The Ramsey Show - App - Get the Rhythm of Saving for College in Your Life (Hour 2)

Episode Date: May 27, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. We're glad you're here. The phone number is 888-825-5225. Joshua is in Charlotte, North Carolina. Welcome to the Dave Ramsey Show, Joshua. Thank you, David.

It's an honor to speak with you. You too, sir. What's up? Well, we just finished week six of STU, and my wife, after watching the video, looked at me and said, we need all this insurance now. So I said, yes, now. And then I called Xander and got signed up with IdentitySafe, Term Life, and Disability Insurance.

So thank you for that. You're welcome. My question is, we're working on the debt snowball. We're down to two major debts. We've got student loans, and we've got one medical bill that came up that was unexpected. My question is this. The student loans are divided out into five different segments. Should we work the debt snowball working the small student loan up,

or should we go ahead and get the medical bill that's smaller than the student loan as a total? How much is left on all the student loan as a total. How much is left on all the student loans total? $12,000. Okay, and how big is the medical bill? $3,200. Okay, so it's going to fall in the middle probably of these student loans, right? Well, almost at the end, yes, sir.

Okay, all right. Why do you have a $12,000 medical bill? No, no, no. $12,000, Stephen Law. Oh, I'm sorry. Your $3,200 medical bill. That was your deductible plus your co-pay. Yes. What's your household income?

Seventy-six. Okay. So this is all done in a year or less anyway? Yes, sir. Okay. All right. Okay. So this is all done in a year or less anyway? Yes, sir. Okay. All right. Good. Well, what the normal answer is, I do not count student loans as a category.

I count them as individual debts. And so normally I would just list them smallest to largest, pay minimum payments on everything but the little one, and attack them down that order, okay? The difference is that do you already have the $3,200 on payments with the company or with the provider? No, we haven't set them up yet. Okay, all right. And what are your smallest student loans, your two smallest ones?

$1,900 and then one for $2,000. And then you'd get to the $3,200? No, then I'd have another one for $2,100, then $2,700, then $3,200, and the last one. Yeah. That's what I'm saying. There's going to be a while. Yeah. The downside is this.

The medical bill technically is not a debt on payments. It's due in full today. Mm-hmm. They put it on payments because it goes into collections and they don't think that you can pay them 3200 because you can't um and so there's a little bit of me that wants to move that to the very front um and save it up and ask them for a discount on it um and try to get it knocked out, really fast and get it out of the way. I probably would do that, and the reason is that the medical bill is, again, it's not a, you didn't get, they didn't offer you terms.

They didn't offer you an interest rate and the number of payments. You went in and got the medical, and it's due. The whole thing's due. The payment that's due is $3,200. It's not, you know, 10 payments of $320. It's due the payment the payment is due is 3200 it's not you know 10 payments of 30 320 it's due now um the the good news is this you're going to be done with the whole thing really fast anyway so um that that should not take what two months you should be done right yeah so yeah go ahead and put it at the front and let's just get rid of it and then and

then list your student loans not by category but by individuals smallest to largest and the reason is not because the i'm not willing to lump the category together the reason is the reason i'm moving the medical bill up is it's a it's a bill that's due in full today just no we do not put categories in the debt snowball we put individual debts in the debt snowball uh and so i would put your individual student loan debts in the debt snowball but because the medical bill is due in full today i would move it to the front and get it done and you and because of your ratio of your income to it you can knock it out really fast so all of that is the way to look at it um if it was a medical bill

you had to drag out for two years because it was so huge and you're going to have to pay payments on it then i would just slap it down there at the bottom and pay payments on it james is with us in parkersburg west virginia hi james how are you i'm. Ramsey. I know you're doing fine also. Yes, sir. How can I help? I'm 73, and I'm a full-time letter carrier with the post office, getting ready to retire. And my wife and I have a thrift savings plan with about $96,000 in it. And I understand when I retire, I've got to start my withdrawals out of this plan or do something with that money. We do not have any kind of mutual funds.

