The Ramsey Show - App - Get Intense and Intentional With Your Money (Hour 3)

Episode Date: January 1, 2019

The show about you

🎵 🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show because it's all about you. Open phones as we talk about you right in front of you. The phone number is 888-825-5225.

That's 888-825-5225. Melissa is with us in College Station, Texas to start off this hour. Happy New Year, Melissa. How are you? I'm good. How are you, Dave? Better than I deserve. What's up?

Okay, I just have a question. So my husband and I are getting ready to start saving for a down payment on a house. Good. And I was looking at the money market rate with our credit union, and it's 0.25%. So I Googled money market rates at higher percentages, and I found some out there, but they're like bigger banks. Like one of them that came up was like American Express or CTI Bank and whatnot.

Do you suggest, do I just stick with what the credit union offers, or is it okay if I go outside of the credit union to find a higher interest rate? Does it really matter? Well, here's the thing. Okay, how much money are you talking about saving and over what period of time? Oh, goodness. It's probably going to be probably like $50,000 in the next two or three years. Okay.

So 1% on $50,000 is $500. Oh, yeah. That's true. A half a percent difference is $500. Oh, yeah, that's true. A half a percent difference is $250. Yeah. And that's what we're talking about here. So I would, number one, did you talk to the credit union in person or did you just look at their website?

I looked at their website. Okay. I'd call the manager and just go, hey, you know, American Express and CIT, they've got these things on their site that's like 1% and you guys are like at a quarter. What's the problem? Because credit unions are supposed to be better than banks. And just kind of give them a hard time, wink, wink, right, with a smile on your face, right? And see what you get out of that.

I do that periodically with my hometown bank and I get my rate up. Now, I got a little more than $50,000 in there, but I'm not exactly, you know, Jed Clampett with Mr. Drysdale or something here, but at least you could just mess with them, right? Because they might have something that's not showing on their website. I'm trying to save for a house, and I need to get around 1% on my money, and I'd like to keep it here in town and you know with the credit union i don't really want to send it to new york but you know you're gonna have to help me out here and just mess with them a little bit shop around your local area but i wouldn't spend you know a thousand dollars worth of my time

trying to make a hundred bucks right okay so just you know kind of i'm probably going to keep it around town there somewhere but i think you can probably get something up around the 1% mark if you're already up to 5,000 or 10,000 savings and you're heading towards 50, you know, while you're saving for your down payment. And plus, you've probably got your other stuff at the credit union, you know, your emergency fund and, you know, your checking and that kind of stuff. And so they ought to be helpful to you there. And that's what I would look for. Open phones at 888-825-5225.

El Paso, Texas. Angelina is with us. Hey, Angelina, how are you? How you doing? I'm doing great. How are you? Better than I deserve. How can I help?

I have a question. I'm a Financial Peace University coordinator, and I'm advising a 16-year-old high school student. She's a former student of mine, and she is graduating a year early at the tender age of 17 this spring, going off to college. She's raised by her grandmother, who can't help her with this question. She received the judgment when she was just an infant due to an accident. It's in a time deposit account, and she cannot have it until she is 18. She wants to know who's responsible for the taxes. Does she have to pay taxes on this money? Is it considered a gift, or is it just going to be on the interest? How is this going to affect her FAFSA as far as disclosure?

Because she does get 1099s every year. And what should she do with it? A lot of questions. Okay. Yeah. Well, FAFSA is just listing out what you have in assets. It is an asset of hers. And once she's 18, it will keep her from getting Pell Grants. Pell Grants are given to poor people, and she's 18 it you know it will keep her from getting pell grants pell grants are

given to poor people and she's not going to qualify because she's not poor but it's not going to affect her for other kinds of scholarships with fafsa so and she does have other scholarships coming in it won't affect that at all only if they're need-based because she's not going to be need-based. How much money is in this? It's just under $13, but what we figured as far as interest over the years, it's probably around $15 right now. They won't give her any access to this at all. It's all through the district clerk. They won't tell her anything until she's 18.

