The Ramsey Show - App - Emotional Money Decisions Are Stupid Money Decisions (Hour 2)

Episode Date: January 28, 2019

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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. Thank you for joining us. Open phone's at 888-825-5225. That's 888-825-5225. Liz starts off this hour in Orlando, Florida.

Welcome to the Dave Ramsey Show, Liz. Hi, Dave. Thank you for taking my call. I have a housing question for you. My husband and I are going back and forth whether or not we should move. We are on baby step six. The reason for that is because there is a co-plant near our home that's up 2.1 miles away from us, and there's a cross-action suit against them due to some allegations that toxins that are being released are causing health issues in the individuals all around the area,

especially in children that might be causing them some cancer. Now I'm concerned because I have a three-year-old daughter, and I'm expecting them as well in May. So I would like to move. My husband's kind of doubtful about it, but I would like to move to an area that's about $430,000 of home prices. So we want to know your thoughts about that. So you want to move, and what was the $3,000? $430,000. That's the area where we want to move to,

like the home prices start off at that price. We didn't know if it would be a right move. What does your home sell for? Our home would sell about $265,000. That's the one that sold the exact same model behind us last month. So that's where we're speculating. There's two different issues. Issue number one is I don't want my children to have potential toxins

causing potential cancer and other issues. So I want to sell my home. That's issue number one. Issue number two is I want to double how much I'm in debt and buy a much, much, much nicer house while I'm at it. I'll go with issue one, but no, you can't do issue two.

Okay. You can't use the emotional aspect of I want to save my children's life in order to go buy a house you really want. Yeah. That's cheating. I know, I know. I just wanted to do your thoughts, and it's like we're going back and forth. I'm with you. I'm with you.

I'm with you. I would move, but I would move to another $250,000 to $300,000 house. Of course, especially since we're so close of paying off our house. Yeah. Yeah. Okay. Yeah, and, you know, that's what I would do because I don't want to go further in debt. Or if you're going to move up, you need to move up because of your financial situation is a whole lot better,

and you can still knock it out in a very, very reasonable period of time, and you're 100% debt-free other than the house. You've got your emergency fund, and you're just making bank everywhere, and you can knock it on out. So it's not a big strain to move up to $400. That's okay. But I didn't hear any of that. All I heard was, my babies might get sick, so I'm going to go buy a twice as expensive house. Yes, that's very true.

Yes, that makes sense. I appreciate your insight. Yeah, I'm okay with you making the move. And then on a separate issue, on a separate piece of paper, decide how much you can reasonably move up. And don't use the emotion of protecting your children to make that rationalization or justification it's not a rationalization it's a justification but you don't have to move up to save your kid's life that's not the point okay so good question it's interesting it's funny liz how all of us do that i mean we get i was talking about last week on the show people call me up

and they go well i'm deeply in debt on my car because my other car got totaled and i went no that's not how that works it's the same kind of a thing you go through the emotions of a car wreck and your car getting totaled and the lady that in that particular case you know we all do this stuff and you just have to guard against this this is what kills us with our finances but you know the typical person that calls me on the air whose car got totaled buys a more expensive car than they were driving before it got totaled. And they use the car getting totaled as the justification to do that or the rationalization to do that. And so this lady had a $10,000 car.

She got a $10,000 check. She owed $7,000, which means she had $3,000 in her pocket. And she went and bought a $20,000 car. Okay. And all because. But in her mind, she didn't separate the two things she's in her mind it was like i had to buy a car because my car got totaled and there's just 20 000 that's just what i bought didn't make it there's a distinction that she doubled the amount of cars she was driving as

a result of the car wreck and those are two different things yes you need to replace the car but in her case what i would have suggested she didn't do it obviously she'd call me afterwards but in her case i would suggest take the three thousand dollars and buy a three thousand dollar car move down in car and be debt free in her case but if you can separate the emotions of the event that has money around it and determine from that then what is the right thing to do why wisdom wise what is the wise thing to do then that really helps me because i i fall in the exact same trap that liz has fallen into you do too the same trap the lady with the car thing we all fall into that if we're not real careful because personal finance is personal and what you drive and where you live.

