, the Total Money Makeover book will help you walk through that process.

Hey, thanks for the call. Open phones out here at 888-825-5225. What a sad situation. Can you imagine how that makes that daughter feel? So you parents that have teens that are getting ready to go off to college um don't make any deals around student loans don't take out any student loans what you can't go to school without student loan it's federal law that's what people think isn't it now let me just tell you you pick a school that is an in-state school, and you study a degree

that is usable, and you work while you're in school, not flopping whoppers at minimum wage, but, you know, dog sitting, babysitting, cleaning toilets, mowing grass. You can make $20 an hour doing those things. Most of us worked when we were in school. It's not child abuse. So send the little princess to work. Put her in a school you can afford and then you don't end up breaking your promises because you're a wimp. This is the Dave Ramsey Show. Are high health care costs getting you down?

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supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Greg and Tia are with us in Oahu, Hawaii. Hey, guys, how are you? How are you? Better than I deserve.

I see on my screen you're debt-free. Congratulations. Hello? Yes, we are.-free. Congratulations. Hello? Yes, we are. Very cool. Good. And how much have you paid off? We paid off about $90,000 in 11 months.

Good for you. And your range of income during that time? About $110,000 to $120,000. Okay. All right. And very cool. And what kind of debt was the $90,000? It was everything. So campers, vacations, cars, a little bit of credit card debt, just everyday life savings.

Very cool. Good for you guys. What started you on this journey? Well, I was deployed at the time, and then something came up. I don't remember exactly what it was, but it would have been another payment. And I was like, we can't afford another payment. Like, we weren't basing it off overall things. We just couldn't afford to have another piece of income going somewhere else. So I started doing some searches, YouTube and everything, and I came across the Debt Free Community and

Dave Ramsey. Very cool. Cool. Well, thank you for your service. And so then what happened? So I purchased the Total Money Makeover, and it was one of your summer sales, so it was a bundle with some of the CDs and Rachel's audio book. So I read it about a day, and then I toldds and the uh rachel's audiobook so i read it about a day and then i told greg i was like you got to read this and uh he's pretty indoctrinated

so he gets on board pretty quickly he read it in about a couple days and we were all in at that time very cool so that's how you got your spouse on board read the book honey yeah i love it very hard at all so what do you tell people the key to getting out of debt is uh i think that you have to have a budget you have to be intentional and you have to have a plan uh you have to know that your needs tomorrow are greater than your wants today and you just got to know like where every dollar is going and what you're actually doing because like you say all the time you can wander into debt but getting out of debt is not so easy if you don't have a plan.

Now, did you guys sell something? You must have. Oh, yeah. Oh, yeah. What did you sell that was big? That was my goal. The camper. Okay.

And how much did the camper sell for? It sold for $10,000, I think. $10,000. Okay. And what else did you sell? Just odds and ends, things that we weren't using, clothes, electronics. The big thing was, though, I was a saver. I already knew that I wanted to have a large down payment for our retirement home,

but I just didn't know that I needed to get rid of all the debt. So we had about $34,000 in non-retirement debt. Okay, so $44,000 was the sale of the camper and savings that you threw at it. Yes. And then that leaves you with about $45,000 you did in 11 months making $110,000. That math makes sense. Very good.

Good for you guys. How does it feel? What was that? How does it feel? It feels amazing. How does it feel, Greg? It feels amazing. How does it feel, Greg? It feels amazing. Just ready to, so now we can just continue on with our retirement goals and everything like that.

It's just great. Yeah, you don't have any payments. You can do a lot of stuff, right? Oh, yeah, it's amazing not having any payments. It gets a little hard actually doing the budget when you're trying to allocate funds. Because there's so much money left yeah every dollar app i'm telling you like we got a pay raise for the first time i did it i was like there's no way that we have this much left over at the end of the mall yeah because i didn't know where it was going wow way to go you guys i'm very proud of you good job good job did you have

people hating on you or people encouraging you? I think it was a combination of both. What we did is you have to be around like-minded people, so your online community and then all the resources you offer online. The good thing that I do like about your program is anyone can do it. So my mom, who's been teaching for well over 30 years, also is doing the program at the same time, so we can talk about things. I got her on board with the envelope system. And then the people who are naysayers, we just kind of X them out of our lives.

Ah, okay. There you go. Well, you've got to have people around you saying yay. I mean, because it's just too hard otherwise. It really is. Well, way to go, you guys. Very, very well done. All right. We've got a copy of Chris Hogan's book for you, Retire Inspired, number one bestseller. We all know that'll be the next chapter in your story, that you become millionaires, everyday millionaires, and outrageously generous as you go along. So very, very well done.

