The Ramsey Show - App - Give Yourself a Raise by Adjusting Your Tax Withholdings (Hour 2)

Episode Date: December 13, 2018

The show about you

Music Music 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. Thanks for joining us. Merry Christmas to you, America. The phone number is 888-825-5225.

That's 888-825-5225. Elias starts off this hour in San Antonio. Merry Christmas, Elias. Thank you, sir. I thank you for your time as well. My question, I am a full-time realtor, and, you know, consistent commissions is always the key, but I got about $51,000 in stamp lines and $2,500 in credit card debt,

and that's pretty much the gist of my debt, but I'm trying to get debt free, you know. What do you think is the fastest track the best way to accomplish that well it it it's a ratio of income to debt we call it the shovel to hole ratio how big a hole you're in is your debt you told me that your income is the shovel you've got to get out of the mess right and so obviously obviously go ahead oh i'm sorry my. This past year has been my best year to date. I did $4 million, and that equated with after expenses and everything, about $60,000. How old are you? 33.

Good for you. Okay. So you made $60,000, and you owe, did you say 50 on student loans? Student loan, 51, and I have one credit card with about $4,500 on it. Okay. And so you've got $55,000 in debt. You made 60. I mean, so if you paid off $27,000 a year, you'd be done in two years.

If you pay off, what, $18,000 a year, you'd be done in three years, right? Okay. Roughly. I'm just taking $55,000 and dividing it by years is all I'm doing here. And so the best way to do that, obviously, is chop up the credit cards and not be going into any more debt. Get on a written budget. Make every dollar that you have behave so that you can throw

it at the debt. And pay off your smallest debt first and then your next smallest. I'm sure the student loan is not one single loan. It's broken up, right? It's two. One's subsidized. The other one's unsubsidized. Two single loans or two groupings

of loans? It was two and then I consolidated it into one. Okay. Well, then you've got credit cards, $4,500, and then you're just going to be beating on the student loans for that two- or three-year period of time while you knock this out. And, of course, the more you make, the faster you're going to get out, right? Yes, sir.

So if you doubled your income this year, you'd be out of debt in a year. That is the goal. There you go. Hey, man year, you'd be out of debt in a year. That is the goal. There you go. Amen. Thanks for calling in. Chris is in Los Angeles. Hi, Chris. Welcome to the Dave Ramsey Show.

Hi, Dave. Hey. I'm so excited. Okay, so I just recently got married, and my husband and I have quite a lot of debt. One of the largest ones that is concerning me right now is a federal student loan that my husband co-signed for when he was 18. And the original balance was a little bit over $100,000 now.

And just lately he got a letter from a debt collection agency wanting to settle it for like 25 000 now um we have 58 000 in debt including this 25 000 and it's going to take us probably two years to pay everything off on an income of 72 000 take home that works and i'm just worried um if it's safe for us to have joint bank accounts because there's a possibility that they might garnish or levy our bank account and just wipe us clean in the process now if you're if you have an agreed amount and you're paying them the agreed amount, why would they garnish your wages? Well, we haven't been making, or he hasn't been making payments.

I know, but you're getting ready to cut a deal, right? Well, we don't have $25,000 saved up right now. We're just barely on baby step number two. I got you. We're starting off with the lowest. I got you. And that $25,000 is the last one. How clean is your credit? It's probably in the $700s,

but his credit is shot because of this. Okay. But what if you talk to a credit union about borrowing the $25,000 and just put that on payments and be done with the student loans and then you pay the $25,000 and just put that on payments and be done with the student loans, and then you pay the $25,000 off in the next two years by paying payments? Would that be okay?

That sounds hard because the payments would really put us on a super tight budget, especially if we're trying to pay... I'm sorry, you have $58,000 in debt, of which $25,000 is settling $100,000, right? You're planning to pay that off in two years now, right? $58,000 total. Including the $25,000? Yeah. now right 58 000 total including the 25 yeah and you're planning on paying both of those that you're planning on paying off 58 000 in two years correct yes so why could you not put the 25 on a two-year or a three-year or a five-year

payment plan and pay it off in two years okay because you're going to pay it off in two years. Okay. Because you're going to pay it off anyway. Yeah. Okay. That doesn't change your budget situation. It's just participating. What we're doing here is getting them out of your life and getting rid of the threat of a lawsuit and locking in this wonderful $75,000 plus discount. Yes. That would be very cool.