And, you know, I've had people call me up and say, you know, my mother passed away, and that's why I'm $60,000 in debt. I'm like, how did your mother, did you pay all her bills? How did you end up $60,000 in debt? Well, we had to pay for the funeral. What was she, King Tut? I mean, what do you mean $60,000? Oh, no, the funeral wasn't $60,000. The funeral was $10,000.

And I went, oh, okay, so you're $10,000 in debt because you paid for your mother's funeral. What's the other $50,000? Oh, well, I just, but in their mind, they said, I got $60,000 in debt because of my mother's funeral. And it wasn't your mother's funeral. And not even a sixth of it was the mother's funeral you see how our minds work how we tie that together and out of the abundance of the heart the mouth speaks and so when you lump these things together in your in your conversation with yourself that i have and that you have you need to be careful with that you know okay these are two separate things and when you break them apart then you'll make much wiser decisions.

And it's not to say that Liz can't move up in-house. It's possible her finances will allow that. But let's say that she's in debt, doesn't have an emergency fund, and she still needs to move because of the potential health problem for her children. Yeah, move. Protect your baby. I'm with that. I've never asked my kids to leave my grandbabies in the situation where I was worried about that. No, get out of there. Be done with it.

But that doesn't, but move laterally, laterally. And it's a really interesting thing. How much do our hopes and our fears, how much do our rationalizations and our justifications, our sense of feeling trapped versus our sense of being victorious, hopelessness versus hopeful, selfishness versus selflessness, how these things interweave into. And somehow we can make the dumbest math in the world sound smart in the middle of all that stuff. All of us can. And I'm chief. I've got a Ph.D. in DUMB. It's why God makes me teach this stuff every day.

I can do the exact same thing. And, again, there is no harm in moving up in car if your car gets totaled. There is no harm in Liz buying a better house. Keep those two decisions separate and don't blame the higher purchase on the emotional event. Blame the higher purchase on, hey, I looked at my money and my finances and I can actually have the money and I can afford it. Oh, then that's an okay, cool deal. Keep them separate and you'll make better decisions. This is the Dave Ramsey Show. Your goal this year is to get rid of your debt, but here's the deal. In order to keep your momentum going past January,

you have to make small changes that get quick results. That's why you need to attack your debts smallest to largest. I also recommend you look for ways to find extra money to pay off your debt sooner. It's there, I promise you. Take a look at your mortgage. If you call my friends at Churchill Mortgage and request a five-minute checkup, they can help you find extra money. Churchill Mortgage Checkup has helped thousands of my listeners save big. In just a few minutes, the Churchill team can tell you how much cash they can potentially

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761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Rinaldo is with us in Breckenridge, Colorado. Hi, Rinaldo. How are you? Hey, Dave. Thanks for taking my call. Sure. What's up? I guess I'm just in a bit of a pickle of a situation. I want to ask you your advice. We just finished Baby Step 1, my wife and I, and we're just wondering if we should pay our debt or cash flow our house build

because we're living in a temporary construction dwelling on our land. Okay. What kind of a temporary construction dwelling are you in? It's basically like a tiny house, I'd say. Okay. And is the land paid for the land is paid for we purchased it with the sale of our house in florida okay and it's in breckenridge this one is uh it's about 30 minutes from breckenridge uh suburb out by Park County called Hartsell. Gotcha. Okay.

We ski out there all the time. I know what you're talking about. Okay. Right on. Hmm. And what's your household income? $75,000. Cool.

And how much debt do you have? $38,000. Okay. And what will it take to do the build? So we're still, like, working on foundation as soon as all this snow clears. And so we're estimating the house is going to cost us about $75,000 to build because we're doing a lot of the work ourselves. Okay. So $125,000 makes you debt-free in a paid-for house.

Yes, sir. And you make $75,000 makes you debt-free in a paid-for house. Yes, sir. And you make $75,000. Yes, sir. So it sounds like in three years you would have both done if you were very, very, very frugal. Right, and that's kind of what we're looking at trying to do is maintain the discipline of the baby step two. What kind of debt is the 38? We've got like a truck, some dental work for our youngest daughter, a loan, a personal loan that we took out to get a tractor for the land. How much is the tractor?

