The Ramsey Show - App - Getting Out of a $220,000 “HELL-OC” (Hour 3)

Episode Date: August 28, 2023

МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, it's The Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships jade washall ramsey personality is my co-host today open phones at 888-825-5225 our thanks to the pods moving and storage folks sponsoring the studio if you're thinking about moving you need to check these guys out it is an inexpensive way to move and you get total control if you uh everything doesn't work out right you can put your stuff in storage because

they just bring the pod drum it out front you fill it up they put it in storage it works really good so appreciate those guys hanging out with us and uh if you need some help with your move they're the people to talk to ricardo is with us ricardo is in Oklahoma City. Hey, Ricardo, welcome to the Ramsey Show. Good afternoon. Hey, what's up? Thank you for letting me be on your show. Sure. I had a question, just general question. I have a, my wife and I, well, more hers, has a student loan and we've been paying off it, since COVID put an interest freeze on it, I've saved the money and I paid it to myself and have saved it. So now that they're about to kick on, I'm wondering if I should pay that lump sum to the student loan

or to a car payment that I've been paying. Both of them are about at the same of what I owe, about $5,500. Is the student loan broken into any pieces, or it's just one loan for $5,500? It's just one loan for $5,500. How much is in the savings account? About $3,400. $100? Yes, $3,400.

Okay. What's your household income? About $80. $100? Yes, $3,400. Okay. What's your household income? About $80. Okay. Is the car, what's, the car is exactly $5,500 as well? No, it's a little bit lower. It's about $4,100. Pay the car first. And the student loan is $55.

Keep $1,000 aside as your starter emergency fund, because you want that in case anything, you know, you need a starter emergency fund, but then that would be called baby step two, but baby step one, but baby step two is paying off all of your debt in order from smallest to largest.

Not, it doesn't matter about interest rate or anything like that. So just keeping it simple and following the plan, I think is going to help you. So keep a thousand aside. You've got got 2400 to throw at the car how much other money do you have saved i'm sorry how much other money do you have saved uh in my 401k no other than 401K. Oh, not much, just like a few hundred bucks. Okay. All right.

You guys are 24? How old are you? 43. 43? Yes. And you make 80 grand. How long have you been married? 90.

No, let's see. We've been together, so seven years. Okay, all right. Tell me how you feel about this statement. You make too much money to be this broke. Yeah. Is that correct? Yes.

Yeah. I mean, you make $80,000 a a year you shouldn't have a five thousand dollar problem no okay so here's what's here's what's happening here's what's happening all the money comes in at your house all the money goes out there's no plan the fact that you save forty four hundred dollars in your world after nine years of being together, seven years of being married, that's the first step of discipline and organization you guys have ever had. Congratulations, you're on the right track. I want you to take that little seed right there, and let's grow that into an oak tree.

I want you to save $34,000 now now you make too much money to be this broke sloppy and disorganized and overspending i know i used to do it i'm not picking on you am i wrong right no you're not wrong this needs to be like dave said this needs to be an ipad moment when you've come this far you've been married seven years you've got this debt This needs to be, like Dave said, this needs to be an I've had it moment. When you've come this far, you've been married seven years, you've got this debt, and you can't come up with $5,000, or all you've got to your name is $3,400. That's a lot of money going out the drain.

Ten years from today, you'll be 52, right? Right. Okay, and so what you've got to ask ask yourself is what kind of conversation the 52 year old version of you is going to have with the 42 year old version of you are you going to be pissed at him you've been working your whole life you got nothing or are you going to go man i'm so proud of you that's the day you decided i'm gonna put that 34 that $3,400 of that $4,400 towards that car. I'm going to roll up my sleeves. My wife and I are going to sit down tonight.

We're going to start talking grown-up talk, like live on less than you make. We're not freaking Congress. We're going to get this thing under control. We're going to take an extra job. We're going to sell so much stuff the kids think they're next. We're going to clear this car. We're going to clear the student loan. We're going to put emergency fund in place.