So, yeah. Yes, you ought to have joint accounts. I don't think you're about to be sued. I think you're about to work your way out of this really fast. You think we'd get notification beforehand if there was a lawsuit? Yes. Yeah, you would. Okay.

And, you know, even if you didn't, if they hit your account one time, then split them, but they're not going to hit you. As long as you're messing with them and you're sending them money, big chunks of money like we're talking about, you're going to be able to work your way through this. And if you can borrow that $25 and lock this in, I surely would as fast as I possibly could. So, hey, good question. Thank you for joining us. Open phones at 888-825-5225

if you've just joined the Dave Ramsey show for the first time Merry Christmas this is a show about common sense how to build wealth and how real people have built wealth not what your broke brother-in-law's theory is real people build wealth by living on less than they make by being on a budget a written plan that's your map to the land of wealthy you do not visit a land that you're not in now without a map no one randomly just shows up in florida You get the map out, pop it into your iPhone

or whatever you're going to do, your GPS, whatever it is, but you're going to wander your way down through there until you land where you wanted to go. It's an act of intentionality. People who build wealth don't have payments

and they use their most powerful wealth building tool, which is their income. They get out of debt. People who build wealth save for emergencies and invest long term to build wealth and change their family tree, their 401k, their Roth IRA. People who build wealth are generous, uber generous. This is the Dave Ramsey show.

Did you know that if you combine the data breaches that have occurred in the past 12 months, almost every American has had their personal info compromised or hacked. Over 50% of our listeners and viewers tell us that they or someone in their family has been a victim. And 70% of those folks have had it happen more than once. See, this is unbelievable. Once thieves get your info, the risk never goes away, and they can use it whenever and however they choose. It truly has become an issue of not if, but when. That's why the only plan I've ever recommended is through Zander Insurance.

I actually sat down with them, and we put together a plan that I felt provided the best protection, but didn't waste dollars on things you could easily do yourself or were just gimmicks. The key is getting protected before you're a victim, and it's too late. Go to Zander.com or call 800-356-4282. We are all at risk, and it doesn't make sense to wait. Numbers don't lie. That's Zs.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings.

Free samples, free shipping, great company. You can put window blinds up for the holidays, do some kind of window covering. These guys are the best. Use the promo code Ramsey when you go because that's where the best deals are. Micah's in Ohio. My 100% owned LLC has a cash flow negative of $250,000 this year. Can I ask my church for a refund of my tithe since there were no first fruits this year? Well, you can if you want

to cause your pastor to laugh out loud. That's absurd. What in the world? I mean, that can't be a serious question. Really? So if you have a cash flow negative, your business is losing money. You shouldn't, there wouldn't be a tithe. Your tithe, if you give a tithe, a properly calculated tithe to your local church, that's just, this is just bull.

This guy doesn't really, nobody does this. If you get a properly calculated tithe, if you understand what Deuteronomy says, it says you tithe on your increase. What is your increase? Your increase is not your gross revenues. Your increase is your net profit if you have no net profit and you have a net loss you would not have a titheable nor a taxable income and so thereby you would not be due a refund because you would not have paid anything in. This is just nuts.

All right. Open phones at 888-825-5225. Shane is with us in Raleigh. Hi, Shane. How are you? Good. Merry Christmas, Dave. Merry Christmas to you.

How can I help? I have a question tailored towards job direction or possibly how to ask my boss for a direction. I feel like I haven't reached the edge of what I can do, but I'm kind of trying to look for my next. It's something I'm kind of learning in the Marine Corps. You know, you're always looking for that next thing and trying to emulate that. And right now I do a lot of training and teaching for heavy equipment, and one in particular is cranes.