The tractor is, it was $11,600. And how much is the tractor? The tractor is, it was $11,600. And how much is your truck? The truck is $18,000. We owe the last time. Okay. Why don't you sell your truck and maybe the tractor? We just recently tried to do that, and we'd have to write a check for like $7,000, and then we'd be out of a vehicle.

So we're trying to figure out how to do that as well. Yeah. But if you could get rid of $18,000 worth of debt there, or reduce the $18,000 down to $7,000 and then get you a cheap truck to drive. I mean, you're living in a tiny house. You're driving a truck that's more expensive than your house. Yes. The payments are the same. truck that's more expensive than your house. Yes, that is. The payments are the same.

Your tractor is more expensive than your house. Well, we technically try to sell the tractor because that's not something that is really doing a great deal for us right now. And I thought it would be able to do more than what it did. Well, I guess my thing is this. I mean, what would I rather have if I'm in your shoes? I'd rather be out of the tiny house in a paid-for house than I would have a tractor and a truck. Right. And that's all I'm thinking.

I'm not saying either one of those are absolutely ludicrous. They're not. But when you put the truck and the tractor together, we have almost all your debt. Well, the issue with the truck and the tractor situation is that there's not a way for me to get out from underneath them without, you know, taking at least a 50% loss on each one of those items. And then I'm still having to pay for them. You've already taken a 50% loss on them. That's true. You admit it when you're selling them.

I see. I mean, if you could pay. So the tractor won't bring $11,000. It'll bring what? I mean, if I sold the tractor, I might get $10,000 out of it. Okay. That's $10,000 of your $40,000, of your $38,000. Of $38,000, yeah.

Okay, let's agree that that's just gone. And by the way, that doesn't have a lien against it, so you'd have that money in your hand, right? Right, right. Okay, so we don't have to put it all on the debt. We could use seven of it to pay off the truck balance and buy a $3,000 truck. Okay. The net is we have a paid-for truck, and we got rid of $18,000 in debt.

That leaves us $20,000 in debt. Okay. That would work. Let's do that. Yeah, that's a good plan. Yeah, sell them both. With the remaining debt, what do I do with that? And then the remaining debt, we got $20,000 left, and we make $75,000.

So what is the shortest way for you to get into the house? It could be argued that paying off the debt would free up the cash flow, and you'd get in the house that much faster. That's what we were tossing around. Do we pay off the debt and then we have more money available, our shovel's bigger, or do we just go with the shovel size we have and get started sooner? You know, what I'd do is kind of run it out and look at it, because I just, you know, it gets cold there in the winter in a tiny house.

Yeah. Tiny house in Breckenridge is a, you guys are adventurous. Do what? And to be fair, we are living really comfortable in the tiny house. We're not, like, struggling to get out. Our issue to get out of it is the county. You know, we have to make sure that we're making that happen. Okay, let's just keep talking this because this is very interesting.

You've got some really cool goals. I want to help you. All right, let's say we got rid of the truck and the tractor, and we're 18,000 lighter, so we owe 20, we're driving a $3,000 truck that's paid for. So we don't have truck payment anymore. How much is the truck payment? $468. Okay, so let's $500, I'll round it up.

Okay. Right. And I'm making $75. The house is about $500 as well. How fast, the what is? The tiny house is about $500 as well. And how much of the $38 is that? Six left.

Okay. All right. So we got $20 including the tiny house, correct, after we sold the truck? Yeah, after the truck. So how fast can we pay off $20,000 making $75,000? Well, that's the other thing. We're living kind of expensive because we're living comfortable, so we have a high propane bill.

How fast can we pay off 20 making 75? Let's see, within seven months. Okay. Let's do that. Yeah? Yeah. Okay. Because here's what's driving my decision-making on this,

and see if you can line up with this, okay? You've got to decide for yourself. You're the guy living in the house, okay? Sure. But the way I've learned that rich people think is they don't think of what makes me feel good by Friday. They think what makes me the wealthiest 10 years from now. And you having this paid-for home living in it is a brilliant plan. I love what you're doing.

