The Ramsey Show - App - Having a Strong Support System Will Help You Win (Hour 2)

Episode Date: November 14, 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. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Ashley starts off this hour in Indianapolis.

Hi, Ashley. Hi, how are you? Better than I deserve. How are you? I'm doing okay. A little stressed out. Are you there? Yes, ma'am.

Go ahead. Okay, sorry. So my husband and I, we've been married every 10 years next year, and we kind of started off in debt, and it's just kind of gotten out of hand to the point that we actually went and spoke with an attorney about four or five months ago to see about filing bankruptcy. And so since then, that was our intention. He advised us to stop making payments. Well, my husband, I actually read your Total Money Makeover book about a year ago, and my husband finally started listening to your show.

And we decided, you know, maybe we shouldn't file bankruptcy. Maybe we should just try and start, you know, knocking this out on our own. But all of our payments are so far behind now. We're kind of at a point where we don't know what to do and kind of how to proceed from here. And we've also got a car that we have on lease, and we pay more on it than we do our mortgage. It's $620 a month. And so we've been contemplating just telling them to come get it and just using that money

to pay off this debt. So that's kind of where we're at. What do you guys make a year? About between a $120,000 and $130,000. Okay. The beginning of the year, he had about two months where he had to take a leave of absence from work. And how much debt do you have? Total of car, student loans, credit cards, about $147,000.

Okay. And how much of that is student loans? $50,000. Okay. And how much of that is car? $22,000 to $23,000. And the other car you also have on a lease in addition to that, right? Right.

Okay. So you have two car that, right? Right. Okay. So you have two car payments, right? Right. Okay. And so that's 77 of the 147. What's the rest of its credit card debt? $20,000 of it is medical debt. Okay.

And then credit cards? Correct. And a couple of smaller, like, unsecured loans. Yeah, but you've got credit cards of like $50,000, right? Right, yeah. Okay. And how long have you guys been married? It'll be 10 years next July. Okay. Well, bankruptcy is an absolute last resort.

It's in the same category as divorce. Sometimes good people go through it, but we never suggest it for anybody that we love. We want them to avoid it if at all possible, right? Right. Okay, and so that's what I'm going to suggest for you guys. You make a lot of money, you're disorganized, and you've been spending like you're in Congress. Right. Bankruptcy's not going to fix any of that.

You're going to have to get organized and stop spending. Have you cut up your credit cards? We have, yes. Every one of them? Every one of them. When? Oh, I don't know, about six or seven months ago. Okay, that's good.

And you've stopped paying on those? We have. The majority of those have already been sent to collections. Right. So we have a ton of stuff in collections. Excellent. All right. Well, what I would want to do if I filed bankruptcy, and I did do that 30 years ago,

but what I would want to do is know that i'd done everything possible to avoid it just like if you were going to go through a divorce you'd want to say i did everything possible to not have that happen and because it's not something to enter into lightly and so if i were in by the way student loans are not bankruptable so you're still going to have that when you come out if you file bankruptcy oh and by the way you student loans are not bankruptable, so you're still going to have that when you come out if you file bankruptcy. Oh, and by the way, you don't get to keep these cars in bankruptcy unless you pay the payment. Right. Are you current with both cars?

We are not, actually. We are a little bit behind. Okay. All right. The first thing I want you guys to do is sit down tonight and do the every dollar budget. We actually just had him download that like three or four nights ago. but now you got to do it right okay and here's what you take care of first food then is your house current um we are set up on a payment plan this month we'll get us completely current on that and how much is your house payment um normally it's 613 okay and so you're getting

ready to be current on that yeah you did a uh you did a rework on your mortgage good very right okay and um so your house and food and lights and water and car payments all get current this month. Okay. If nothing else gets paid. Okay. Food, lights and water, house and transportation. Food, shelter, clothing, transportation. You've got clothing, so you're okay there. Okay? Right.