I don't even have a computer. I don't know much about anything. My wife and I aren't that smart. But anyway, I was smart enough to call you. And you're smart enough to have $100,000 saved. Well done, James. Yes, our house is paid off, and we don't owe any bills either. Okay, all right.

But I just really need some advice, some help from you as to how to handle my thrift savings money. If I withdraw it all in a single payment, I understand it could be up to like 20% taxes on that. Yes, or more. Or more. And I don't want to give the government any more because I've worked hard, you know. I agree. I agree. To get my money in there.

I would talk to them. I think they have a plan where they can just set up payments coming out. Yes. And it'd be a retirement type payments and it comes out and um i would want to set it up where it was um you know eight thousand have you got it have you got it in the c plan what have you got it in no it's in the government plan because as i was getting closer to retirement i didn't want to take a chance in losing any of my money okay all right yeah um if you're going to leave it in there long term and take just payments if you're going to leave it in there long term

and take just payments and you're going to just take payments out of it i would move most of it to the c plan because you're not you know you are at retirement but the money needs to keep growing and then you could pull maybe eight thousand dollars a year nine thousand dollars a year out of it give or take okay something like that the other thing you can do that actually would be better, but it's more complicated, is run down to the library or something and jump on the computer and click SmartVestor on our website and find a SmartVestor Pro in your area, which is a financial advisor that we recommend.

They don't work for me. Sit down with them, and you can do a direct transfer rollover to an IRA in mutual funds, you know, upon retirement, and roll the whole thing over, and then you've got complete control of it, and your advisor is going to help you set up monthly payments coming out of those. You are required on an IRA, if you're over 70 and a half, to pull a certain amount out every year. But it's not lump sum, and you'd have no taxes by rolling it over into an IRA. You could pick mutual funds and design them however you want based on what you feel good about risk. You can talk to them, learn a little bit about it they can teach you and you make the choices then and you can set up how much

comes out of it but congratulations you worked really really hard get your house paid for you got a hundred thousand dollars you're ahead of most my brother well done this is the the Dave Ramsey Show. 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. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance.

It's Christians financially and spiritually 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. Thank you for joining us, America. We're glad you are here. Open phones at 888-825-5225. Kevin is in Philadelphia.

Hi, Kevin. Welcome to The Dave Ramsey Show.25. Kevin is in Philadelphia. Hi, Kevin. Welcome to the Dave Ramsey Show. Hi. Thank you, sir. I appreciate you taking my call. Sure. What's up? Okay.

So, real brief. 43 years old, household income, $200K. But we've got a real mess on our hands. We're $200K in debt. And I'm just done with that. I want it gone. Good. I have $83,000 in a 401k.

Talk me off the ledge here. Can I cash that out to start paying this? No. No, you're going to pay a 10% penalty plus your tax rate of 35%. That's a 45% interest rate on your money. Why would you do that? I guess that. Okay, gotcha.

You're off the ledge now. Okay, let's work on it, though. What kind of debt is the $200,000? Well, it came from both sides of the marriage here. $50,000 in my wife got on a home improvement loan and student loan debt. How much is student loan debt? Credit cards. improvement loan and student loan debt. How much is student loan debt? Credit cards.

How much is student loan debt? Student loan debt, $50,000, $55,000. Okay, how much is credit card debt? Credit card debt's bad, $65,000. Okay, and what's the other $35,000? So we're looking at cars. The cars are actually decent, $11,000 car, $5,000 car. And then what am I forgetting here?

The house is paid off. However, before we got married, I had bought a house too. So that is now a rental property. What is it worth? What's it worth? I'm upside down on it, actually. The area where I'm at has gone down in value. I owe $138,000, and the realtor is probably saying I'll pull in $138,000,

so with fees and commission and all that kind of stuff, I'll be upside down. I want to be out of that as soon as I can get close to right side up, probably a year or so. Okay. Another year or so, let's get rid of that. That thing is a problem. Okay. That's a problem, child. And you make a $200,000 household income.