You're cash flowing into that house. Okay? Okay. So if we're debt-free in seven months, I think that takes you to the best plan 10 years from today. Yes. Yes, sir. I understand. Rather than 10 months from today.

10 months from today, it's not the best plan. 10 months from today, I's not the best plan. 10 months from today, I'd like to be neck deep into getting that house up out of the ground and all that kind of stuff. But if you're seven months in and you do the tractor and the truck thing like we're talking about here, and then we don't have any payments and I need $75,000 to build this house, and if I'm going to do that in two years, that would be $37,500 a year you would be living in the house, paid for and finished in two years and seven months. Yes, sir.

That sounds like that. Yeah, that would be great, I think. That makes me okay. Now, that's give or take weather, and give or take you might get a raise along the way. You might find some extra work along the way. Well, unfortunately, I can't do that. I'm a disabled veteran, and my wife takes care of me. So I'm at the top right now, unfortunately, of my income. Are you married?

Yes. Okay. Does she work outside the home? No. Currently, she's in school for accounting. Okay. Well, when did she graduate? We just both started school this semester.

Okay. So your income's not locked in or you wouldn't be going to school? Well, we have a GI Bill. I know. My point is that both of you are going to be making more money later. Right, right. So 75's not forever. It might be for the next two years or seven months.

I got that part. But I like it. I like it. Thank you for serving your country, by the way. I'm glad we were able to help you a little bit today. That's my theory and what I probably would do in your situation. Thanks for calling in. Let me talk through that with you.

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Good. Welcome, welcome. Where do you live? Evansville, Indiana. Cool. Well, we're glad you're in Nashville to do your debt-free screen. How much have you paid off? $63,000.

All right. How long did this take? 379 days. Drat on that almost hit a year. Almost hit a year. Almost. One paycheck off. Really close.

Oh, wow. And your range of income? $93,000 to $117,000. Wow. So you had a huge raise during the one year. We did. Excellent. What do you all do for a living?

I do sales for an in-home remodeling company. And I do compliance. So I started in sales as well and then switched over. We work together. Oh, okay. Got you. Good. Very good.

Fun. And so both of you are doing well at your careers, huh? Yes. Does that explain the income jump? A little bit. Okay. All right. What kind of debt was the $63,000? A little bit. Okay. All right. What kind of debt was the $63,000?

A little bit of everything. We had two vehicles, a lawnmower, and then two credit cards. Wow. Okay. So tell me about the vehicles. What did you have? We have a 2014 Chevy Silverado. And then I actually used to have

a 2014 Jeep Grand Cherokee, which was my dream vehicle. And throughout us getting out of debt, we actually paid off the Jeep first. And then I realized, if I sell this and buy a Jeep or car, we'll pay off the truck quicker. So I did that,

and I now have a Volkswagen Passat. So it's not a bad car, but it's not what I want. Not a bad car, but you sold the dream. Yes, I did. It was very hard after we paid it off. You changed dreams. I guess so, yeah.

The dream is still to get another Jeep someday. The dream was to be out of debt first. Yeah, exactly. Absolutely. It was a bigger dream. Way to go. Yeah. That speaks highly of your character.

Thank you. the ability to delay pleasure that's an amazing thing when somebody does something like that i mean selling your car is one thing selling the car that you love yeah is another i made him go to the car dealership by himself because i couldn't do it without crying oh my goodness wow it does hurt it does and the good news is you guys make good money. You'll have that car back or a better one in no time. That's the plan. Hopefully.

That's the way it works out. Yeah. Excellent job. So you're just kind of normal. What'd you owe in your lawnmower? About $3,500. What kind of lawnmower did you finance? It was my dream zero turn.

Your dream. She's got a dream of a Jeep Cherokee, and yours is a lawnmower. Exactly. Priorities. Did you sell that? No. We paid it off. We still got your truck and your lawnmower, and she's driving the Volkswagen.

She's pretty great. The truck pulls the boat, though, so we also have a boat that we paid cash for. Now we're getting to the important stuff. Couldn't get rid of the truck. Well, congratulations, you guys. Thank you. I'm joking around, but you were just kind of normal, weren't you? Yeah.