And now the rest of this is a monopoly game that we're behind in. Mm-hmm. But emotionally, when your car is on the line, your lights and water and your food and your shelter is on the line, it rips your guts out at a different level. It terrifies you at a different level. Absolutely. Okay. But if you've got those base things, I'm going to have a place to live, I've got food and water, I've got heat, and I've got a transportation. Okay.

That's our first goal. Okay. Then we can begin to fight through some of these other things. Then we can start to say, all right, what are we going to do to get out of debt? Well, if I woke up in your shoes a long time before I filed bankruptcy, I would sell both of these cars. Okay. Well, my husband actually looked into selling the one, and we had at least through.

Yeah, you're upside down. You're upside down. Right. You have to cover the difference. Right. And I don't know that we would have a way to do that because our credit is absolutely shot. Right. Okay.

So that's another reason we thought about just. So we need to find it. Well, I wouldn't. If you give that back to them, you act like that's something you just do every day. That's a repossession. Right. They're going to sell the car on a repo lot for half of what you can sell it for, and they're going to sue you for the difference.

You may be forcing yourself into bankruptcy just tossing those people the keys. So let's avoid that if we at all possibly can. So the car that you owe $22 on, have you looked up what it's worth? It's worth $30, and the bank wants $38. I thought you owed $22 22 that's the lease you're talking about the lease right they want 38 and it's worth 30 so you're eight thousand dollars off okay but you make 130 right so i'm going to come up with the eight thousand dollars if i have to save it in my plan as soon as after i get all these other things done before I start worrying about paying off credit cards so that I can sell this car instead of them selling it for $15,000

and coming after you for $23,000 when you could have only been in the whole $8,000. Okay. Because that's what's going to happen if you toss them the keys. Right. I want to avoid that. Okay. And then the second car, the $22,000 debt, what's that car worth? Oh, that is the Traverse.

I'm sorry. That's the same car. I'm sorry. I thought you said you owed $22,000 on it, on your car. For the lease. The lease is the $22,000. We only have the one car now. The other one we turned in on lease.

Like the lease was up, we turned it in. Oh, so you don't have 22 on a car. You have 38 on a car. Well, the remaining balance of the lease is the 22 on the car. But the bank said in order for us to... Yeah, that's not what you owe, though. That's just the remaining payments. Okay.

So you're more than $147,000 in debt. Okay, so we get out of the car. That's the next step. Hold on. I'm going to talk to you after this break. 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,

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And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. All right, we're talking with Ashley, behind on everything in Indianapolis. She owes $150-some-odd-thousand on debt, including $38,000 on a lease car, $50,000 on a student loan, $50,000-plus on credit cards, and so on. Behind on everything, we're talking about how to get out of this. And so we said get you on a budget. Let's get you current on food, shelter, clothing, transportation, and utilities.

First goal then is to work to get the $8,000 and get the car sold. Do you only own one car? Right. You're a one-car family. One-car family. Well, my husband is actually currently driving his mom's car until we can save up to pay cash for him a vehicle. And then get out of this one. Okay.

Right. So you understand why I'm telling you not to turn it into the dealer? Yes, I understand that. Okay, good, good. All right. And then once we've gotten rid of the car payment, then we'll work to start working through these other debts. At that point, I'm going to let the student loans sit there on hardship deferral. They're the least active of all your collectors.

They may bug you, but they won't do anything for years in terms of actually getting money from you. The medical collections and the credit card collections are the ones we'll start working on next, okay? And then what you do is, because you're going to be in default on everything at this point, then you're going to just list your debts, smallest to largest, and take your smallest debt and call them and settle with them

and make them an offer. But you have to have the cash to be able to do that. So we've gotten the car out of the way. We've got an extra $620 a month. You're driving a hoopty. In the meantime, while we get this mess cleaned up, and then you can walk through and start making these credit cards offers. So if you have one that you owe $2,000 and you're seven months behind

and you offer them $1,000, they'll take it. Okay. You'll have to argue with them, but they'll take it. Does that damage your credit? Yes. A lot less than bankruptcy does. Okay. Okay.