We're going to start saving into our 401k. How much is in your 401k uh i want to say 35 thousand dollars i haven't checked it right i haven't checked it lately yeah is this your hey is this your only debt i'm curious no i have more but this is the one i'm trying to start with the... You got the car and the student loan. What else? The mortgage. Oh, okay. Where you're at is a really dangerous place because you've got... Your income feels like,

oh, yeah, I'm making enough money. It's really easy to wander into debt and feel like it's not that big of a deal. You're not a guy that's got $40,000 a debt, $80,000 a debt, so you're not feeling the weight in the same way. It's easy to just lollygag around and spend money. It's so frivolously. And if you don't stop, you're going to wake up and be 60, not have enough retirement, have a car note, have those normal

things that because it's not this big, massive weight of debt, it's caused you to not be intentional about getting ahead. You want cotton mouth. it's the taste of regret in the back of your tongue you don't want that one you don't get there that guy so that hey man i love you i'm proud of you you've turned the corner here and we want to help you go the next step if we give you our nine week class financial peace university would you and your wife go through promise to go through it if i give it to you free yes okay i can all right and you call us back if to go through it if I give it to you free? Yes. Okay. Yes, I can.

All right. And you call us back if you've got any more questions. We'll fuss at you some more because we love you, okay? We're not mad at you. We just want you to win, man. That's true. And understand the feelings that you got. You are a lot of America right now.

There's 44 million Americans with student loans. The interest starts back Friday. The payments start back one month later and people are starting to go holy crap because um you know as good a job as ricardo did let's be straight about the math okay in the last three years four thousand four hundred dollars would have been a lot less than his payments. Yeah. So he saved some towards it, which is more than most people did. Yes. But he didn't even save the payments.

That's right. No, no. Over four years. So, well, he might have on $5,500. Yeah, maybe. He might have. I might be wrong. I think that's wrong.

I think he did. I think he did. But most people spent the money, and now they've got it coming at them. Hey, Student Loans in America, how we got here and how to get you out, we're going to help you with that. It's a free live stream September the 12th. Sign up at RamseySolutions.com slash studentloans. Free.

This is The Ramsey Show. Jade Walshaw, Ramsey Personality, is my co-host today. Thank you for joining us, America. Jennifer is with us in Raleigh, North Carolina. Hi, Jennifer. Welcome to The Ramsey Show. Hi. Thank you both for taking my call. Sure. what's up um i've been listening to your show daily since the end of july beginning of august i joined jay's webinar on the 9th about the every dollar app was that helpful and yeah well she's sitting here so you can tell the truth thank you jay you're welcome i'm glad you were there um on the 16th, my husband and I had our 21st wedding anniversary, and we decided to cut up our credit card that we had been using for 21 years. Wow.

Yeah. We also decided that we want to attack our HELOC. Now, we call it a HELOC. I know some people say HELOC. But we came up attack our hellock. Now, we call it a hellock. I know some people say it a lot. But we came up with a new mantra. We're locked into hell. I got it. No, we're saying, let's get the hellock out of here.

Hey, come on now. I love it. I'm going with this. I need a T-shirt. I'm going with it. Good. So my question is um considering our circumstances how long do you think it might take us to pay off our hellock

is there any other debt besides it no okay what's your household income 231 5 and how much is your hellock it's 222 And how much is your HELOC? It's $222,000. How much is your first? First? First what? First mortgage. Oh, it's $487,000. Okay. All right.

And so you're at baby step six. What's your interest rate on your first? It is $2.875 on the mortgage, and it's at 8.75 right now on the HELOC. Yeah. Ouch. Okay. You're not going to reduce the HELOC a lot in this current environment. If you refinance them together, you would have a net loss on the interest, so we won't do that.