Right. Okay, that's fine. Well, we'll get the money away from those idiots as soon as she's 18, and we'll put it in a good money market account. It's not going to make any money. It's going to be for her to go to school on. It's pretty simple. And keep her in an inexpensive school, as inexpensive as possible.

I mean, she'd go to A&M right there. I don't know. You're in El Paso. My last caller was College Station. I'm sorry. But anyway, the community college is, let's get her through with this money. And it's not a lot of money. Now, as far as whether it is taxable or not, it depends on what kind of settlement it was and what the settlement was for. Well, there was an injury, and so it's

just listed as a time deposit well that's not that's not a settlement that's not a type of settlement there's it would be punitive or compensatory and uh you'd have to go when was the injury well it occurred well she was born two months early as a result of the accident okay so it so it was 20 years ago. Right. All right, so it's probably compensatory, and it could be punitive, depending on, like if a drunk driver hits you in a car wreck or something,

it could be both. You get compensation for your lost compensation, and then they give punishment to the person who broke the law. That's punitive. Right. And so some of that is taxeded and some of it is not taxed. And the interest is taxed, but the interest should have been had taxes paid on it as it went along. No one's paying on it as far as we know, and they won't divulge any information to her. I spoke with the district clerk yesterday, and they mummed the word. Gotcha. Gotcha.

Okay. Well, that's just ridiculous. But they're trying to keep some kid from blowing their money on going to Cabo for the weekend or something on this instead of doing something responsible with it. I get their motivation, but they're being stupid. So either way, when you can find out about it, she just needs a tax professional to look at it and tell her if she's getting taxes on it. There should be some documentation on the original lawsuit that was settled somewhere. Right.

It could be public record. It could be in the family files. I don't know what happened. But it sounds like maybe her parents were killed in an accident. No. parents were killed in an accident and no and her grandmother's raising her and she doesn't know a lot about the situation because it's in the parent's name but now she's a legal guardian because she raised the child yeah so it's real difficult to get any information and so she's just like what do i do what am i supposed to do you know how am i going to pay taxes on this i

doubt she's going to have any taxes so So I wouldn't panic much about that. The main thing is let's just get control of the money and use it for education as soon as we can. And you can see a tax pro, and they can help her figure out if she's getting taxes. But I doubt there's taxes on this. But it depends on how the settlement is structured as to whether there's taxation on it. That's the answer to the question. Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs.

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This is the year you're going to win, but you'll decide if that's a true statement or not. Open phones at 888-825-5225 marquita is with us in atlanta happy new year marquita how are you i'm good how are you happy new year cool how can i help okay so i am in 120,669 dollars worth debt, and we currently bring in $5,334. The math told me that the longest it should take me would be about five years to do it, but we're in an apartment right now, and we're renting, and this apartment has had mold, and I would like to move because our lease is up in April, and I'm trying to figure out would that be a good decision because over the past year,

I went from making $24,000 to $61,000 in salary. Good for you. So you're single? No. I'm married. Okay. You make $61,000. What does he make? $30,000. Good for you. So you're single. No, I'm married. Okay, you make $61,000. What does he make? $30,000.

So you have a $90,000 household income. You have $120,000 in debt. What kind of debt is it? $70,000 of it is student loans, $15,000 for one car and $17,000 for the other. About six is credit cards, and then it's the medical bills. Okay. All right. Cool.

And how much is your rent? Our rent is $904. Okay. And when you move, what would be your rent? That's the thing i'm thinking it would go up because most of the rent around here where we live is from a thousand to about 1200 i really don't want to pay more than 1200 period so well i don't really want you paying more than 900 is what you're paying now that would be nice well Well, if I stay here.

You die of a mold infection. I don't think you're staying there, but I think we're going to say, gosh, we need to move, and we're going to move into something that is $900 a month that's clean. Okay. All right. clean okay all right and um then you got to start asking yourself what have we got to do to get rid of 120 000 worth of debt you got 35 32 000 worth of car loans right that's a lot for somebody living in an apartment okay it's a lot period, you know, you can work your way through this, but I'm probably selling one of those cars if I'm you guys and get me a cheap car. Paid for beater while I get out of debt.