Greg Antia, Oahu, Hawaii,i ninety thousand dollars paid off in 11 months making 110 to 120 count it down let's hear a debt-free scream three two one Well done, you guys. Very well done. Man, that's fun. Open phones at 888-825-5225. Dominique is in Pittsburgh. Hi, Dominique. How are you? Great.

Thanks, Dave, for taking my call. I just need to tell you that my husband and I have been following our principles for 10 years now, and it's just amazing what it's done in our life. Wow. Very cool. How can we help today? Okay.

So my stepmom, who I'm really close to, who lives in Florida, I live in Pittsburgh, my dad recently passed away about two months ago, and she's 73, and she really wants to downsize. The house is too big. It's too hard for her to maintain, and so she really wants to downsize into an apartment. I really don't know how to advise her because she's on a very limited income. She makes about $24,000 a year, and if she was to sell the house, it'd probably be about $130,000. So I'm not sure what to say to her. Is the home paid for?

Yeah. Okay. And what's it worth? $135,000, you said? It's probably between $135,000 and $150,000. Okay. And what city does she live in? I'd rather not say that it's in Florida. Okay. Well, if it's a city that's a reasonable real estate expense

for $150... It's really reasonable. I'm sorry? It's a very reasonable area. Okay. Then she should be able to get a condo for much less than $150,000, shouldn't she? Maybe $100,000, $110,000 condo? Yeah, that's what I was thinking, but do you think it would be better for her to rent, or do you think it's better for her to own? How is her health? Well, she had a heart attack in January. She really came back. back you know she's walking two miles a day

and but her hearing is not really degenerating and um well the point is the point is that she's likely to live as much as 30 years i know during that 30 years her income's probably not going to go up a lot, but rents will. I know. And so don't rent. Okay. Buy something. Do a condo. Yeah, buy a little condo and pay cash for it. And then she can make it. Then she can make it for 30 years on her income.

The $24,000, I assume, includes social insecurity? Yep. Okay. All right. And she doesn't have any other money, I assume? Nope. Okay. All right. So she doesn't have any other money, I assume. Nope. Okay. All right.

Yeah. Yeah, let's, because, you know, if she lives 20 years, she'll be 92. She probably won't live 30, but she'll be 92, right? Yeah. And in 20, think about what rents have done in 20 years. Yeah. Doubled. I agree.

And I don't think her income's going to double during that time. Yeah. Doubled. I agree. And I don't think her income's going to double during that time. No. I mean, I've offered to have her come live with us, but she says she can't take the winters anymore. So, you know, to help her save money.

But, yeah, I think the condo is the way to go. Yeah, something that she can pay cash for. And I'm sorry you lost your dad. I'm sorry she had to make these decisions while she's grieving. If there's nothing pushing her, I'd recommend she tap the brakes just a little bit and maybe wait until spring, maybe wait until he's been gone a year, because you'll make better decisions after that.

It's tough to make good decisions, big decisions like this, when you're kind of in the midst of grieving. Now, if he passed away in the home and there's, you know, a situation like that where she doesn't want to be in the home, I understand. And if you want to go ahead and sell it, it's okay. But financially, it's okay to wait until spring. Take your time. Make decisions slowly and carefully with wisdom. Hey, thank you for the call. Sorry your loss this is the dave ramsey show Can you believe this real estate market? Home shopping has become so competitive.

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This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brent Solutions, Kathy is with us. Hey, Kathy, how are you? I'm good, Dave. How are you? Better than I deserve. Where do you live? I'm from Chicago, right outside of Chicago, Rolling Meadows, Illinois. Neat.

Welcome to Nashville. And all the way here to do a debt-free screen. All the way here. Never been here before. Love it. Well, welcome. How much have you paid off? I have paid off $19,000.

Good for you. And how long did this take you? 16 months. Good for you. And your income range during that time? Right around $82,000. Cool. What do you do for a living? I'm a registered nurse. Oh, yeah. Good for you. And your income range during that time? Right around $82,000. Cool. What do you do for a living?

I'm a registered nurse. Oh, yeah. Good for you. Excellent. So what kind of debt was the $19,000? So it was credit card and my car. And then in the middle of all that, I had a medical bill of about $2,000. Yeah.

So you're kind of normal. I was normal. I thought I'd have a car payment the rest of my life. Yeah. Have you ever been debt-free as an adult? You know, I can't remember when, so it's amazing. Wow. Good for you.