If you were in Baby Step 2, I would tell you to move the hell lock to baby step six you however are already in baby step six you have an emergency fund putting 15 towards your uh retirement i assume if not that's what we would tell you to do and then we say okay make 231 how much can we throw at a 222 000 hell lock yeah so we aren't quite at baby step six just because like this is really pathetic because when I listened to your show and I just needed some motivation. I've been so motivated by so many debt that's free screen people, but we don't, I'm like our emergency fund is $1,000 and we have $2,000 in checking right now. Okay, you got to get the emergency fund built up before we have this discussion. Once it's built up to three to six months of expenses,

then you need to start putting 15% into your 401k. Are you guys already putting money in the 401k? We have $660,000 in the 401k. Are you putting money in there this month out of your paycheck? Yes, it comes out off the top. Okay. What percentage of your income is going into 401ks and Roth IRAs? Ten.

Okay. And we're going to raise that up after we get the emergency fund in place. You're going to do it so fast with your income it doesn't matter. All right. So let's just fast forward two months. You have an emergency fund and you're starting to put 15% of your income away. That's our baby steps, baby step four. Then that's going to move you on to the HELOC.

And if you put $50,000 a year, $55,000 a year towards it, you will be debt-free in four years other than your first mortgage. Okay. So you don't consider then the HELOC in step two? Not unless it's less than half your annual income, and it's not. It's equal to your annual income. Did you have debt before this hell lock um uh not really we had a car actually but then we moved into this house in march of 2020 and that's when we took on this hell lock so um what a day to move i know right

yeah it was actually such a blessing such a a blessing. Yeah, I'm bad. Let me ask you, is there any part of you, this is Jade talking, and Dave can correct me if I'm wrong. There's part of me that because it's debt, secondary to my mortgage, there's part of me that would want to hit this with a stronger intensity. Then I would attack the first mortgage.

Once I knocked out the hell lock, then I would slide back into more of an intentionality spot. What do you think, Dave? Well, I mean, I'm going to be focused on it, but I'm not going to change the baby steps to do it. I'm going to put 15% of your income towards the retirement, and I'm going to make sure you have an emergency fund. And then I still think you can put $55,000 a year and be done in four years. If you want to crank it up a little bit heavier than that and pay it off a little quicker than four years, that's fine. Or if you guys get some bonuses or an inheritance or anything, you throw it at that. If you sell anything, throw it at that.

Yeah, I'd definitely crank it up. Yeah, let's just lean into it. But I'm not going to go all the way back to baby step two intensity. No, I don't think I'd be beans and rice but i definitely wouldn't lollygag it like it wouldn't be a walk in the park four years is max in my mind yeah so okay well that that's good i i mean does your advice change at all if um i have nine kids not really i mean if you the margins the margin well i mean it it may mean that you can't put 55 towards it it may take longer than four years but i'm still going to have an emergency fund in place

i'm still going to put 15 aside and i'm still going to scratch around in the budget and throw as much of it as i can towards this um the only other option is to refinance and the problem is your first mortgage is so low and it's bigger that the weighted average of the two interest rates at a current interest rate of seven or so is going to be much higher. So I would not refinance it unless you just had to to keep from losing the house or something. You're not at that stage. But the faster you get rid of this thing hanging around your neck, as you've already come to realize, the faster you're going to have prosperity and peace in the family and so you know i'm going to lean into it as hard

as i can i don't know what your schedule is with the three with the nine kids and activities and what all you've got plugged in there and what all is built into that budget um but people with large families do the stuff we talk about all the time but sometimes it just means it takes longer and you may it may take you longer than four years um if you had two kids or no kids or something you could do it in four years without a there's no question fifty thousand five thousand out of 231 a year is just doable okay i agree throw in nine kids and 15 going to retirement yeah might be hard get tight might be. You might have to take five years. But I really don't want you to drag this thing out. I'm with you, Jade, in that sense.

I want to have some urgency. And you already had that urgency before you called us. So all we're doing is agreeing with what you're already thinking in that sense. So good question. Johnny is in Cincinnati. Hey, Johnny, welcome to the Ramsey Show. Hey, guys. Thank you. I have tried

to get on the show so long ago and have resurfaced it. Thank you. This is monumental for me because I need the help. We'll try. How can we help? My wife and I... Oh, get your notebooks out. Those are going to be good. Oh, I can't wait.