Bankruptcy is dropping a hydrogen bomb on your credit. This is dinging it up. Okay. So you're settling every debt in writing one at a time this is going to be a hassle this is going to take this whole process i'm outlining is going to take you two years okay but when you do that you're going to be a hundred percent debt free you're going to be accept your house you're going to be clear of all this hassle and stress, and you won't have a bankruptcy on you. You can do it, and I'll show you how.

I'll walk with you, okay? Because I know you guys are scared. You've got to be. You've got to be. And you probably are fighting because most marriages, when they get in this kind of stuff, I mean, Sharon and I about killed each other, Ashley. Yeah. Well, actually, to be honest with you, since once it clicked with my husband,

we were doing more fighting before, but now that he's like, oh, crap, like we've got to do something, I feel like we both just kind of got on the same page and we're like, okay, let's figure this out. Good. Okay, here's what I want you to do. I want you to go to Financial Peace University, which is the nine-week class, a one-year membership, and it sets you up with every dollar plus as well. I'm going to

pay for it because i've been right where you are i know what it feels like to be scared and how old are you two we are 28 that's how old i was when i filed bankruptcy you don't have to you don't have to okay you can make it and i'll walk with you and if while you're going through financial peace university if you're stuck and you don't know what to do, there's plenty of our coaches that we have trained in the Indianapolis area. You can jump online and get you a coach, and they'll walk with you and help you fight through this. So here's our order of attack again, okay? First thing is get current on what we call the four walls, food, shelter, clothing, transportation, and utilities. And that includes your car.

Okay. Get current with everybody there. Let the rest of it sit. Call the student loans. Tell them hardship deferral. The rest of them, don't even take the call because you're not giving them any money this month. You don't have any money to give them. Okay?

Right. The second thing is we're going to save up and get out of this car. Got it? Okay. The third thing is we're going to start working these debts off smallest to largest. And here's the weird thing. When you make that list of debts, of medical debts and credit card debts and personal debts and stuff, and you make that list, it's about $75,000 worth.

And you make that list, you're going to be amazed at $20,000 will clear up a ton of them because a bunch of them are just little mosquitoes buzzing around your head. You've only got a handful of really big ones. Right. And you get rid of all these $79 and $1,279 stuff that's flying around out there. $20,000 is going to clear up so much of this. And so here's what I just said. You make $130,000. Right. $30,000 gets rid of this car and cleans up so much of your stress,

your mind is going to be blown. Only $30,000. And you can do that making $130,000. You can do it really fast because you're not going to be doing anything else. You're not going on vacation. You're taking as many extra hours and extra jobs as you can, and you don't need to see the inside of a restaurant unless you're working there. You're not going on vacation. You're taking as many extra hours and extra jobs as you can, and you don't need to see the inside of a restaurant unless you're working there. You're broke. Absolutely. Okay. Let's get on a scorched earth plan where your broke friends think you've

joined a cult. All right. Sounds good. All right. I'll walk with you, kiddo. You call me back if you're scared and don't know what to do, okay? Absolutely. Thank you so much. I appreciate it. All right, darling. You hold on, and Kelly will pick up, and we'll get you signed up for Financial Peace University. And then if you need one of the coaches or something, somebody will help you with this. You know, that's what our Financial Peace University coordinators do. They're not the coaches, but they coordinate these classes, and people like Ashley are in there, and people that are wealthy are in there. It's amazing.

When you go to a Financial Peace University class and you go through the nine lessons and then you've got the one-year membership with all of the lessons online and the legacy journey online and the smart money, smart kids online, and you've got audio and video for a whole year. It's a one-year membership. I mean, it gives you everything. It's an incredible bargain. It's the best price on all of our content that we've ever had.

And obviously, having it in a digital format allows us to do that. And then you get to go to the class at your local church. So if you want to know about coordinating the class in your area, becoming a coordinator, we need a ton of coordinators right now. There's a lot of people out there that are doing very well and they want to do better, and there's a lot of people like Ashley that are right on the bubble, and they need somebody in their corner, and that's you and that's me working together. If you want to coordinate a class, you get started by texting the word LEADER to 33789.