What happened 16 months ago that put you on fire? Because you got after it, girl. I feel like I did, but my niece, Vanessa, who's here with me, started talking to me about a class she was taking at church called financial peace the steve ramsey guy had never heard of you and i'm sorry to say that i haven't but um then i kind of was like she said the word budget to me and i was like oh no not that never lived on a budget in my life don't cuss at me right so i she told me about the EveryDollar app, and I thought, I'm into technology. Let's try and see what this is about. And that was life-changing for me.

The EveryDollar app sucked you in, and you don't even like the word budget. Nope. I love it. It was amazing. I really, it was right around the time I would look at two weeks and go, how come I don't have money? Like, I have this much. I started doing EveryDollar, and I was like, wow, how come I don't have money? Like I have this much. Like I started doing every dollar and I was like, wow, how much money I have. So like everyone says here, a budget gives you

permission to spend. And it does. It's really true. And anybody who doesn't think they can do it, I didn't think I could do it. And kind of through this journey, I lost motivation. I watched your show every day and these debt-free screams motivated me. And then I got my credit card paid off first and I was kind of lollygagging just, you know, my goal was to be debt-free in February of this year. And then I watched your live, I bought a live stream of you and Rachel in Phoenix last November. And when you did that visual of the chain around the neck,

I was like, oh no, I am not starting 2018 with that. So December 14th, actually, I paid my last car payment. Yay! I love it. Just like that. And I thought I would hear fireworks,

but I didn't it's kind of quiet it is quiet until you do your budget in january and when i got down to the debt part i was like oh now it's real now i have money yeah look at that i don't it's not all going to someone else all my hard work yep so this is really my first trip being debt free well congratulations thank you i'm proud of you. Well done. Now, I know your niece was cheering you on. Who else was cheering you on?

You know, my family's very supportive. I didn't really tell a lot of people, so my coworkers I told. But I just didn't really want to put it out there because it's embarrassing. Because you want to look good. And from the outside, it all looks good. You drive a nice car. You have nice things. But inside, I didn't really want people.

But now I'm more sharing my story with my colleagues and coworkers and trying to get them on board. Yeah, that's fun. Good for you. I think with you, a lot more happened than just getting out of debt. It did. It changes you as a person. You know, back in the day, an emergency to me was a coach purse.

And everyone in my family knows that. And now I'm like, uh-uh. I am not. Swipe of a card, it's so easy to just build up that debt, you know. That's amazing. It is amazing. Yeah changed you did and uh the the paying off the debt is the byproduct because i don't think you'll ever go back absolutely not i think you're no way i don't own a credit card when my niece told me i had to cut all my credit

cards i was like palpitating i was like what i didn't think i could live without a credit card and you can yeah it's amazing absolutely so the every dollar budget and the youtube channel that was your that was your path well i watch from like your website yeah the path okay i got you so i mean and that just keeps you motivated and yeah you know i love your saying that you say what can you do when you're out of debt anything you want and i love it and now you can just buy a coach purse, yeah. Well, and now I rethink twice because your mindset changes. And then just as a side note, now that I had my financial house in order,

I have lost 35 pounds since February. Wow! Yep. Way to go! Yeah. It's amazing. Yeah, discipline begets discipline. You actually subliminally talk about weight loss in your shows.

You know, if you want to know how to lose weight, ask a skinny person. And that kind of got to me as well. And I'm like, you know, I need to do something here. I'm a nurse. I know how to do this. Yeah, I hear you. Good for you. Thank you for that as well.

Good for you. Well done. Excellent. Excellent. Good job. Oh, I'm proud of you. Great, great. You're a. Good for you. Well done. Excellent. Excellent. Good job. I'm proud of you. Great, great. You're a hero.

Thank you. Thank you. We've got a copy of Chris Hogan's book for you, Retire Inspired. Awesome. And that's going to be the next chapter in your story as you become not only debt-free now, but become a millionaire. Right. That's my next goal. One of our everyday millionaires.

You're on your way. Cool. So what was the hardest part for you? You know, I don't feel like I really changed my lifestyle all that much, but just staying motivated and staying on the path. Because there were many months that I was like, I couldn't wait for the month to get over so I could put as much money as I could towards my debt. And it just seemed to be moving slowly.

So, you know, my niece was very inspirational to me um i'd watch your show because then i'm like okay now i got my head back together you know so you just have to keep your head on straight and know that the end is coming and because the feeling once you're out of debt you just can't describe it yeah but you do have to live like no one else you do so that later yep you can live like no one else that's good and give and that's another thing i started tithing and giving and just being more generous and that changes you as a person as well it does yeah oh man you're something else way to go good job thank you kathy from chicago19,000 paid off in 16 months, making $82 a year.

Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! There we go. This is how it's done. Man, oh, man, that is beautiful. Fabulously done.

Our question of the day comes from Blinds.com, the number one online retailer of custom window coverings. Sitewide savings happening right now, plus take an additional 5% off at Blinds.com. Blinds.com slash Ramsey. That's the key. Daniel's in South Carolina. I'm 20 years old in college because my parents went through Financial Peace University a long time ago. I've been blessed to have college paid for by them.

I have about $10,000 saved up from working, and I have no expenses. Right now, I have it invested in mutual funds to beat inflation. Is this a good idea, or would you recommend I do something else with this money for the time being? That's fine. You can get the money out of mutual funds if something bad happens and you have to use it to finish school. The biggest thing I tell college students is there's no rush to start investing while you're in college. So I would not put it in a Roth IRA. I would not put it into a retirement account.

But using mutual funds is just fine if you want to. But the biggest investment, the best investment, Daniel, you can make right now is into a mutual fund named Daniel. You. Because you graduating debt-free, which your mom and dad seem to have covered. That's awesome. And I hope that that plays out exactly that way. I think it probably will. But just in case, if you've got $30,000 laying in that mutual fund and you keep adding to it during the time you're there, and that's your insurance policy that not only that you graduate,

but that you graduate debt-free. If you do that, that's a good move for a college student. Because if you get a degree in something that's actually usable in the marketplace, the money spent on that will give you a better rate of return than a mutual fund will. You are worth investing in, sir.

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Robert is in Boise, Idaho. Hey, Robert, how are you? Better than I deserve, Dave. How's it going? Just the same, sir. How can I help? Okay, so here's my situation. I called in for some advice for like the next two to four years-ish, and my situation, I just graduated college, I'm 22 years old, and I start my job next week making

$71,000 base pay, and I'm $19,000 in my own personal student loan debt and then my parents took out additional loans in their name uh totaling about another nineteen thousand um no other debt uh no credit cards or anything like that we have about my wife and i have about um twelve thousand in savings um and my wife also she's looking for a job as well. She'll probably be making between $30,000 and $40,000. So I'm trying to figure out what my best course of action is going forward. We also want to buy a house in the next, like, 12 to 24 months, so I'm trying to figure out if all of this is sustainable.

Okay. Are you responsible for your parents' loans? I'm not responsible, no, but I feel kind of like an obligation to help them pay for it because, you know, their finances aren't in the best order, and, you know, me getting this decent job right out of college, I feel like, you know, I'm responsible for that lump of money as well. Mm-hmm. Did you have an agreement with them one way or the other?

What was that? Did you have an agreement with them one way or the other? No agreement. What do your parents make a year? It's basically a single-income house. I'm guessing about $60,000. Okay. All right.

Cool. But, yeah, they have other expenses in debt as well. Okay. All right. Cool. But, yeah, they have other expenses and debt as well. Mm-hmm. Okay. All right. Well, if you want to give your parents $20,000 as a gift, which is what you're discussing here, I would do that after you meet some of your basic financial goals. Okay.

But that is not your debt. Well, I know basic financial goals. Okay. But that is not your debt. I know, I know. Okay, but if you want to give them a gift and help them out at some point in your finances, that's fine. But I think you've got some basic things you need to hit first, and that is you need to clean up the existing debt that you two have, hopefully with $100,000 plus income. You can pay that off and use the savings that's there. You can pay that off very, very quickly, right?

I'm trying to pay that off. I'm in the grace period, so I'm trying to pay that off before my first payment so I pay zero interest. Right. Well, you said you had how much in savings? $12,000 roughly. I mean, I have some investments, but like $12,000. What kind of investments do you have?

Oh, just like about $2,000. What kind of investments do you have? Oh, just like about, I have like $2,000 in stocks. Is it in an IRA? No. Okay. Cash that out and put it on the student loan today and take your $12,000 down to $1,000 and put that on the student loan today, and then you'll be debt-free in about two months. Then you build your emergency fund. Was that the only debt you had?

Did I miss something? There was another debt. No, we've been very fortunate. I bought a car very cheap for my aunt, and then my mother-in-law gifted my wife her car. Okay, so you don't have any other debt other than your $19,000. Well, we, yeah, no.

I have a balance on my credit card right now just because we moved here, but I've got a moving incentive from my employer, so that will be paid off as soon as I get that. Okay, but you could pay it off too. And then when you get your money back, you could just put the money in the bank. All right. Correct.