It's kind of a hot topic now, and right now we teach it internally, and it's a federal license, kind of like a CDL license, and a lot of people are looking to have it. And I kind of want to take it, instead of being an internal thing, and take it public, where instead of it costing us money to do it, we create some type of income off of it. The company itself is about 200 people, and right now I'm the only one doing the training. And I kind of want advice on how I should approach my boss about it, if it's even something

that he would be interested in. Well, he may or may not. I don't know about that. I mean, he may say, no, the only reason we're doing this is just for our people. I have no desire to get in the teaching business. Right. But you have bandwidth, you have extra time that you could teach people from the outside, or is there room in the classroom you're already running that you could put them in there? Well, he's moved me over to this training facility, and I mean, it's big enough, you could probably stick 100 people

in there. And really, the only thing we use it for is like safety dinners, or he has a huge meeting, he brings people over there to do it. And it's a great facility. It'd be something that could be used for it. So when you do a training on crane operation internally, how many are in the class? About 10. Okay. And so there's room for another 90? Yeah. I'm lucky you want to do that, man. In a class that you're already doing right um i'm not doing it as frequently as i want to um how often do you do i mean we

once every three months okay but i mean if you saw what what what could you charge someone to attend this class um you could charge up to $2,000 or $3,000 a piece. Okay. And so if you had 50 people extra in the class and you only charged them $1,000, that would be $50,000 extra income for the company. Each time you did it, if you did that four times a year, it would be $200,000 extra income,

and it's almost all profit. Right. Yeah, it would be, besides what he would, I guess, pay me. Yeah, if he gave you a little bonus for this great idea. But basically, you're yakking in front of 10, or you're yakking in front of 60, or 80, or whatever. Right. You think you can get that many people to come in there? I believe I can get 15 to 20 in there at a time okay um yeah and if the going rate's 3 000 and you only charge two you

ought to be able to get more right yeah if you undercut like that i guess you might well i mean the price i ran was only a thousand just a minute ago right and i put but i put 50 in the room so you know i just sit down talk to him say i'm already doing this i think you can make some extra money and um you know i'll run it and help get the people in here and you can pay me some of the money but we're using your building i'm already standing up there teaching It doesn't take any more effort other than to let people know that they can come in here and give you money for this. Right, a little extra paperwork. Yeah, you've got to certify them or whatever for the feds and the whole bit. But you're, again, already doing most of that.

And as long as you don't create problems for the existing operation, which all I'm hearing is that you're not, you've got a big empty room and you're not you're just you've got a big empty room and you're filling it up a little bit more and um and again you're not you're not i wouldn't recommend teaching more until you've filled that room 100 if you put 100 in that room every time four times a year then we talk about raising the number of times you do it but we're not gonna we're to teach it more until then. But while you're already doing it, make some more money, and he shares some of that with you in the form of a bonus.

Sure. Definitely talk to him about that. Steve is in Michigan. Hey, Steve, welcome to Dave Ramsey Show. Hey, Dave, great to talk to you. You too, man. What's up? Well, my wife and I went to a financial advisor to buy a will or get a will,

and it's called the Estate Plan Navigator. Have you ever heard of it? Nope. It consists of a last will and testament, financial power of attorney, health care power of attorney, attorney assigned to file, cloud story and sharing, and letters of direction, all for the low, low price of $650. My question to you, is this something that is worth it? Is it something I need?

What do you think? Well, you need a will for sure. I mean, and you can do a will on LegalZoom for, you know, 30, 40 bucks, all the way up to you can spend tens of thousands of dollars on a detailed estate plan if you have a lot of uh a lot of a big estate that you need to it's very complicated that you need to work through so anywhere in there so what is your net worth i would say probably half a million and And what's your household income? I'm retired, which is I get pension and Social Security for about $50,000. And my wife works full-time.

And what does she make? $38,000, $39,000. And how old are you guys? I'm 63. She's 53. Okay. I mean, you can probably get a local attorney to do a will slightly cheaper than that. You know, you might save get a local attorney to do a will slightly cheaper than that. You know, you might save a couple hundred bucks or something.