And let's see if we can accelerate this get out of debt process. Have you cut up your credit cards yet? No, you haven't. It's a yes or no answer. Did you or not? No, not all of them. I'm not using them well it doesn't matter get them out and cut them up all right right now all right you gotta decide if you're gonna live in this apartment with two car payments broke the rest of your life or not you're gonna have to do something that's radical

you have to do something that's radical you're gonna do something that's radical kid something's got to change it's time to get fired up i mean you're not even making the playoffs much less winning the super bowl it's time to get with it right right you make freaking 90 000 a year and you're broke i can't really tell i'm making that much. I can. You just told me. I'm using the every dollar budget. And even for this month, like, I budgeted the money, and it's not every dollar. Hey, hey, hey, stop, stop. What I'm trying to get you to realize is that when you get disgusted is when you're going to change. But you're using credit cards.

You've still got your credit cards open. You've got car payments coming out your ears, and you're not winning. You're going to have to get radical to win, and it's going to require a dramatic mindset change. Do you have children? Yes, I have one son. How old is he?

He's five. Okay. When he goes to bed tonight, as soon as he goes to sleep, I want you and your husband to walk in there and look at that sleeping child and make him a promise that you're going to change his family tree by changing your dadgum behaviors. Okay. You can do this.

Yes. Have you two been to the Financial Peace University yet? No. If I give that to you, will you go, both of you? Yes, we will go. All right. And then when you're rich someday, I want you to send somebody else as your gift, okay? Okay.

Because you're going to be rich if you do what I teach you to do. But you're going to have to do it. You're going to have to get fired up. You've got to get disgusted to where you go, I don't care. I'm getting out of this mess. I'm sick and tired of making this much money and being broke. When you get that thing going inside of you, when you get sick and tired of being sick and tired, that's when you're going to change, kiddo.

That's when everything's going to happen. And you're going to quit playing around the edges of this trying to figure out a way to cheat the system. You can't cheat the system. It's freaking math. It kicks your butt until you kick its butt. Somebody's going to win this argument, and you've got to cheat the system. It's freaking math. It kicks your butt until you kick its butt. Somebody's going to win this argument, and you've got to win the argument. So far, math has kicked your butt. You've got $120,000 in debt, and you live in a mold-infested apartment

making $90,000 a year with a five-year-old son. Get disgusted. I'm disgusted. Get disgusted. You can do this. Hold on. We're going to give you Financial Peace University. And you call me back if you need some help as you're doing this.

So, guys, that's what it is right there. Les Brown, the great motivator, says people change their lives when they finally say, that's it. I've had it. I've had it. I'm not living like this anymore. I make too much money to like this anymore. I make too much money to be this broke. That's when you change your life.

And when people get that thing going in their voice, you can hear it. You can see the way they set their jaw. You can see the way their eyes look. You can see the way they carry themselves. They are now going to be intentional and they're not going to put up with a half-butt mediocre life anymore. I'm going to change my life. And that's when you do it. And the neat thing is you can just decide right now to do that.

Ready, set, go. You can just decide. Markita's going to do it. I think Markita's going to do that. Ready, set, go. You can just decide. Markita's going to do it. I think Markita's going to do it. That's why I gave her a financial piece. But you've got to get disgusted. I mean, I remember when we were going broke and losing everything. We're in our

20s. Rachel's a brand new baby. Denise is a toddler. We're so broke we couldn't pay attention. We were starving to we couldn't pay attention. We were starving to death. People calling us and screaming at us. American Express called my house. We owed them $1,166.

They called my house, and the collector at American Express asked my wife, he said, why would you stay with a man that wouldn't pay his bills? He was being an abusive collector, trying to get her riled up to get the bill paid. That's what collectors do. They try to feed on your emotions. She called me crying at work. She said, why did I have to stay with a man that wouldn't pay his bills? I was thinking the same thing.