So what happened a year ago? Something broke loose. So it was actually kind of by coincidence. So we both, like we said, we were in sales at that point, and so we travel a lot. We're in the car, and music just doesn't cut it when you're on the road for hours. It goes over and over and over. Yeah. So I was looking for something different,

podcast, family podcast, something to listen to and stumbled across your podcast and came home and I was like, hey, do you remember that Dave Ramsey guy that we've heard of? And he's like, yeah. I was like, I listen to those podcasts

and I think it's silly that we have debt on our cars even though I thought it was normal. And he was like, okay, well, he started listening to it too and the rest is history there we just kind of jumped on board and neither of us stopped yeah so the uh the podcast infected both of you oh yeah you got the you got the virus oh yeah it's a good thing yeah it was worth it very good very cool so now you how long y' all been married? A little over two years. Okay.

And one year of this plus a month, you've been working on this. Yep. So how does it feel to have no payments? Crazy. Pretty awesome. Yeah. That's a nice truck. It's a nice lawnmower.

It's a nice Volkswagen. Yeah. It's a nice Volkswagen. Yeah. I mean, you're sitting in a pretty good place right now. Yeah. Very well done. So what do you tell people the key to getting out of debt is?

For me, it's more communication. So we're not perfect. I mean, I'm 24. He's 26. We're young. We still have a lot of life to live. And that's what living on a budget makes a huge difference. So sticking to the budget made a big difference for us.

Yeah. And when you fall off the budget made a big difference for us. Yeah. And when you fall off the budget, it's okay. That's where the communication comes in. And just talk about it and figure out what you're going to do to change it. Wait a minute. You're not perfect? I know, right? I know.

Oh, no. We only let perfect people on here. We slip through the cracks. Yeah, that's good. That's good. That's the truth. You do fall off the wagon. Especially the first three months is the cracks. Yeah, that's good. That's good. That's the truth. You do fall off the wagon. Yeah.

Especially the first three months is the toughest. Oh, yeah. Oh, yeah. That's the toughest because you suck at budgeting when you first start. Yeah. And it just takes a little while to get going and to do that. The good news is you actually, when you had no plan, there's no way to know if you're off the plan. That's right. Yeah.

Yeah, we thought we were doing good because we paid off our credit card every month and we were like, oh, that's the goal. That's what you have to do every month so you don't get fees and things like that. But that's not the goal anymore. A lot nicer. So you're 24 and... 26.

24 and 26. And while you're working on this for the last year and a half, 14 months, 13 months, are you hearing these reports in the news and so forth about millennials and how they're stuck and they're clueless and the world is just against them and they're dumb? Because you guys are yet another example. I meet millennials like y'all all the time that are just complete heroes. And does that offend you or do you just look at your friends and go, well, that's them.

They really are that way. Or, I mean, do you know a bunch of others like you? Because I see people just like y'all all the time. Yeah. It's crazy how many people you look around and you see them living paycheck to paycheck. But we do have a good support behind us and our cheerleaders. Who are your biggest cheerleaders? I'd say probably my family.

Some of my brothers. Follow your plan as well. Follow your plan really well. Yeah. So they were always there behind us. My family supported us too, but they're not really the Dave Ramsey fans. They don't get it.

I understand. When we were saying we're not going out to dinner because it's a tradition Saturday nights, we we go to dinner with my family and there for a while we weren't doing that or things like that and they didn't quite get it but they do now yeah well now you're there and you can do whatever so that that's perfect yeah well i guess what i'm asking is as rock star millennials are you not a little bit insulted by people saying that that your whole generation is like stupid or something mean, it's because you're not. Yeah.

A lot of times, being in sales, I go door to door. So I'll walk into people's houses, and they'll just look at me, and they're like, you don't know what you're talking about. You're only 24, or things like that. And it's kind of insulting, because just because we're young doesn't mean we don't know what we're doing, and doesn't mean we're not motivated to learn and try harder. So some people will um some people our age won't take the extra effort to make things nice or work hard but we do so that's all that matters i guess i maybe i'm just i think i've got a skewed

view on this because it's like the vast majority of the millennials i meet are like you guys yeah and you but yet all the news reports are all participation trophy idiots. And I know they're out there somewhere. We work with some. You know a few. Okay. All right. Don't name any names.