But that's not an outrageous price that I just freak out and go, oh, they're ripping you off. Right. If you told me it was $2,000 or something, I might say, what? You know, but that's really not completely out of line. And, you know, a lot of attorneys will do wills from the $400 to the $600 range. And basically an estate plan, the things like you're talking about here. You know what bothers me about the conversation, though? You don't trust your guy.

Actually, my wife doesn't trust him. Oh, that's even worse. Yeah, I have a very virtuous wife, and I'm wondering if she's saying no. Because of him? I think it's because of the amount of money. The amount of money is not wrong. But she feels like he's slimy. She doesn't trust him.

That's interesting, because he's a pretty nice guy. I don't know. I mean, you're 63 years old. You need this set of documents done. Everybody needs this set of documents done. It's not an unreasonable price and you guys need to decide if you trust your guy or not because I don't

think he's steering you astray. I think that's a reasonable thing. I mean, if you want to try to save a couple hundred bucks, you can. Or if you want to do it out on the cheap, you can, which is what people, you know, if you don't have any assets. But you guys have pretty substantial assets, so I don't see anything wrong with what you're proposing. Are high health care costs getting you down? Are you confused trying to navigate your options? 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. 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 In the lobby of Ramsey Solutions, Pete is here from San Jose. Hey, Pete, how are you? Better than I deserve. How about you, Dave? Just the same, sir. Welcome, welcome. here from San Jose. Hey, Pete, how are you? Better than I deserve. How about you, Dave? Just the same, sir. Welcome, welcome. How much debt have you paid off, brother? $47,211.

Way to go. And your range of income during, how long did this take? 26 months. 26 months. And your range of income? $30,000 to $88,000. Whoa! Nice jump in two years.

What'd you do to triple your income? I got a new job. I'm actually a magician on the side. I also started dog sitting. There you go. Went crazy, huh? Yeah, exactly. I love it. Love it, love it, love it. Alright, what kind of debt was this? Forty-seven thousand. I was regular, Dave. Truck payment, credit cards,

student loans, all of the above. Just normal? Of course. Okay. What happened 26 months ago? I was in debt since college. I didn't want it anymore. I bought FPU, the home course, and I just got gazelle intense and got fire under my butt. Cool. How'd you find us?

I started, actually, I found the Total Money Makeover at the library. Hmm. Okay. All right. So you just looked up and said enough already. Yeah, pretty much. Like you say, giving money to other people instead of investing myself is a fool's errand. Love it.

How old are you? 39. Cool. What do you do for a living? I'm a property manager for homeowners associations. Good for you. I'm a bad guy. Good for you.

Very cool. Fun. Well, congratulations, sir. Thank you very much. I'm very excited. How does it feel? Amazing. Amazing. I never want to go back into debt again. This is crazy. I love it. How. Thank you very much. I'm very excited. How does it feel? Amazing. Amazing.

I never want to go back into debt again. This is crazy. I love it. How old are you? 39. Wow. So your whole adult life you've had debt then? Yeah. And like I said, I never want to go back into it again.

Way to go. It's fantastic. What do you tell people the key to getting out is? Get a support network around you. You need to have like none of the cheerleaders around you. You need to have accountability partners. Who was your biggest cheerleader? My best friend, Pete, in Washington State.

Okay. All right. So he's also doing the stuff? Yeah, of course. I'm his motivation, so he holds me accountable, and I do the same thing for him. Ah, very good. Good for you. Wow.

Yeah, I agree. Having some people in your corner that'll lift you up and hold you accountable and bust on you when you're being stupid and all that. You just got to have people love you in your corner. Of course. My parents think this is kind of crazy, but they're normal, too. Yeah. Well, and you're debt-free now. Exactly.

You may infect them. You never know. I'll try. Well, thanks for coming all the way to Nashville to do your debt-free scream. This has been fun. Very cool. We've got a copy of Chris H do your debt-free scream. This has been fun. Very cool. Well, we've got a copy of Chris Hogan's retire-inspired book for you. Fantastic.

That'll be the next chapter in your story. We're going to give you a copy of Everyday Millionaires. It comes out early January. We'll ship it to you then. Perfect. And give you the copy while you're here of Chris's other book, his first book, of course. But that's your next chapter. We want you to be an everyday millionaire, right?