All right, the thing here is this. You have to get your head around the idea that having no debt is the shortest path to wealth. And so every time something comes up, we move here. I'm going to use a credit card. My employer is going to reimburse me, though. That's not okay. You have to stop that kind of stuff. And every time you get ready to buy something, you have to pay me, though. That's not okay. You have to stop that kind of stuff. And every time you get ready to buy something,

you have to pay cash for it, from this point forward. Completely avoiding debt is your big deal here. So I want you to clean up the credit card. I want you to clean up your $19,000. Wasn't there something else you told me other than the parents' $19,000? You had something else. Your wife had something? No other debt at all? No, just that she doesn't have any debt either.

I mean, she doesn't have any debt. I think I said that she's looking for a job somewhere between $30,000 and $40,000. Yeah, I heard that. Okay, I guess I'm slipping. Okay, anyway, so I want you to clear up the credit card. I want you to clear up your student loan using your income, your $2,000 stock account, and $11,000 of your $12,000 thrown at these things immediately, and cut up the credit card and get a debit card.

Then I want you to finish paying off your student loan, because you can't quite do it with that, and as fast as you can. And then as soon as you do that, I want you to build an emergency fund of three to six months of expenses. And then and only then do you start saving towards a house. But you'll be able to buy a house in about a year. When you guys get into the house and you have your emergency fund in place and zero debt and you put a good down payment on the house

and you have a house payment that is no more than a fourth of your take-home pay on a 15-year fixed, then before you start investing, if you want to start and reach over and pay off your dad's loans, that's fine. At that point is when you would do that kind of family-type giving. But I want you to get into your house and be debt-free and have your emergency fund in place. And so probably year after next before you pay off dad's loans. But that's cool if you want to do that. No problems. But they're not your loans, and so I would put them in a different place off dad's loans. But that's cool if you want to do that. No problems.

But they're not your loans, and so I would put them in a different place. It's charity. It's giving. It's generosity. And that's a good thing for you to do all that, but you put that in a different place in your process here. So that's how I would get after it. Hey, thanks for the call.

Open phones at 888-825-5225. Sarah's in West Virginia. Hi, Sarah. How are you? I'm doing great. How are you? Better than I deserve. What's up?

Well, my husband and I have just started listening, and we are in baby step one. We only have $500 saved. We've only been listening for about a month. And an opportunity has possibly arose for us to be moving out of state. And this would give me a $13,000 a year raise. And my husband is worried that if we were to move out of state and be paying a normal rent that we wouldn't be able to reach Baby Step 2 as quickly or as easily as we would if we were to stay here. Why? And so, well, we rent from family, and our rent is only $380 a month, which is extremely low.

And I think he's worried that if we were to go to someone that's $700 a month or something, then we wouldn't be able, that we would just be in a worse position. Let's just talk that through for just a second, okay? Let's just do some math, okay? $300 a month more in rent is what we're talking about, right? Right. Times 12 is $3,600 a year. $3,600 more in rent.

Right. Right. But you said your raise is $13,000. Mine would be. He would have to find a job down there. Yeah. What does he make now? He makes about $22,000.

Okay. And what does he do now? We both work for a shelter for special needs foster kids. Okay, and what would he be doing if he went down there? Probably something similar. He really likes to work. What do you make now? I make $21,000.

Okay, all right. So you're going to cut your household income in half but add $13,000 back, so you can't make this move unless he lands a job. Right. If he lands a job at making $22,000 or more, then this is a $13,000 raise minus $3,600 in increase in rent. You come out ahead $10,000, right? That's what I thought as well.

It's kind of math. I mean, it's not a matter of opinion. It's just a math thing. Now, where are you talking about moving to? North Carolina. Okay. And your family's all in West Virginia? No, I have some family down in North Carolina,

which is why we were eventually choosing to move down there. Where does his family live? Yes. Yes. In West Virginia. I think we found the real problem. It's not a math problem. He doesn't want to leave West Virginia.

Right. Ah, that's something to talk through. That's not a personal finance issue. That's a where do I want to live issue. And neither one's okay with me. Both fine places. West Virginia's a great place. So is North Carolina.

Wherever you guys want to live, just go. But you need to be on the same page about that, and let's not use money arguments to make another argument. How about, I just love West Virginia and I don't want to leave. That's an okay thing to say. If that's him, that's okay. That puts this hour of the Dave Ramsey Show in the books. Hey, guys.

This is James Childs, producer of the Dave Ramsey Show. I'm excited to announce that we're now carrying on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. Guys, let's talk about that timeshare pitch that you fell for. They promised you exclusive access to travel anywhere you want. Tropical beaches, mountain getaways, or whatever. Oh, my gosh. They claimed it was the affordable way to travel, and then they convinced you it was a good investment.

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