I would stop all investing, I would stop all travel, and I would stop eating out. Yeah, we've done all of that. I mean, if you pay $100,000 a year, you're done in two years. Right. You can't quite do that, but you probably come pretty close, because you've got no house payment, right? Right, right. I mean, you've got a renter in the other one, and it's losing money,

but it's close to breaking even. Right, we're breaking even on that, so I mean, it's kind of paying for itself. Sort of, yeah, by the time you have a repair or so, it's not. But, yeah. Exactly. Yeah. It's a good thing to get rid of. It's more of a liability than an asset at this stage of the game.

But, yeah, I don't see anything big other than you guys are really going to have to chop the lifestyle. So, this is the second marriage you said for both of you? No, I'm sorry. It's the first marriage for both of us. We just brought that into the relationship, you know what I mean? Gotcha. How old are you guys?

43. You said that. You said that, yeah. Okay. Yeah. No, we don't want to cash out the 401, but we do need to do what you're talking about, which is a dramatic shift in our view, our intentionality around money. Is she on board with that?

Yes, she is. We are both gazelles right now, I guess you'd say. Gotcha. Okay. Well, you can afford it, but I'm going to give it to you anyway. I want you to go through Financial Peace University, our one-year membership. Join one of the groups. Go to the group.

Watch the videos. Watch the videos online. Get on the EveryD the every dollar budget that's tied to your bank, tie into everything here and really surround yourself with a whole new way of thinking and people with a whole new way of thinking because it is time to clean up this mess. You are right about that. But no, I would not cash out a retirement account except to avoid bankruptcy or foreclosure. You're not facing either one of those because, again, you're going to get hit with about 45% in taxes and penalties if you do that. And you do not want to do that. Don't want to do that. Trina is with us in Milwaukee.

Hi, Trina. How are you? Hi, Dave. How are you doing? Better than I deserve. What's up? I have a question for you. It's just ironic. We just finished our study this week in my home for financial peace, and we did the insurance portion.

So I have a question. We own storage facilities. We have over 2,000 tenants. We use a cloud-based storage software. Our insurance guy came in today and said that we need to purchase a data breach insurance policy that's going to cost us around $5,000 a year to cover if any credit card or personal information is breached. He said without it that we would have to pay $70 per customer to get the mess cleaned up, which could be up around $140,000 a year for the 2,000 tenants. So what do you recommend? Because I know you have an empire, and I know you cover your stuff.

What do you recommend? I do not carry that. I don't know if I have an empire or not, but we have a lot of customer interaction, a lot of customer transactions. What we do is we spend a lot of time and a lot of effort and a lot of diligence making sure that the customer data is protected and is not breached and all the proper steps in there. And before I spent $5,000 on an insurance policy, I spent $5,000 on somebody to come

in that knows technology and helps make sure you've got proper firewalls and that your procedures are all pci compliant and um all of that to make sure because you're handling people's debit and credit cards right correct yeah and if you're handling that data you need to be pci compliant is what it's called and you don't need to you know the insurance policy it's no no no. $70 is, I don't know where he gets that. I mean, you can buy identity theft protection for everyone involved if you wanted to, but that's usually more of a PR move than it is anything else. The data's gone by the time you get there. There's no law that says you have to buy everybody identity theft protection

if your customer database gets stolen. There's no law that says you have to buy everybody identity protection if your customer database gets stolen. There's no law that says that. And if you're buying a block of 2,000, you wouldn't pay 70 bucks a head for it even if you did. So that's just a number that somebody made up. Now, I don't own that insurance. I would spend the same money maybe, might spend more, making sure that your systems are all being done properly, that you're not just, you know, you've not got some gaping holes. You haven't left the barn door open and then wonder how the cows got out kind of thing.

So let's, you know, check your firewalls, make sure your processes are PCI compliant, how you're handling the data, how you're handling the debit cards. If you physically touch them, it makes a difference. All of those kinds of things. Oddly enough, I was just briefed on this in one of our board meetings the other day. Our security team came in and was walking us through some things we needed to change, minor things, but they were updating us on what we have to do to maintain that this whole process is right.

So anyway, hey, that's how I would do it. And no, I would not buy that insurance because I haven't bought it. So I can't tell you to go buy it. That wouldn't make sense. Fred's in Long Beach. Hi, Fred. Welcome to the Dave Ramsey Show. Dave, are you still better than you deserve?