That's LEADER to 33789. Colin is in Lexington. Hi, Colin. How are you? Hey, Dave. Thanks for taking my call. Sure. What's up?

Hey, we are currently in Baby Step 2. I had a total of about $143,000 of debt. About $30,000 of that was consumer debt, and we've just about finished paying that off. And we've got about $105,000 of student loans left. We just received a lump sum of money from selling our house. And I know in Baby Step 2 it talks about attacking the little debts first, but I was wondering about tackling the big debts since we got this pile of cash and then hitting those little debts after we have spent all that.

Yeah, what is the equity from the home? How much is your check? We got about $85,000 from that. What is the equity from the home? How much is your check? We've got about $85,000 from that. Okay. So it doesn't clear the big debt. How many different student loans are there? There's quite a few. I think there's about 14 total.

Okay. And so what would be wrong with working at smallest to largest? Because you can't pay enough either. You're not going to clear it anyway. Right. You're going to end up with the same amount of debt either way. Okay, I got you. Yeah, I just didn't know if it was like, you know, that would kind of,

once we get this lump sum out of the way, then we hit those low ones. Well, it's not a lump sum. It's 14. Right. And so when you list your debt smallest to largest, some of those 14 will probably come, a lot of them are going to come up. Because 85, that leaves us 50 down into the 105 at a minimum, and that's assuming all student loans are bigger than the consumer.

You said there's 30 left in consumer, or you've already paid it off? We pay off all but about 13,000. That's what's left on my car. Okay, so $13,000 and $105,000, right? Don't you have a student loan that's smaller than $13,000? I do, yes. Now, so you've not been working the debt snowball properly anyway. So you should list your debts smallest to largest regardless of the category. We don't do it by category. We do it by loans, okay, by actual balance, and it's not by category. Student loans are a category. We don't do it by category. We do it by loans, okay, by actual balance, and it's not by category. Student loans are a category. They're not a balance. So list your debts smallest to largest and pay them off in that order. That's what I

would do. Thanks for the call. In the lobby of Ramsey Solutions, Corey is with us from Chicago. Hey, Corey, how are you? What's up, Dave? How are you doing? Better than I deserve. Welcome to Nashville. Thank you for having me. And you're here to do a debt-free scream. How much did you pay off?

$180,000. Woo! Love it! And how long did this take? Three years and six months. Way to go, man. Good job. And what was your range of income during that three years and six months? Anywhere from $95,000 to $160,000.

Wow. What do you do for a living? Physician assistant. Okay, cool. So why the big range? Overnights. Oh, yeah. Okay.

Take on all the OT you can get, and the overnights pay double. Exactly. Yeah. Wow. Good for you. Well, that'll knock it out. $180,000 was med school debt? Yeah, basically three and a half years of undergrad or grad school and undergrad.

Is that all there was? About 5,000 in credit cards. Okay. So what made you decide to do this so quickly and believe that you could? You know, someone close to me was doing the debt-free thing, and I came out of school. I was like, I'll do 20 20 years or whatnot pay it back slowly but you know she was on board with it you know she um recommended that I uh you know take a look at your book and basically you know listen to your podcast I read that totally money makeover and after I read it I just was all in and uh just game on game on just like that you're single single okay so you didn't have to talk anybody into doing this. Exactly. But you didn't have anybody harping on you if you didn't do it.

Right. Yeah. So you don't have the accountability, but you also don't have to drag anybody. So very good. Cool. So what do you tell people the key to getting out of debt is? This is remarkable. Very good job.

I think the biggest thing is, I mean, well, obviously you've got to have a budget, but to have a strong support system. I mean, I was super fortunate in the fact that I had people in my corner that were respecting what I was doing. You know, they were proud of what I was doing. Like who? My parents, my friends, my co-workers. So you didn't have a lot of people telling you you're crazy. You had more cheerleaders. Yeah, it was amazing. And I'm so grateful for that. And so, you know, it was awesome. But I think the other thing is too, just being patient and just really, you know, trusting the process and believing in yourself that you can make it happen. And then finally, I mean, you just got to sacrifice. I mean, right now I drive a 2004 Suzuki Verona. I live in an apartment complex in Chicago that hasn't been renovated since, like, the 80s.