So my wife, we have been married five years. I'm 43 years old. She's 46. Little late bloomers. Got a three-year-old. I bought into your system way back when, and I changed my life. I didn't know I was going to get married.

Didn't know I was going to have a kid. It happened in my 40s. Everything's awesome. But my wife, it's hard getting her on the program. So here's what's happened. I had my ducks in a row before we got married. I'm living the snowball effect. I'm almost debt-free.

I'm paying this house off. And y'all didn't talk about it before you got married. This is before we got married. You didn't talk about it, though, before you got married you didn't talk about it though before you got married well well we kind of did kind of means you didn't i mean i don't think we established all the boundaries and stuff we talk about it now she didn't understand what all what you were doing and how important it was to you you didn't talk about it much kind of means you didn't there you go man that's good that's very good that's perceptive that's that's exactly what's happened so now we're five in and she thinks you're crazy now and getting her

on the same page is a tough ballgame how much debt have you guys gone back into okay so i okay we're trying to do the old school thing yeah we're we're up against a break and i apologize so here's what I would tell you. You're trying to work on the details of the plan rather than the vision of the plan. You need to pan back the conversation. Say, honey, where do we want to be when we're 65? Where do we want to be when we're 55?

What's the best way to get there? I think the plan I've been using is the best way to get there. We can talk about that, but we have to agree on our dream in high definition before we start working on the tactics. You went straight to tactics and she thinks you lost your mind. That's how you fix this. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So,

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who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org budget. That's chministries.org slash budgets. That's chministries.org slash budgets. Jade Walshaw, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions on the Debt Free Stage. Ryan and Jenny are with us. Hey, guys, how are you? Good. How are you?

Better than I deserve. Where do y'all live? Radford, Virginia. Ah, welcome to Nashville. Good to have you. And how much debt have you paid off? $290K. All right. How long did this take?

Six years and about 10 months. Good for you. And what was your high income and your low income during that time? High income, probably about $170K. Low income, about $55 low income about 55 wow what do y'all do for a living i work with the public so you work with the public yes yeah we all do like in pr what do you mean um like investment stuff cool okay all right and what do you do i'm a program manager okay very cool good to have you guys and so 290 over six years i'm guessing you paid off your house that's

right yes very cool looking at weird people love it congratulations what's this house worth uh when we bought it probably about 205 and whatever the market is now right so well what would you think it is now probably 320 okay good for y'all way to go how old are you two i'm 31 i'm 32 yeah pay for house in freaking virginia that's right i mean that's incredible way to go thank you how's that feel awesome feels good for our kids that are here today and um we're excited to really stack some money away from them good for your parents they know you're not moving back to their basement that's right i mean it's everybody's happy right that's right way to go you guys

pretty incredible 55 to 170 nice income jump during that time i'm guessing one of the careers must have kicked off during that that doubled the income and some almost both yeah yeah okay wow good for y'all well done very well done hey man that's powerful all right tell us the story what started this journey um i actually heard your name while i was working at a bank um my first job out of college didn't know who you were never heard of you so i was like well i'll look this guy up everybody was talking about you at the training. I guess that's not a problem. Was it good or bad?

Bank training and my name comes up. I think we know what that was. God's the devil. They were talking great about you. And I was like, well, I'll look into it. I have some student loans and so does my soon-to-be wife. So we'll look into it. And I think you bought me the book for Christmas.