Awesome. Thank you very much. I think you will be. We're going to do that theme hour next hour, and we'll be talking about the future Pete. All right. There we go. Good. Very cool.

All right. Pete from San Jose, California, $47,000 paid off in 26 months, making $30,000 to $88,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! Woo-hoo!

Wow! That's fun. That is very fun. Good job. Stephanie is in Cleveland, Ohio. Hi, Stephanie. Whoops, I hit the wrong button. Try again. Stephanie is in Cleveland, Ohio. How are you. Whoops, I hit the wrong button. Try again.

Stephanie is in Cleveland, Ohio. How are you, Stephanie? Hi, I'm doing well. Thank you so much for taking my call. Merry Christmas. Merry Christmas to you. How can I help? So my husband and I are ready to start the baby steps,

and we sat down this past weekend and went over our budget, and we gross about $90,000k i do some babysitting on the side and i just don't know where we're going wrong because we are coming up at a zero without throwing any extra money at our debt and i don't know if it's our car we need to sell how much is your car how much is your car payment uh 370 okay and How much is your car payment? $370. Okay. How much is your house payment?

Just under $1,200. Okay. And how much are you still putting money in your 401 case? He's not. I think I'm doing like 3% or something right now. Okay. Cancel that. Yeah, stop that temporarily.

Okay. And how much are you getting in tax refunds? He started a new job last year, so we got a couple, a few thousand dollars back for 2017. Right. So I know we're trying to make it so we're not, you know, paying out in taxes. Right. Don't want to pay out in taxes, but we also don't want $3,000 coming in a tax refund because that's $250 a month too much being taken out of your check.

Okay. That's all it is. A refund is they just took too much out, and then you get it back with no interest. Mm-hmm. Okay. So what you need to do is when you do your 2018 taxes early in 19, with your tax professional, you sit down and go, what should really be withheld and have that proper amount withheld you don't want to end up having to pay more in but you also don't need a big refund so if you got a hundred

dollars one way or the other you hit it perfect okay that's where you want to land with that um also are you paying a bunch of gimmick stuff at work either one of you before you get home with the money? Like cancer insurance or short-term disability or any of that? I pay into short-term disability, yeah. Okay. And child, I think, child life. Okay. All right. Yeah, you need to look at a lot of that.

You're probably getting nickel and dime to death on that stuff. Okay. Because what I'm trying to do is set your take-home pay up to be, you know, really minus only the proper amount of taxes and everything else comes home. Yes. And I suspect. We are netting like 65, I think a little over 65, which, I mean, I don't know. That seems crazy to me.

Yeah, that seems a little low. It sounds like you've got it sounds like you've got you know too much coming out for taxes you've got some gimmick stuff and you're still taking money out for the 401k and we adjust all of that it could be as much as you know five hundred a thousand dollars a month okay and that all of a sudden then starts to get this rolling so what is the balance on the car the payoff um the balance is 24 000 we were upside down on a car that we traded in so we owe 24 000 and i just kelly blue booked it and selling it privately the max was 17 000 gotcha okay and how much other debt do you have, not counting your home? My husband has about $17,000 in student loans.

We have about a little under $2,000 in credit cards. We're paying some local taxes that we owe a couple thousand dollars to, I think it's a little under $2,000 there also. And that's it. Okay. All right. And what unusual expenses are you seeing in your budget when you lay it out, something that you think other people might not see? Well, my son just started piano, so I didn't know if that was something we should cut out,

which would be really hard to do, but that's like $120-some dollars a month. I was just sitting there staring at it today trying to figure out. We're paying some of our adult children like car insurance and why cell phone bills still yeah i i guess that's something else we need to change yeah yeah okay number one they're adult children which i've always thought was an oxymoron yeah yeah uh but they're adults. They ought to be paying their own bills. And it's time.

How old are they? One's in college. She's 20. And the other one just moved out on his own. He's 18. But he's not in school. So I kind of feel like he should be paying both things. We did start having the college, pay her car insurance.