I'm always better than I deserve. If I wasn't me, I'd want to be me. What's up, man? That's good. Hey, question for you is, just got done with SPU and was looking at buying term life insurance. Now, I know you guys talking life insurance, term life insurance, like buy a $500,000 policy for 15 years and buy another $500,000 policy for 30 years? Instead of recalculating your policy at the end of, say, 15 years, if you needed less, would that be wiser? I don't buy any 30s.

I'd buy a 15 or a 20, and if you want a tier of a couple of those, you can, because here's what the reality is. The reality is your life is going to change and shift, and so you're going to end up buying more policies, doing different things as you go along, and so you're going to end up with a series of policies, not just one policy that as you go along. And so you're going to end up with a series of policies, not just one policy that lasts you 20 years. The number of times people do that is very, very low. And the weird thing is that life insurance continues to drop

due to marketplace competition and due to the fact the insurance companies continue to update their actuarial tables to more accurately reflect actual death age and so forth. And so health has improved since the tables were used. They calculated a lot of the policies that are out there today. So I would buy a 15 or a 20, maybe two that way and tier that, but that's the most I would do. We'll be right back. Tulsa, Oklahoma is calling. Gina's on the line. Hey, Gina, I see on my screen you're debt-free.

Congratulations. Thank you. I am so excited, Mr. Ramsey. And other than faith and family, you have been the biggest blessing of my life. Well, I am honored. I'm proud of you. Congratulations. How much have you paid off?

Just over $76,000 in almost 28 months. Good for you. And your range of income during that time? $73,200 down to $66,000. Okay, so your income went down. Tell me about that. I paid almost $49,000 over the first 27 months, and I had $3,300 of consumer debt left and $24,000 left on my house in the last two weeks and sold my rental property, which you told me to do. Okay, all right. So that's how I bumped from baby step two to baby step seven within about 10 days. Got it. Wow, you paid off your house and everything. I did. So what's your house worth? Oh, don't get too excited. It's a double-wide trailer.

I'll take it. It's paid for. I know. Maybe $35,000 to $40,000. You probably won't remember the call, but I called to check with you and was trying to do a handicap remodel on my home because my mother lives with me. And you told me to sell my rent house that I had from a divorce. So that's what cleared everything.

Okay. And now you're set. I am. Well done. I'm very blessed. What do you do for a living? I'm a full-time teacher and part-time administrator in a small school in Oklahoma. Very cool.

Good for you. What kind of debt was the $76,000? It sounds like $24,000 of it was the trailer. Well, altogether, $30,000 of it was the house from the beginning. Okay. I had a car, was 18 000 i had five student loans left after 30 years of paying them wow um seven medical bills because i had three surgeries within 15 months and then five personal debts wow how old are you i am 49 and you are are 100% debt-free. Yes, sir, I am. And celebrating daily.

Every single day. I love it. How does it feel to not have a single payment in the world? Oh, I can't even tell you how much lighter it is. My stress is less. My motivation is more focused. And I may never get to be a millionaire, but I can also see the light at the end of the tunnel now. I don't know why you wouldn't.

You've got 20 years left making $70,000 a year. You ought to be a millionaire, but I can also see the light at the end of the tunnel now. I don't know why you wouldn't. You've got 20 years left making $70,000 a year. You ought to be a millionaire. Yeah, I am very excited about where the future goes with us. Congratulations. Thank you. Proud of you. Did you have people cheering you on or saying you were crazy? Not to my face.

So whether they wanted to be or not, my children and their spouses were my group text accountability partners, and everybody was very supportive. But if they downplayed me, they didn't do it to my face. I didn't have a gut. You were on fire. Not really. So when people hear that you're debt-free, house and everything, and they say, how did you do that? What do you tell them the key to getting out of debt is? You did it. Well, everyone says the budget and the cash envelopes are key, and they say, how did you do that? What do you tell them the key to getting out of debt is? You did it. Well, everyone says the budget and the cash envelopes are key, and they definitely work. But the thing that worked best for me was being honest with yourself from day one.