We won't. Oh, that's fun. Well, you guys are great. I'm so proud of you. Thank you. Very, very well done. We got a copy of Chris Hogan's book for you, Everyday Millionaires. Thank you.

And we're going to show you how to do that because you definitely will be that. You may be that by the time you're 30, the way you're rolling. Hopefully. You are rocking here. You are absolutely rocking. Well, well done. All right, Matt and Leslie, Evansville, Indiana, 24 and 26. Boom!

$63,000 paid off. She sold the Jeep. 379 days did it 93 to 117 income count it down let's hear a debt free scream 3, 2, 1 we're debt free yeah

yeah I love it I love it now let me tell you there's a data point right there in that story I love it, I love it, I love it. Now let me tell you, there's a data point right there in that story you don't want to miss. I have the benefit, those of you on YouTube have the benefit of watching that couple and watching their interaction while they're talking. That 24-year-old young woman looking up and saying, I'm going to sell the Jeep that I love for a greater good of our family, is light years more emotionally mature and likely to be wealthy than a 54-year-old princess who feels entitled from her little family with her little lips stuck out.

You see the difference? It's called being a grown-up. It's not your age. This is The Dave Ramsey Show. We'll be right back. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they will remake your blinds for free. Free samples, free shipping, and with the new promos every month, you'll save even more. Use the promo code Ramsey.

The question comes from christian in texas i'm 16 years old to make a hundred dollars a week where would be the smartest place to invest my money christian we teach teenagers and our foundations for personal finance that's taught in 42% of the high schools in America right now, to first save $500 for emergencies. If you're 16, you're going to have some things pop up here or there, driving a car, whatever it is that you're going to need a little bit of money for, and you set aside an emergency fund before you start long-term investing. The second thing I would save for would be car, the purchase of a car for cash. And you didn't mention it in your email.

If you have a car yet, if you don't, then you begin saving for that car as aggressively as you can. And when you're a teenager, there is no shame in driving a reliable car that is ugly. As a matter of fact, it kind of says you have personality, and you need to give the car a name. But it's a good car, it's a reliable car, and you don't have any car payments on it. And that's a big, big deal. You will remember, and even your high school friends will remember that car 30 and 40 years from now. Believe me, I'm 58.

I remember every detail about my friends' cars from high school as well as my own. And I even remember the kids who were the quote-unquote richer kids whose parents gave them brand-new cars and how they misbehaved in those cars. I remember every bit of that. And it seems like 20 minutes ago and I'm 58. So you pay cash for your car and it's okay if it needs a name. It's not a bad thing, by the way. Not a bad thing at all. And then the next thing you would save towards is your education.

And I don't know whether your parents are going to help you with your car. I don't know that from your email. And I don't know if they're going to help you with your car. I don't know that from your email, and I don't know if they're going to help you with your college. I don't know that from your email. But you getting a paid-for, in-cash, no-debt education and a paid-for, in-cash, serviceable vehicle are your first two goals. Usually, that uses up most of your money. With the amount of money you're making, that's going to use up all your money. You need to spend some of it and give some of it always.

Anytime you have money, you ought to always save some, give some, and spend some. And congratulations on being out there working and earning some money. Well done, sir. Proud of you. Linda is in Los Angeles. Hi, Linda. Welcome to the Dave Ramsey Show. Hi.

Thank you so much for taking my call. Sure. How can I help yeah i am a music artist and i also need to finish and release an upcoming album um i have roughly eight thousand dollars left in student debt it's all at varying rates about an average of five percent um and then i also have stocks um about ten thousand dollars worth of stocks i can sell immediately what's it take to finish the album probably probably gosh it gets so complicated like you have to do the album and then you have to make music videos um i would say roughly another $1,000. $1,000? Yeah.