Yep. I read it and game was over. There it history just like that and so jenny you brought the book so you get you kind of go along with it then right oh yeah oh yeah it was your was your really your idea yeah it was my idea that's cool so you're here you're here because you paid off the house but you mentioned you had student loans too how much did you pay off it's about 80k in student loans people are doing it every day love it good for you guys so what do you tell people you use the total money makeover book and what else how else did you plug into us uh we actually went to the bank every two weeks and got certain denominations of bills and put them in envelopes and we used a lot of envelopes because those envelopes got

wore out um we still maybe went to target and walked around but we didn't buy anything for a couple years um she still had to get her fix on that um but yeah i mean it's really just be intentional with it as you always preach and if you're intentional with it you know it'll happen uh it was hard along the way because you you know you don't see a whole lot of progress every day but you know when you pay one, you really start seeing it grow. That's something. Did some of your friends make fun of you? They laughed at the envelopes for sure.

We upgraded to the wallet eventually, but we wore that thing out too. Very good. Now you're kind of in a position like living in a $300,000 house that's house it's paid for and i'm 30 years old how you like me now right that's right exactly how you like my envelopes now that's right yeah i like it so you've got this whole village of people over here next to you who's the posse yeah so we have my family here. Her family wasn't able to make it, but they're listening in. But we have my brother, my sister-in-law, my grandmother, my grandfather, my mom and dad, and then our two kids. Ah, well, they all got to be proud.

Very cool. Good for you guys. Well done, well done. All right, so somebody's listening for the first time today. They've never heard of all this Ramsey stuff. You read the Total Money Makeover book, and that was it. Game on. is listening for the first time today they've never heard of all this ramsey stuff you read the total money makeover book and that was it game on you went through just the book and you said i'm going to do this and here we are six years later you're standing on this stage paid off your house

and everything what is the key to getting out of debt in your own minds consistency just stay consistent be disciplined just continue you'll see the payoff eventually it's kind of boring isn't it it is but it's okay love that love it what about you ryan what do you think um you know just like she said you can't really see the end of the road but you can always see what the headlights show you on the road. So, you know, just stay with the journey, and eventually you'll end up where you need to go. It is a long journey, but eventually you get there. Well, you guys got there. That's great.

So how much is in your 401Ks and Roth IRAs and stuff? We probably have about a quarter million in there. Okay. And starting to stack even more and more and in some mutual funds and things so you're about halfway to millionaire already and you're only 31 that's right way to go you guys you'll be baby steps millionaires for we know it easy by 35 easy the way you're going way to go you guys i'm very proud of y'all i know your whole family is they wouldn't have come to support you otherwise unless they just want an excuse to come to nashville and party i don't

know what it was could Could have been that. But, yeah. But they're proud of you, too. Congratulations, you guys. Very well done. And you brought the kiddos. Bring them up. What are their names and ages?

So, we have Luke, and he's six months. Oh, wow. And Tegan, and she's two. Cute. Wow, beautiful. Beautiful family. Well done. Well, those kids don't even know how great of heroes their parents are. Completely changed your family tree. The math that goes from here is millions and millions it's going to be amazing

where y'all are going to be if you just stay the course and just be smart i mean just be wise which the culture is so crazy but you guys have the ability to end up with an amazing wealth that you built for these two and way to go very very proud of y'all hey we've got the live and give box for you that includes the baby steps millionaires book your next stop and the total money makeover book those are both number one best sellers showing folks how to do it you started with the total money makeover you'll be able to give that away to somebody and help them and the financial peace university membership as well if you haven't been through it go through it if you have then

give it to somebody it's the live and and Give box. Proud of you guys. Well done. Well done. Ryan and Jenny, Teagan and Luke from Virginia. $290,000 paid off in six years and ten months, making $55,000 to $170,000. 31 years old, debt-free, house and everything. They're weirdos. I love it.

Count it down. Let's hear a debt-free scream ready three two one we're debt-free wow wow that's amazing it's amazing literally textbook dave exactly exactly and the math goes i mean guys just put in a financial calculator what a two thousand dollar house payment becomes in 10 years when you pay it into mutual funds in your 401k roth and just see how much money that is it's millions of dollars they're going to have. Buku bucks. Yep.