You're the one that knows how much you can cut and how much you're willing to do without, and only you know if you can do more. I'm a salaried employee because I really couldn't do anything to increase my salary. And with my health issues and my mom, I don't really have marketable skills or time to do manual labor. So I had to be content with cutting things and changing things in my situation and be content with my progress and had to work to try to commit to the balance between contentment and covetousness.

Wow. Good for you. You've worked this. You've worked this in your head. This is well done. Very well done. We've done very well. We've shared financial peace and taught it a couple of times, and we've even brought the Spanish version to our parish in this last year. Wonderful. I'm excited about that. Wonderful. Thanks for doing that. Wow. Look at you. Congratulations. What was the hardest part of this whole thing for you? Oh, Lord, patience. Patience is not my strong suit. So when I pulled up a 30-page credit report that documents my stupidity since I turned 18 and looked at all the money that went through my hands

and how different my children's life and my life would be, it was very hard to be patient and wait for that check to come in each month to do what I needed to do with it. So 30 years and four degrees later, my student loans was the last debt I paid off except for my house. Well done. Well done. Yeah, it is hard. Once you get going, it's hard to wait on the money.

It's like I'm looking forward to getting paid because I want to see what the progress is each time. Yeah, I can drop it on some debt. Yeah, it's a different thing. You've really, it sounds like just listening to you in this two and a half year period of time have really personally transformed, haven't you? I have. I've been on a journey and I have been able to embrace my faith even more and that has helped me to bless others. In fact, just two weeks ago, I got the tax information because I kept back some money in case I had to pay capital gains on the house. And it came in a lot less than what I had planned on.

So I was able to bless a family in South America through a program and buy them a house. Wow. So it has been a blessing not only to me but to others. Mr. Ramsey, and it's all started with your program. Very powerful. I'm so proud of you. Very well done. Very well done.

You are a hero. You played this well. And it's just beginning because the next chapter is where you do become a millionaire and you continue to be outlandishly, outrageously generous as you go along. Well played. Well played. We're going to send you a copy of Chris Hogan's book, Retire Inspired, to make sure that happens, signed by the man himself.

Thank you. It's a number one bestseller, as you probably know by now. Gina in Tulsa, Oklahoma, $76,000 paid off in 28 months, including student loans that have been there for 30 years. Did this making $73,000, now down to $66,000 a year. Count it down. Let's hear a debt-free scream. Three, two, one.

I'm in debt-free! I love it! Yeah! There you go. Man, well done, well done. Tony is in Springfield. Hey, Tony, welcome to the Dave Ramsey Show. Thank you, sir.

I have a retirement question for you. Okay. I have a little over a million dollars between my 401K and my Roth IRA. I'm 64 years old. And when I turn 65, I plan on starting to withdraw about $4,000 a month. And if I start taking from Social Security, I can get $2,400 a month. Or if I wait until I'm 70, I can get $3,400 a month. So my question is, when I turn 65 and a year from now,

do I draw the Social Security at $2,400 and take out $1,600 for my 401k forever? Or do I wait until I'm 70 and then just take out $1,600 for my 401k forever, or do I wait until I'm 70 and then just take out $600 or $700 for my 401k? Yeah. Neither one is necessarily mathematically big time better than the other one. The only thing that comes into play for me is, A, I don't know what they are going to do with Social Security long term. I'm not predicting the failure of it, but it's mathematically a disaster.

And so eventually someone is going to have to build up the political capital to deal with the disaster that is Social Security. That might mean trouble for me and you, you know, in how much we get or when we get it. The other possibility is that you die before you get your money. Exactly. And, of course, it's gone forever. So based on those two things, I generally take it as early as I can take it, as often as I can take it, even if I don't need it, so that I can just

plow it back into my life. And all of that, you know, the wonderful job you've done saving and investing is going to be there. That is going to survive you. It'll go to your ears regardless, but your Social Security won't. So I'm going to take it early, often, just in case. I'm not predicting bad things for you or even from the government but just in case there's more downside than upside with that puppy for sure right so so did you start out a millionaire