But, yeah. Okay. And so I'm guessing the 160 was last year, and you just turned the heat up. You could see the finish line. You turned the heat up, sprinted for the finish line? Yeah. I mean, some months I do 11 or 12 overnights, and I just kept doing it and doing it. And it was tough.

It's exhausting. I mean, you're not sleeping, you know, and it's a tough gig. Yeah, very, a tough gig. Yeah. Very, very tough. Okay. So that last year, how much of the 180 did you pay? I would say probably 75 to 80.

Yeah. Well, approaching half. Yeah. Yeah. Not quite, but that's what I was going to guess. I was going to guess you turned it up. So you kind of got started and had some success and then you turned up the heat a little and had some more success. And by the time you get to year three, you just turn it up wide open, blowtorch.

Exactly, because I had a thing on my wall of how much I was debt and how much I was paying off, and that just kept on going lower and lower every time I was. And that'll make you work like a crazy person. It will. I mean, when you measure for results, it'll make you go crazy. I just about killed myself snow skiing because we put an app on my phone how fast you're skiing that run. And if I didn't know how fast I was skiing, I was just skiing fast and I was having fun. But when you're trying to beat the other run, you kill yourself. Yeah.

I put myself in the hospital, man. It's unbelievable. I was trying to ski my age. So I'm making sure I was going 60 miles an hour at least, you know, and it's just nuts. And but same thing here. Once you have something to measure against, you're like, you'll go all in. It turns up the heat. Definitely.

Very, very, very cool. Very cool. So how's it feel? Amazing. I mean, I'm speechless, really. I love it. Yeah, it's great. How many of your peers around you that are PAs or docs or nurses have done the same thing,

and how many are just going to be in debt for 20 years? Unfortunately, not many went down the path I went down. Yeah. They can. They can still decide. But, yeah, you came straight out of school, turned it on, and then turned it up, and then turned it up, and then turned it up and blew through it. Yep.

Yeah. Very, very well done. Well, I'm proud of you, man. Thank you. Appreciate it. Congratulations. Thanks for making a trip to Nashville to do your debt-free scream. Thank you for. Yeah. Very, very well done. Well, I'm proud of you, man. Thank you. Appreciate it. Congratulations. Thanks for making a trip to Nashville to do your debt-free scream. Thank you for having me.

Very cool. We have a debt-free doc in Chicago, so if anybody needs one, we know where to go. Very good stuff. Or PA, anyway. But yeah, same thing. Good. Very good. Very good.

We've got a copy of Chris Hogan's book for you, Retire Inspired. It's the next chapter in your story, for sure. Not only debt-free, but now millionaire on the way, plus multimillionaire in your future as well. So you're set up, dude. You're in a position to give like you're going to be in a position to do all kinds of stuff you never dreamed. Well, you did dream about it. It's why you went to med school. It's why you did all this work, all this extra study, and you hoped you would get there.

So well done. Very well done. Corey from Chicago, $180,000 paid off in three years and six months, making $95,000 to $160,000. Count it down. Let's hear a debt-free scream. I'm debt-free. Yeah!

Well done! Yeah! There we go. I love it. I love it, I love it, I love it. Very, very well done. Open phones this hour at 888-825-5225. Jared is in Birmingham. Hi, Jared.

How are you? Hey, Dave. Good to talk to you. You too. What's up? Hey, so I've been with my employer for about eight years now, and the whole time been contributing to a regular 401k. But I was happy last week to find out that they're offering a Roth 401k now.

Great. So my question mainly is, should I fund separately a Roth, or should I move everything I've got now into a Roth, or how should I approach that, Because I definitely want to fund one. Yeah, I would start from this point forward making your 401k a Roth. That doesn't cost you a dime. Okay? Okay. The matching portion, do they match you?