Mm-hmm. Okay. But we still pay for her cell phone. Well, I think the thing to do is just what we're doing here. We're just taking a comb and combing through the tangles. Do you feel it? Yes, absolutely. And so by the time you do all of that, you're going to find $500 to $1,000 pretty quick,

and you're probably going to end up finding more. So basically, you've got $50,000 in debt. If you can find a couple thousand dollars a month, including the payments you're already paying, not counting your house payment, but your car payment, then you would be debt-free in two years. That's what we're saying. And I think you can find that over time here.

You just keep beating on this. Keep combing the tangles out. This is the Dave Ramsey Show. Jeff's in Lansing, Michigan. Welcome to the Dave Ramsey Show, Jeff. Thanks, Dave. Merry Christmas. Merry Christmas. What's up? Well, Iansing, Michigan. Welcome to the Dave Ramsey Show, Jeff. Thanks, Dave. Merry Christmas. Merry Christmas. What's up? Well, I have a question. So I'm just starting a plan. A friend of mine is doing it, and I'm super excited for him, so I am doing it as well.

Cool. And I'm a salesperson, and I travel on the road a lot, and I get expense checks for mileage and reimbursement stuff. So if I purchase something, I get reimbursed for it. I'm just trying to figure out what to do with those checks. Like, do I roll those towards that snowball? Do I, like, what do I do with those checks based on, you know, your plan? Hey, generally what I would tell you to do is probably set up a separate checking account for your road expenses with a separate debit card and put some money in there, obviously to cover the first round.

And, um, then what happened, let's say you put 500 bucks in there. I'll just make up a number. Okay. And then you spend that 500 and you turn in your receipts and you get 500 back from the company. Right. Right. And so that account just becomes the account that is used for nothing but reimbursable expenses. And that keeps it really clean.

Now, when you get a check for mileage, is it wrapped into the expense reimbursement check? Yeah, it's all one check. So I send in the expenses with the mileage, and it comes back as one check. Okay. Well, the mileage amount is not a cost each month. It's just a cost with the value of your car going down and whatever maintenance you do on your car and that kind of thing. But it's not a, I spent $ spent 26 on food and i'm turning in that

receipt that's that's 26 that you just spent right you see the difference right so the mileage amount the mileage amount i probably would put in my regular budget just as income and because you're going to just cover the you know the repairs on your car and whatever else you're doing with that and the value loss in the car becomes part of your overall personal financial plan and that's what that's for is just to cover you know your so forth does that cover gas or is gas separate no that covers gas so whatever i spend in gas i don't get anything back for gas i just do my mileage and i get like 34 cents per.34 per mile, you know, however much I drive. I'd probably just throw it all in that separate account,

and let's just see if we can run expenses for your business, for your job, separate from your personal. And use that for gas as well then? Yeah, yeah, I'd just use that for gas because that $0.34 might probably cover the gas and then some. You'll probably end up with a little surplus but not much. Yeah, it ends up being a little bit of a surplus from what I spend versus what I get back. Yeah, so once a year if you look up and there's a couple thousand bucks extra in there, just pull that out and throw it towards your other goals. Perfect.

Yeah. I keep the expenses separate, and that way you don't get in there and have issues. Because the thing is, when you mix up your reimbursable expenses down into your personal stuff, it's very hard to track and make sure that you're only spending reimbursable things while you're on the road. Be very, very careful to only do reimbursable things. Denise is with us in Buffalo, New York. Hi, Denise. Welcome to the Dave Ramsey Show.

Hi. Thanks for having me. How are you? Better than I deserve. What's up? Well, I'm on a baby step two. I've actually made up my first payoff of a loan. And my question is, I have two loans from family and

friends i'm having a little bit of trouble hearing you can you speak directly into your phone please yes um i have two loans that are from family and friends okay taken years ago um they are less than my car loan so in my my snowball, I should pay those first. Yes. But given there is no interest on those, should I wait and pay off my car first? No. Just pay them. Get them out of your life.

Don't worry about them. You're not paying payments on them at all, are you? I'm not. It sure would be nice to give them their money back then. Yeah. It's been gone. It's been a while. to give them their money back then. Yeah. It's been a while. Yeah, it's been several years. There's two or three things that happen in the debt snowball.