do people give you money you inherit a lot of money a lot of work a lot of savings a lot of side side jobs and a lot of not spending the combination just kind of worked over the years. How much have you inherited? Zero. Both my wife and I have a high school education, never went to college, but we just worked hard and smart and invested. What was your career? I was in the building materials for a long time, and I've been flipping houses for probably 20 years. I was doing one or two houses a year when I was working, and then when I retired nine

years ago, I've been doing two or three houses a year, just kind of playing with it, and it's just been fun, and it's been financially great. Yeah, well, you're doing it all with cash, it sounds like. Well done. Well played, sir. Well done, man. There's another millionaire starting from nothing, but you can't do it today in America. Yes, you can.

He did it. This is the Dave Ramsey Show. Peyton is with us in Jackson, Miss. Hey, Peyton, how are you? Doing well, sir. Thank you for taking my call. Sure, man. What's up? 33, feeling a little overwhelmed and anxious starting the process.

I have Financial Peace University. Started with my wife. I have a little bit of debt. But my main thing is, I got married five years ago. Moved out of my house into my wife's. Kept my house because it was very cheap, and now my mother is in it. She takes care of all the bills, and I have a brother that's incarcerated that needs somewhere

to go when he gets out. Is that part of step two, our total debt, paying it off, or should I just let her pay it, sell it to her? What does that, you know, how does that fit into my overall equation? Well, investment real estate typically is in baby step six with your mortgage. And that's where I would put it. So you get everything cleared up and then clear that up. But it sounds like there's a couple other variables here, to say the least.

What's the balance on this? I checked it yesterday. It was $70,128. And what is your household income? Me and my wife together, probably about last year, we made $105. Okay. So that's a lot of money to y'all still. Yes, sir. Yeah. And you bought the house, but your mother is paying the payment. Yes, sir. I bought the house in 2009, lived there for a few years, got married, moved out, was going to keep it because it's a good spot in town, a good piece of property.

And then it just became a situation where my mother needed a place to go. She moved in, took over everything. And like I said, my brother's going to need a place to go, and he's going to eventually move in there with her or by himself. So it's taken care of. It's just I don't know if I should count that on my pie chart right now or if that's just my – Well, yeah, it's a debt in your name, and so I would put it at baby step six and pay it off. You know, technically speaking, it's just an underperforming rental.

Okay. You own a house that you owe a mortgage on and the rent isn't much yes sir that's all it amounts to and it may get worse if he has trouble with his career and she's gone yes sir you know you may end up paying the bill if you're going to furnish you're going to be willing to furnish it to him. And that's what you've got to look towards and decide. So, you know, those are all things out there in the future. With all of that in mind, I'm probably going to, you know, just get it paid off when I get to baby step six. Now, what do you own your personal residence? My personal residence, do you own my total debt now or just the residence?

Your personal residence only. Personal residence between me and my wife that we live in is 174. Okay, cool, cool. Well, I mean, when we get there to Baby Step 6, you just choose which of those two you want to pay off first. Okay. Typically, I pay off my house before I pay off my rentals, just as a risk management thing.

You've got a big mortgage compared to that little mortgage, so you might switch that, but it's not a big deal. Let's see where you are when you get there. And when you get to baby step six, it means you do four, five, and six at the same time. Once you're out of debt, other than all this, your other debts are paid off, and you have your emergency fund of three to six

months of expenses in place, then you start putting 15% of your income away for retirement. You start saving for kids' college, and extra goes towards your house and or your rentals. And we've got a rental here. That's what's sitting here. So you just decide which of those you're going to plow into and what the situation is at that time.

By that time, you know, a few years down into this, you may turn around and sell that thing for some reason or another, and that might change the equation. Or your income might go way up, and you're able to just attack it and knock it out. So you've got a little bit of leeway here. There's nothing on fire. Just be very aware that this may become a problem rather than a blessing, the way you're describing it to me.

And I think you see that as a possibility. All right, Timothy is with us in Phoenix, Arizona. Hi, Timothy. Welcome to the Dave Ramsey us in Phoenix, Arizona. Hi, Timothy. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call, and God bless you for what you're doing. It's amazing the work you're accomplishing, so I thank you for taking the time to speak with me today.