100%. They're set up for life. And that little bitty cute baby is in great shape. I just need people to hear this and see this. $80,000 in student loan debt that they paid off. I mean, they're making between $55,000 to $170,000. So I got to believe that for most of that time they're maybe around 100 right because it's not to say they were making 170 all six

almost seven years right right paid off 80 000 student loan went on to pay off their home in the amount of time that we say between seven to ten years is usually what it takes there it's real is what i want people to, it's real. This is not just a few people get it or a few people, like every day we see these people doing what Ryan and Jenny did. They're inspiring. They're heroes. It's inspiring, man.

They're heroes. They changed their whole life. They changed their whole family tree by paying a price to win. That's right. And you know, the thing is you can just decide. They did. Yeah. You, I'm talking to you right along, you know, the thing is, you can just decide. They did. Yeah, you. I'm talking to you.

Drive along the interstate right now. You. You can just decide right now. You're no different. Yep. You. Yes, you. You decide.

Right now. This is The Ramsey Show. our scripture of the day second corinthians 4 18 so we fix our eyes not on what is seen, but what is unseen. Since what is seen is temporary, but what is unseen is eternal. Nick Walinda said, I've trained my whole life not to be distracted by distractions. The great Walinda. You got to love it. Tori is with us. Tori is in Providence rhode island hi tori what's up hi thank you for taking my call sure um dave you mentioned middle class stupid things earlier and well my husband and i bought too much house i'll give you a quick story so you always

say to only take out a 15 year fixed mortgage where the payment is no more than 25% of your take home pay. We got foolish and we bought a house for $425,000. Our total monthly payment is about 25% of our $10,000 take home pay, but we're on a 30 year fixed. We used the mortgage payoff calculator on the Ramsey Solutions website, and it says if we put $1,000 extra each month, we could knock this out in 15 years. But then, of course, we're putting more than 35% of our take-home pay toward the house. So my question is, what would you do to tackle this if you woke up in my shoes? What is the curve prediction on your household income?

I mean, what are your careers, and how fast do you see your incomes coming up? We're 39 years old. I feel like my husband is probably, he's already kind of at the top of his field in library services, around $105,000. I'm at $67,000, and I don't know how to answer that question. I almost switched to someone who's on today. What do you do? You know, I work in higher education administration, so just speaking the street of work. Okay.

All right. So the chances of you all raising your income in the next three or four years to make this a 25% is fairly low. I think so, but, I mean, maybe I'm being pessimistic. Okay. What else do you own? Really nothing. I mean, we are debt free. We have the emergency fund. And then aside from emergency fund and retirement, we have about $60,000 in a sinking fund. You're marked for just home repairs. Actually bought a relatively old house. And then we have $105,000 in taxable brokerage account. What do you owe in the house?

Let's see. We put 15% down, so we owe $360,000. And you have $160,000. Correct. What's your interest rate on your mortgage? 5.5. Okay. I think if you pay your regular payment and put $160,000 of your liquid cash towards your mortgage, you'll be done in 15 years.

Yep. Okay. I think you could run that math out. Yeah absolutely and we budget a zero-based budget so we know we can for sure throw a thousand extra. Yeah give me the numbers again what's your balance on the mortgage? Yeah 360 balance on the mortgage. 369 and you got you have 60 in a sinking fund, and what was the other taxable account? $105K. $105K, so $165K. Okay, so let's just say $300K at your current payment.

No, I'm sorry. Excuse me. $200K at your current payment. That'll pay off in less than 15 years. Okay, yep, yep. Well, you still have – No, but the payment is still 35% of your take-home pay. Or still, yeah.

No, it's not because you're on a 30. We turned your 30 into a 15 by reducing the principal. Mm-hmm. Mm-hmm. Mm-hmm. If you want to keep the house, put all this money on the balance. Okay. So just drain the whole thing.

I mean, you need to keep an emergency fund of three to six months of expenses. But any repairs or upgrades you're going to do, you're going to do with cash flow while you pay this house payment. Okay. Because I think we just turned your 30 into a 15 by reducing the balance. I'm doing this in my head, so I might not be right, but I'm pretty close. I think you're about right, too. Okay. Okay.