I got so mad. I couldn't see. Guy told my wife she should leave me. I got so mad I couldn't see. I was ready to go to Jacksonville, Florida to the little collection department there and kick somebody's butt, right? I got so mad. I was so illogical. I paid the bill.

I used our food money. We didn't have any food because I paid stupid American Express. But you know what I did? That was the stupid thing I did. You know what the positive thing was I did? I said, we are never doing business with American Express again the rest of our lives. Any company that would have someone on their employee that acts that way, I'm going to do no business with American Express.

It was 30 years ago. You know how much business I've done with American Express in any form? None. None. Period. Period. Discover car call with a single mom I was coaching. She was in the bathroom getting ready for work. Her child, five years old, picked up the phone and the collector told the child that the discover card was going to come take his toys because his mama hadn't paid the bill.

These are the kind of scum that work at these places. You have to have a moment where you say, I've had it. I'm not putting up with this anymore. When you have that moment, you'll change your life. And until then, you're just going to be mediocre, little rant here for a minute. I took a call from a father who wanted to know how to plan for the care of his special needs daughter after he dies. Why is it that parents of special needs children are so deliberate in their planning, while other parents have a tendency to be sloppy? Do the needs of your family matter less if something happens to you? Oh, I'm sorry.

Did I just guilt trip you into getting some term life insurance? Well, then good. Your family needs you to step up. Having the right amount of term life insurance is a matter of personal responsibility. If you want to use the new year as a reason for doing the right thing, then do it. Term life insurance is something every family needs, which is why I talk about it every day. It's not complicated. It's not expensive, and you need to do this now. Zander Insurance is the only place I recommend.

Visit Zander.com or call them at 800-356-4282. Please learn from other people's mistakes and get this taken care of. That's 800-356-4282 or zander.com. Salt Lake City's on the line. Tyler and Chelsea are calling. Hey, guys, how are you? We're great. How are you? Better than I deserve. I see on my screen you're debt-free.

Congrats. Thank you. Very cool. How much have you paid off? $99,000 in student loans. Love it. And how long did that take? About 45 months.

Good for you. And your range of income during that time? So we started out right out of grad school, making about $60,000 a year, and ended up about $100,000. Cool. What do you all do for a living? I'm in video work, so I do all kinds of video projects. And I'm a stay-at-home mom. Okay, cool. So you did grad school work in video work, so I do all kinds of video projects. And I'm a stay-at-home mom. Okay, cool.

So you did grad school work in video? Yes. Really? So you got a master's in... Tell me about that. What's your degree in and what is it? Yeah, we went to L.A. and I got a master's fine arts degree in film producing. Wow, good for you.

Okay, Cool. And $99,000 in student loans, and almost four years later, they're gone. How long have you guys been married? We just had our 10-year anniversary. Okay. So what happened four years ago that started this journey? So we always kind of were very stressed about loans and debt. And right when we started, it was definitely heavy at first. We started on a, as I estimated, it was a 14-year trajectory to pay off the debt.

And we were paying $1,000 a month. And so that's how it started. And we started so slow. But what's really interesting is about two years of the 45 months, we did without your plan and teaching, and then the second half is when we found you through podcasts, and that's when it really got going. Okay. So how much of the $99,000 was paid off in the last two years?

So that's what's funny. So we paid off about $10,000, $15,000 or so in the first two years so that's what's funny is so we paid off about 10 000 15 000 or so in the first two years and all the rest of it came after that once we started on the baby steps wow wow and your income went up but it didn't go up that much right right it was just being a lot smarter with a decision making for sure you just got intense and intentional it sounds like yes man so you're saying you did like 80 grand in two years roughly yep wow that's that's killing it man way to go you guys how's it feel to be completely free so good so awesome yeah what do you tell people just the stress relief is everything. That's what it was for us is just to not have it hanging over our shoulders

and just being able to have the freedom and the justification to be able to, you know, spend money where we want to spend it instead of just it going to interest and we're just losing it for nothing. Yeah. And not having this hanging over you, like you talk about the stress, the stiffness in your neck across your shoulder blades, because it's real. I mean, everybody says it's the weight of something, and they mean that metaphorically. But you know what?