Honored to do it, sir. How can I help? You know, my wife and I, we got ourselves into some debt early on. We just got out of a nasty truck loan, paying like 24% interest on that. Said goodbye to truck loans, but now we have about $60,000 in school debt, which just, I mean, man, I don't know. Anything should be illegal these days. It's school debt. But we've got about $60,000.

We just financed a home for about $250,000. We make about $55,000, and I just don't see a way out. I'm wondering what is the first step. We just attended your Financial Peace University, but to be honest, Dave, we're still spending. It's like someone going to an AA class and drinking the day after. It's just out of control. I'm wondering what you would suggest for my wife and I. Go back through the class again.

Right? You flunked. That was my first instinct. Yeah, you flunked. We flunked out. Yeah, you quit going to AA and you started drinking again. So go back. Right.

Using your metaphor here. So, yeah, you've got to get some people around you that are pounding you on this that are going to be brutally honest with you, love you enough to go, that's stupid, stop it. And you know that. We all know it. But we need people in our life who love us enough to tell us the truth. And that's a good place to find that kind of a group.

Is it a financial Peace University group? And just get back in one. I would do that. I kind of think this house sounds like it's out of control. Oh, it is out of control. The mortgage is out of control. It's high. But, you know, if we wanted a house, i think we probably rushed into it a little bit

and then you called then you called me whining because you're broke precisely yeah these two these two conversations don't go together man so you gotta decide i mean you you keep doing this stuff you're gonna keep getting you keep doing what you've been doing you're gonna keep getting what you've been getting um i'm not sure you got to sell the house but i'm pretty sure you got to sell the house unless your income is going up dramatically fifty five thousand dollar income a two hundred fifty thousand dollar house i think that equals broke but i'm not sure you need to look at it i mean your house payment we you know that from financial peace university shouldn't be more than a fourth of your take-home pay. So, you know, it's just a house. You can get you another house, but I think there's no money left in your life

after you pay your house payments, what it sounds like. And that's why you're having trouble getting the rest of the debt paid off and that, and you're having trouble just generally not spending. And, you know, that's something you're going to have to look at too. So that's what I would do. I'd jump back in the class and, you know, that's something you're going to have to look at, too. So that's what I would do. I'd jump back in the class, and probably in the next six months, you're going to come to the conclusion you're going to sell this house. That's my guess.

All right. Open phones at 888-825-5225. Bill is in Boise, Idaho. Hey, Bill, welcome to the Dave Ramsey Show. Thank you, sir. A quick question for you. My wife and I, following your principles, are completely debt-free. Woo-hoo!

We own our house outright, and it's valued at about $425,000. Good for you. She's 51, and I'm 50. Mm-hmm. We have retired with a, well, we've stopped what we were doing because we have set it up where we have a guaranteed take-home income after taxes of about $100,000 a year, and that will last for a long time. Yeah. How much is in your nest egg? Uh, we have in the bank right now, 60,000 and between two 401ks or, uh, 457 plans, we have about a hundred thousand dollars. And where's all that guaranteed income coming from?

Uh, it is a pension after working for 31 years in, uh, the, uh, public sector. Excellent. Okay, cool. So your question is what? What is next? We're willing to keep going. We can go back to work and kind of do something different, but how do we continue to build reasonable wealth at this stage in life?

How old are you? 50. Oh, okay. You're not even getting started. Okay. Well, Encore careers are often the most lucrative of careers because you do something you love and you're really good at because you don't have to work anymore. And we're not talking about woodworking in the garage for $32. We're talking about making a serious business move of some kind. And

so I would start thinking about what I want to do with this second half of my life. I mean, you've got 20 good years if you want to go dive into something. It's not you've got to work 80-hour weeks, but, yeah, you've got tremendous earning potential. Tremendous earning potential. And so I'm thinking this is a career question more than it's an investment and financial question, if I'm in your shoes. Good, good. Well done, though, sir. Well done. This is The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show

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