Okay. And are you a music, is your full-time job music artist? Is that what you do for a living? Not yet. Okay, cool. What are you doing for a living and what do you make? I work part-time in retail. Mm-hmm. And I'm also looking for like a full-time job to bring in more income how are

you living part-time retail yeah i know i uh i've actually almost gone through my savings okay so uh this is your first project then it's actually not my first project. Okay. Did you make money on the other one? I have to varying degrees. Not much because you don't have any money. Yes, that's right. Okay. Where did the stock come from?

I used my student loan. They gave me a grant, and this is when the market was down, so I used that money. I use my student loan. They gave me a grant, and this is when the market was down, so I used that money to buy some stocks when stocks were down, and now I still have them. Okay. All right. Okay.

So the biggest issue I hear in my conversation with you is not the debt and not your music project. Both of those things can be handled because we can cash out the stock and pay off the debt, and you've got $1,000 for your music project. How much is in your savings? I've gone through my savings. You've gone through it all. So I guess my stock right now. Okay, so the biggest issue I'm coming back to that's scaring me in my conversation is your income.

Right. Because you're going to end up abandoning your music project and not being able to give it any time if you're homeless. Right. So, I mean, we really have to get you a career going. You have a car? Right. I do have a car.

Okay, cool. How old are you? I'm in do have a car. Okay, cool. How old are you? I'm in my late 30s. Okay, cool. All right, so what are you going to do to start making several thousand dollars a month immediately? Because you needed that yesterday. You know, I have a very good question. I feel like I've been barking up so many different trees, pitching music.

Pitching the music stuff? Yeah, that's really my passion. Yeah, oh, I got that. That's your passion. I also get that you're starving to death, and you're about to starve out of your passion. I'm your biggest fan. I want you to take your music career and make all you can make out of it. But until you monetize it, you are going to do what music people have done for generations,

and that's work a side job. Right. Because you're starving to death. Right. I mean, next month you're out of money. Right? You know what? Yeah. No, I understand i i just yeah okay all right it's up to you yeah i'm sorry to be i hope i'm not being mean to you i'm just scared for you i want you to win here and i because if you don't address you there's two sides of this equation

there's the outgo side. In a situation like this, financial people like me, we call it the burn rate. Your burn rate was what it cost you to live versus how much savings you had. And I wish you had done the math four months ago and realized your burn rate was going to have you broke today. So four months ago, you'd started earning an income. You still had a little bit of that savings laying around. That would put you in a much more comfortable place because a desperate artist usually ends up being a broke artist. And I don't want you to be that. I want you to win.

I'm in Nashville. I mean, you know how we get the next country music star's attention? A waiter, right? I mean, people do this all the time. And a bunch of big-time Nashville acts are friends of mine, and almost all of those people had a serious side hustle until they started actually monetizing their music career. And they didn't necessarily have a major career.

They didn't go become a medical doctor or something like that or an accountant and shut down all of their passion, but they had to have eating money with the side hustle, the hustle and grind. And you don't have enough of that coming right now. If you get that part solved, I would just cash out the stock to answer your original question, pay off your loans, and you've got the extra $2,000 to finish your project that you're working on. But then there's no money to eat with next month.

So if you solve that part, then that's what I would do with this stock money. Until you solve that part, I would let that stock sit there because it might be the difference in you and eating right now until we get this solved. Hey, thanks for the call. If I can help further, you give me a call, okay? Chris is with us. Chris is in Austin, Texas.

Hi, Chris. How are you? Hey, thanks for taking my call, Dave. I've been watching your YouTube videos for a while now. I have a quick question for you. Okay. So I have no debt other than a mortgage right now, and I have a fully funded emergency fund. And my question for you, because I know that you've said to many listeners to save 15% of their income.

Yes, sir. And I'm in a fortunate position to have my 401k maxed out with my company bonus. So I'm currently doing 15% after-tax contributions from my 401k and then converting that to Roth. Okay. But my question to you is, should I stop that? Because I'm also paying like $700 a month to pay off my mortgage faster. No.

Why would you have you put 15% of your money into a retirement plan of some kind and then pay off your house in addition to that, regardless of how wonderful your company match is? Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free screen live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.