It literally has a physical effect, doesn't it? Absolutely. How does that work? I was always stressed, and I was working through the whole 45 months. I don't think I ever was working less than three jobs at a time. And a lot of it is freelance. But there were times I was up to working five jobs at a time and just always grinding. And it was not so much the hard work wasn't so hard.

It was the stress of knowing, like, oh, we have to make this much or we have to make more to get rid of this debt just because of the stress of it. Yeah. So in your world, in the world where you're creative and really what you're doing is an art form, how much does it change your career now that you don't have that stress hanging over you? Well, honestly, it's all about the freedom, right? Because now I can choose what projects I want to do before I was just scrapping to get anything I could. So now you have creative opportunities to say, I want to do this project, not I need to do this project. So I think that's the liberating feeling. We could, now we're available, we can move somewhere if we want. I think it's nice to be available for God and wherever we need to go to serve that we

have that availability to not have anything tying us down. What do you tell people the key to getting out of that issue, too? I think being on the same page and really communicating where things are going. I mean, during the process, we had a lot of people that, you know, would kind of doubt what we were doing. And I think coming back to each other and talking about our ultimate goal made a huge difference. And the other thing was the EveryDollar app. It made a huge difference in being able to stay on the same page

and having our budget be easier. Yeah. Wow. Good for you guys. Very well done. Congratulations. easier yeah wow good for you guys very well done congratulations well we've got a copy of chris hogan's retire inspired book for you signed by the man himself number one bestseller and that is the next chapter in your story that we want for you we want you to be millionaires and outrageously generous and you are well on the way congratulations thank you tyler and chelsea salt lake city 99 000 paid off in 45 months

making 60 to 100 000 count it down let's hear a debt-free scream Well done! Well done, you guys. Your phone skipped out on them. Those gated phones. Oh, my goodness. Well, congratulations, you guys. Very, very proud of you. Well done.

Very, very well done. Ron is in Effingham, Illinois. Hey, Ron, how are you? Nervous. That's okay. We've never lost a patient. How can I help? Well, I've got $51,000 worth of old, bad debt that I'm trying to settle.

They're all judgments, and I'm 66 years old. $5,000 on one of them, and I'm trying to settle it. I've offered them $3,000, and they've come back with $4,000. Am I expecting too much for that to get them down the rest rate of $3,000? Different debts will traditionally settle at different amounts or different percentages. What kind of different debts are involved here? With that $5,000 one, what is that? That's an old Citibank credit card. They're all credit card debts.

Oh, they're all credit card. Okay. Well, that makes it easy. And how old are these debts? How long has it been since you paid on them? Probably nine, ten years. Okay. Now, there's no possible way, unless you just have the money, extra money,

and you're going to use it to pay the debts in full, there's no possible way I would pay on a $5,000 debt any more than about $1,500 if it's 10 years old and it's old credit card debt. Most of that debt has now been sold to a debt buyer, and they will buy those debts at two to three cents on the dollar. Yes, I understand. And so that means that they have $200 invested in this $5,000 10-year-old bad debt. Maybe $200. Yeah.

And so, yeah, they'll settle for less. They're just monkeying with you. Well, they ain't going to monkey very long. But I've offered them three on that particular debt, and they won't do it. Yeah, well, just wait. Just say, listen, there's three over here. I've got 55,000 of other people i can talk to over here and when you guys you know when you guys want some money and you want to get serious about your settlement offer call me because until then i there's no possible way i've given you my offer

it's three and and if you don't take the offer right now there won't be three because i won't have it i'm getting ready to give it to somebody else. The other thing is I'm also 66 years old. Yep. And my income is mainly non-attachable. Right. So they can't get it to anyone else. Right. I know that.