Yes, they match up to 6%. Okay, the matching portion cannot be Roth by definition, by law. And so it'll be regular. You'll have your old that's regular, traditional, and then you'll have your new that's a Roth. Anything, whether it's the matching or the old, that you convert to Roth, you're going to be taxed on but not penalized on. I would not do that until you are at baby step six or seven.

Okay. Are you working on getting out of debt and that kind of stuff yes sir i'm on uh steps four five and six now um i've been uh going above my match nine percent into a regular uh well a rock uh ra and so i guess you can continue to do that or you can or you can just do your Roth 401K. But either one, I would keep you at 15% total between the two, 15% of your income. That's your baby step four. Baby step five is kids' college. Six is pay off the house early.

And then how much is in your regular current traditional 401K? It's close to $100,000 for this latest sell-off now it's closer to 90 okay and so um it would cost you roughly 25 grand in taxes to convert that to roth and i would not do that um unless you've just got an extra 25 000 laying around in cash and right now you've probably been doing kids college and house early uh house debt reduction uh paying off the house early and probably don't have that money how much do what's the balance on your home uh right now it's um about 131 my goal is to have it under 130 for the end of the year okay let's not convert anything to Roth right now, then, except your new contributions going forward. So I

would not take your old eight years and roll it to Roth, because I don't want to pay taxes on it today, and I wouldn't even take the match and roll it to Roth, because you have to pay taxes on it today. Let's get the house paid off. When the house gets paid off, then reach over and with cash, be ready to pay the taxes that are created and roll it all to Roth.

Are you in your 30s? Yes, sir. I'll turn 30 in September. Oh, man, you are killing it. Very well done, Jared. Proud of you. Good job. Very good job.

Love it. Hey, man, thanks for calling in. Open phones at 888-825-5225. Michael's on Facebook. Dave, how much term life insurance should I buy and for how long? We recommend 15-20 year level term because that's enough time to get the mortgage paid off, the kids grown and gone, and build some wealth. And we recommend 10-12 times your income as the amount. And so if you make $50,000 a year on you, you buy uh you know five hundred six hundred thousand

same thing on your wife and in 15 to 20 year level term and check zander insurance for the best rates anywhere zander z-a-n-d-e-r insurance.com this is the dave ramsey show M.C. Show. Elizabeth is in Little Rock. Hi, Elizabeth. Welcome to the Dave Ramsey Show. Hi, thanks for taking my call. Sure, what's up? My husband and I are planning to build a house next June. The cost of the house will be around $225,000. By that time,

we're hoping to have about $110,000 saved. My question is whether we should use that to cash flow the first part of the build, or if we should take out the loan and then just throw the cash at the mortgage after we're done building. Doesn't matter. Doesn't matter. You're going to do a construction loan with a permanent takeout loan, meaning a permanent loan, a regular mortgage to take out the construction loan. And so at the end of the build, you'll still have $115,000 owed on the construction loan, regardless of which way you go. Okay.

And so that will be converted to a mortgage. Am I understanding that right? Yes, sir. Okay. And that includes the cost converted to a mortgage. Am I understanding that right? Yes, sir. Okay. And that includes the cost of the land and everything, right? Mm-hmm. It does. Okay.

Very cool. Very cool. Good job. So what's your household income? Last year we grossed about $100,000. Okay. So how quick are you going to pay off $115,000 on your house? Well, that depends on if I keep working or not.

We're hoping to have some kids in there somewhere, so my income will probably decrease. Okay. All right. Cool. Yeah, I'm thinking you can knock that out pretty quick, though. Yeah, if I were to keep working, we could probably do it in under $5,000. Yeah. Yeah, I think you can.

How much of the $100,000 do you make? I probably pulled in $40,000 to $50,000 last year.. How much of the $100 do you make? I probably pulled in $40 to $50 last year. My income kind of varies. I have several different jobs. Okay. All right, cool. Well, the good news is you've done a great job to date. I mean, where you are right now, you're in really, really good shape.