One is each time you pay off a loan, the payment you used to pay there is now freed up to further attack the next one down. And that's not going to occur here because you've not been paying payments on these the other thing that happens in the debt snowball is each time you pay off a loan you have a sense of accomplishment uh the third thing that happens is you have a sense of freedom and release and believe it or not the accomplishment and the freedom and the release actually propels you as much as the math does. Yeah. Because there's a sense here. Yeah, this is kind of an icky situation. There's a little bit of regret, a little bit of guilt,

a little bit of embarrassment around all this that's all just gone when you write these checks. Right. Okay. So that makes sense. The interest isn't as important as getting those steps done. Yeah. Yeah, let's just knock them out. Now, if they're both $5,000 and you want to pay off the car before them, that's fine.

But if one of them is $2,000 and one of them is $5,000, pay off the two first. Yeah. Knock it out. Be done with it. Get it out of your life. Check that box. I am done. I love it.

I love it. Way to go, kiddo. Keep it up. Open phones at 888-825-5225. Brad is in Lansing, Michigan. Hey, Brad, welcome to the Dave Ramsey Show. Hey, Dave, thanks for having me. Thanks for taking my call.

Sure. What's up? Not much. I was just questioning the 401k options I have investment-wise in my 401k through my company. I only have 26 overall investments to choose from. And I know you like the good growth stock mutual funds. I was able to find the four types of categories that you have that you recommend. I was able to put 25% in each one. Great. Now, my question is, do they, they're not all 100% like U.S. stocks. There's like a 90% and then a 10% foreign.

Is that normal? Wait a minute. You're talking about your international fund? No. The international fund does have a little bit of percentage of U.S. stocks, at least when I'm looking at the overall. Okay, that's not the end of the world. A pure international wouldn't.

That's usually called a global fund if it has a little U.S. mixed in. But that's fine. That's not the end of the world. The point is you've got that flavor in the gumbo. Okay, right. And being that they have the 401K, they match 6% of my pay. So I've been doing that for years. I'm 35, and right now I have about $200,000 in the 401K.

Way to go. I think I'm on a pretty good pace. You're on a great pace. They match the 6%, and we get a profit sharing that looks to be about that same 6%. So essentially I'm getting like 18% over the last 13 years that I've been doing it. That'd be 12%. I'm pretty happy about that. Yeah, that's amazing.

Now, they offer a Roth 401k as well, but I believe their match will go into the traditional 401k. It has to, by law. Okay, all right. So if I decided to go, once I get our car paid off, I think if I go with another, do I need to go like a Roth IRA, or should I just stick money in that Roth 401k? No, you just stay with what you got there. I would take it to go ahead and convert your current 401K. Not the balance that's there, but future balances.

Call it Roth. It doesn't cost you anything for the future ones to be Roth. Now, again, all of your match is traditional, but the portion you put in from today forward would be Roth. The $200 you've already got there, don't touch that. Don't fool with that. And certainly the match. Now, what you can do later later on once you get out of debt and you're starting to pay off your house and that

kind of stuff is you can you can correct that and go ahead and pay the taxes and move it all into the Roth inside of there and once a year their matching portion you can flip it over in the Roth but it causes a tax thing and I don't want you to create a tax bill right now until you get out of debt. Okay. All right. All right. So you think otherwise I'm on a pretty good track then to make that millionaires better? I think you're a stud.

I think you're killing it, man. I'm proud of you. Awesome. That's good to hear. I'm glad to hear that. 33 years old, $200,000. What do you make a year? Yes, sir.

I only make $60,000. Man, you're doing really well. Congratulations. Yeah, you're doing really well. Congratulations. Yeah, you're going to be an everyday millionaire. You're going to be one. You're on track. You're going to do the stuff. Hey, very cool, son.

Very cool. I'm proud of you. This, oh, it's just fun. Thanks to James Childs, our producer, Kelly Daniels, our associate producer and phone screener. I am Dave Ramsey, your host, and we will be back. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million in debt? That's pretty impressive.

And it could be you this year. Keep listening for more inspiration.