You're what we call judgment-proof, meaning they can't get at you with a judgment. And do you have substantial assets? I have nothing. I have $13,000 that I could use towards this $51,000. Yep. But I don't want to. That's money that we use. Well, what I'm saying is if you have a paid $400,000 house and you pass away, they're going to get paid.

That's their only upside. And so I just tell them I'm 66 years old. I'm on a fixed income. You know, Social Security, you can't get at it, guys. And this is what I'm offering you, and you should take it while the getting's good. You should get it while the getting's good. This is the Dave Ramsey Show. Our scripture of the day, Proverbs 24, 27, prepare your work outside, get everything ready for yourself in the field,

and after that, build your house. Earl Nightingale says people with goals succeed because they know where they are going. Louis is on the line in Jacksonville, Florida. Hi, Louis. How are you? Good. How are you? Thank you for taking my call, and Happy New Year. You too, sir.

Happy New Year. How can I help? So we have been working on that snowball now for for a few months now and uh it's looking very good we're we're looking at october to get our debt except the house but i think we hit a wall when i started listening to your podcast and you mentioned that the debt on on the business is part of your snowball in cases. So I wasn't sure how to treat my business debt because it's quite big. And I don't know, it's wait until I finish my personal. No debt except the house. What kind of business debt do you have and how large is it?

So I have two businesses. The one that had the bigger debt is a real estate business. I have an office condo that I rent myself, and that one is about $250. So that's more like real estate debt. Real estate debt, exactly. And then the other one is on the real estate in the same business that I just purchased. And I made this purchase before starting to listen to you. If I knew this, I wouldn't do it.

But I already have the debt, and it's all at $265,000. And it's an empty lot that I was planning to develop it and rent that other space for myself, too, as a business, too. And now there's a little bit over $500,000 between both of them. And I wasn't sure if I should have tackled those in my personal debt or just... Well, I think they're both real estate debt is what they are. Yeah, they are. And I would put them at baby step six. As far as the second deal goes, it sounds like it's got a lot more risk in it.

Are you going to have to spend money to develop it? Yes, and it's a lot of money that might be something you want to just turn that piece of property and go ahead and clear that debt okay you may not want to have the equity on it so yeah but the point is the point is if you don't do something with it it's an empty lot. It's an alligator. They're eating interest on $265,000 every day until you do something with it, and you're going to have to spend a million dollars or whatever to do something with it, right? Correct. So I think the problem is you can't do anything with it. So whether it's going to be equity or not, I'm probably getting rid of it

because I'm not going to tell you to go into the million dollars in debt to develop that. Let me tell you, the number one place people go bankrupt in real estate is development. You can make a lot of money and you can lose a lot of money. But more developers go broke than builders. More developers go broke than investors. More developers go broke than landlords. It's just it catches you. And there's just so many unknowns. And every time you touch something, it's an extra zero.

So you really have to be in a strong cash position to do development with low risk. And you're not. That's what you're telling me. So I'm probably turning that piece of property and keeping the other one, and I'll move that other one into a baby step six scenario. John is with me's in columbus hi john how are you i'm good dave how are you better than i deserve what's up awesome i just wanted to start off by saying thank you to your team um kat and dorothy especially were great to us when we came for the pre-screen last month oh cool thank you um my question i listen to you all the time. I never

heard you discuss the option of rebalancing on my retirement funds. I wanted to know about that specifically because I've identified four funds. I have a large cap, a small cap, a stock, and a foreign fund, and the foreign fund underperforms the other one by like 4% pretty regularly. And so I feel like rebalancing would be a good idea, but at the same time I don't want to be shuffling money from the funds that are performing well into that one. Yeah, and it's, you know, not that big a deal. I do not rebalance mine unless I look up and something's just way out of kilter,

and I mean like way out. Like if I look over and, you know, there's a million dollars in aggressive and everything else has got 100 in it, then I've gotten, you know, that thing's just overperformed everything else for some reason or another, and then I'm probably going to do a reset. But I don't reset every year and move 20,000, 30,000 bucks around or something like that in my 401K. If I look up and it's way over to where the point of being across the four mutual funds, 25% in each, growth, growth in income, aggressive growth in international, is to be diversified.