Yeah, so that's what bails you out here. Now, of course, the other thing you can do is not keep the house. The thing is, a lot of things you do in finances, you just undo them if they're stupid. The house is the most expensive thing to undo. Emotionally, because it's like having a root canal to move you know you got you know that you're uprooting everybody you got to you know the time it takes to reset all your addresses on every oh my gosh and it's expensive to move it's expensive to move i mean this is a so if you like the house enough to emotionally part with $165,000 and throw that at the balance, that turns you into a good position.

So if you had put that much down, you would have been able to take out a 15-year. Yep, you're right. So that's the only, it wasn't the house that was wrong, it was the down payment that was wrong. Okay, okay. Assuming you like the house, and I'm guessing you love the house because you were stretching into it. Yeah. That's a really good way that you put that. The down payment was wrong.

They threw their money into the wrong thing. Yeah, they held back to do the – they got a bunch of renovations, stars in their eyes on the house. So they're going to be living in a house they don't like as much as they would have had they used that sinking fund. That's right. That's right. But that sinking fund is what should have been on the down payment all along and the 105 and non-taxable there's no question yeah so yeah the house wasn't the wrong purchase i don't know that i'm trying to think i don't know i've ever taken that call

no that was a very interesting call that you can reduce the house uh amortization and again i'm doing that in my head i wish i had my wish i had my financial calculator in front of me see if that actually worked out but that'd be very it's fair i bet you 200 000 on that it was five percent 200 000 um we well the payment we know what the payment would be we get back into it at 30 that'd be interesting to do i wish i had time to do it oh well in the old in the old days when i first started this radio show we would sit and do crap like that live on the air with the calculator and it was so boring so we'll move on thank you dave on behalf of all of us jennifer is in albany new york hey jennifer what's up hi i was calling to see uh my husband and i just recently started your baby steps in July, and we've been able to pay off about $8,000 in debt.

Way to go. Yeah, it's been good. We're doing well, but I want to sell my car. What do you owe on it? I owe $30,000. What's your household income? $160,000 to $170,000. What's your household income? $160,000 to $170,000. What's the other car worth? I'm not

sure what it's worth. Roughly. We're down to the last eight payments. Roughly, what's it worth? Is it a $50,000 car or a $20,000 car? Oh, it's a Ford F-150 2018. So maybe the book on it is somewhere between $15,000 and $20,000.

Yeah, okay. So you've got $50,000 worth of cars, and you make $160,000. So the first thing is you don't want more than half your annual income in cars. You don't violate that one. The second thing is can you pay off this car and all other consumer debt if you guys keep on this new excitement that you've got in less than two years? Yes. If you like the car i would keep it okay all right because it's not out of control do and add it to the snowball yeah i'd put it put it on the debt snowball maybe the bottom of the debt snowball if you don't want to keep it it's okay to sell it but our rule of thumb is if it's

it's a boat anchor in the math and it's going to take you longer than two years or the total of your cars is like right 80 percent of your household income and you got too much tied up and things going down in value then you would need to sell it but you don't violate either one of those math guidelines so then it just comes down to a choice if you the two of you want to sell it nothing wrong with selling it but is it necessary for you to succeed financially for you to sell this car no no it just depends on how fast you want to go yeah you want to go faster then and which is kind of she's got the new excitement yes i'll tell you what why do christmas after christmas after after the first of the year y'all

talk about it again let the let the newness wear off of the excitement of the year, y'all talk about it again. Let the newness wear off. Of the excitement of the attack zone. Because it's going to start to, yeah, the gazelle gets tired when he's intense. He's running fast. That's it. That puts us out of the Ramsey Show and the books. 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, what's up, guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to ramseysolutions.com and click the get started button. We'll help you figure out the best next step for you based on your specific situation. That's ramseysolutions.com and click get started.