And then if one of those categories outperforms and you end up with more in there, as long as you've not lost the benefit of being diversified, and that would mean that you're like way oblong in one of them, then I'm not going to bother. I haven't personally bothered to rebalance. It's not bad if you do. I'm just not all obsessed about the nerd aspect of everything has to be equal all the time. The idea is spread your money into different categories. And then if it makes you nervous because it's not so spread because again it's too heavy in one that's when i would personally do it um i'm not mad at you if you want to rebalance some of it makes you feel good and you like everything just

perfect or whatever i'm kind of ocd too but um i just i haven't done it and that's the reason i haven't done it is that the principle of diversification is to spread your money around to limit risk. It's not necessarily that it has to be all exact. Now, I do it exact going in, but I know the results are not going to be exact. My foreign funds, my international funds have never in 20 or 35 years of investing. It's the weakest of the four categories. Always. Almost every year.

To the point I'm so disgusted I've even thought about after 25 years changing the formula. But I'm not going to. But it's just it's the one category that just it's not like horrible. I mean, I don't lose money on them, but they just never i'm just never excited about them and um and i guess that's a good thing it means the american economy is outperforming the other economies in general and um that's what it means uh and so you know that that part of it's good news and that's been true for 35 years so we'll see what happens in the next 35. Phillip is with us. Phillip is in Atlanta, Georgia. Hi, Phillip. How are you? I'm doing quite well, Mr. Ramsey. Good. How can I help? Okay. All right. So I am a medically retired Marine.

Once I decide to collect on roughly around $2,000 a month, I'll get that for the remainder of my life. So here's what my situation looks like. I have roughly around $17,000 in credit card debt, another $129,000 worth of loans outside of my home. My home, I just got another $186,000, and I made the stupid mistake of getting a new car. So moving into step two of your process, I wanted to find out if I'm being too aggressive and saying that, yeah, I want to get everything paid off in like, you know, five, six years.

What is the $129,000 is an accumulation of two cars, two student loans, and another loan from the bank I go with. Okay, and does that include the new car you bought? Yes. Okay, all right. And what is your household income? Household income is roughly $189,192. Oh,2 oh great okay that's good news because that's bad you got a lot of debt but at least you got a great shovel right so thank thank you for your service what do you do for a living i am a network engineer telecom engineer good for you way to go

yeah i mean not counting the home we tell people in baby step to list their debts smallest to largest pay minimum payments on everything but the little one and attack the little one Yeah, I mean, not counting the home, we tell people in Baby Step 2 to list their debts smallest to largest, pay minimum payments on everything but the little one, and attack the little one. And so it looks to me like you've got about $140,000 worth of debt, give or take, not counting your home. You make $192,000. If you lived on $50,000, you'd be debt-free in a year. That doesn't count taxes, so you should be debt-free in 18 to 24 months. Okay. But that means you're not debt-free in 18 to 24 months. Okay.

That means you're not going to have a life during that time. You're going to straighten up your dadgum spending, because you've got to spend money like you're in Congress around there. Yes. Yeah, it's time to stop, man. You're going to have to get that stuff balanced out. You're going to get killed, man. I mean, you make a lot of money to be as

broke as you are, and it's time for a change. Hold on. I'm going to send you a copy of money to be as broke as you are. And it's time for a change. Hold on. I'm going to send you a copy of the book, The Total Money Makeover. And again, thank you for your service. Thanks to James Childs, our producer. Blake Thompson is our senior executive producer. Kelly Daniels, our associate producer and phone screener.

I'm Dave Ramsey. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey guys, it's Blake Thompson, Senior Executive Producer of The Dave Ramsey Show. This hour of the show is over, but you can also watch on our free mobile app, our website at DaveRamsey.com, or on the Dave Ramsey Show YouTube channel. We are everywhere to serve you.