And so it's not going to take you 15 years to clear up your mortgage. You know, you're going to clear it up really, really fast. I don't know if it's five or seven or three or what it ends up being, but, I mean, you might do it in three if you're both working. Because you've been saving at that rate already, haven't you? Yes, we've been saving like crazy. And if you just put that same lien into your mortgage that same way, how old are you? I'm 27. he's 25 yeah i mean you're stinking house paid for before you're 35

well we wanted to do cash all the way but i don't think we're going to make it that far so yeah i mean you're you're very i mean you've just done such a really good job i'm just all i'm saying is is don't um don't revert back and start being normal once you get in there. Go ahead and reach over and smack that thing and knock it out. It's within reach. It's right there. It's right there. Matt is with us in Baton Rouge. Hi, Matt.

How are you? Better than I deserve. Dave, what about yourself? Better than I deserve. What's up? How can I help? Hey, so I am planning on proposing, I'm 23 years old, planning on proposing in the next six to eight months. And so my question is, should I

stop putting away, stop putting extra on top of my note, on my truck note, and an extra $200 a month is what I'm putting towards my truck note. Should I stop putting that towards my truck note and put that aside just to buy a ring cash in the next six to eight months? Or should I keep on adding that $200 extra a month towards my note and then finance the ring whenever I get to the May, June, July time. So your goal is to be out of debt and to get married, right?

Yes. Okay. If your goal is to be out of debt, the first step to being out of debt is never borrow again. Right. And so that means that you would slow your debt reduction on your truck enough to save to buy the ring. And so what do you make a month or a year? Right now, each check is $1,373, so it's about $2,800 a month take home. Okay, all right.

That's net. And what are you thinking of spending on the ring? $2,000 to $3,000. Okay, good. Yeah, $3,000 is your max budget. One month's income is enough on a ring. Okay. There's no correlation between the size of the diamond and the success of the marriage.

Right. Matter of fact, there might be an inverse correlation. At some point, there could be so um the uh but you know that's neither here nor there but the the thing is and then the last the second thing is um uh you have um dad mom somebody in your life that buys diamonds occasionally no okay um diamonds are like furniture they're some of the largest markup items on the planet and so um learn a little bit about it as you're getting ready to buy it learn a little not to become a diamond expert where you have to grade them or something like that i'm not trying to get you to be an appraiser but learn just a little bit about it. And, um, then you can shop, uh, with something like a diamond broker, maybe even a pawn

shop and have, have, you know, take it, have it appraised that kind of a thing, but you're looking for a deal. You really are, uh, instead of walking into the mall jewelry store, which is the highest markup item on the planet. Now, there are some hometown jewelry stores that do a good job that might be an exception. But, you know, your classic chains and that kind of stuff, man, you know, you just, for the money you're spending, you could have got twice as much. If you learn a little bit about it. Slow the payment on the note. Yes, in order to save up your two grand.

Put it aside, every check. Yeah, you got 10 months of 200 bucks is your $2,000, right? Right. Yeah. And anything else you can squeeze out now. I mean, the faster you save that up, the faster you get back to paying off the truck. What do you owe on your truck? About $8,500. Okay, cool. Well, it'd be nice to knock a bunch of that out, too,, the faster you save that up, the faster you get back to paying off the truck. What do you owe on your truck? About $8,500.

Okay, cool. Well, it'd be nice to knock a bunch of that out, too, in the process. But I'd like for you to crank this up even higher and go ahead and knock that out even more. But, yeah, before I would never borrow again, which means the only way to buy a ring is save up for it, which means that you're going to slow down probably the truck in order to get there and that's what you're looking at so hey thanks for the call open phones at 888-825-5225 lou is in chicago hi lou how are you better than i should be dave how are you the same how. How can I help?

Well, I have a 14-year-old daughter in high school, and listen to her. She is the last remaining 14-year-old on the planet without a smartphone, and she wants one desperately. And while we could afford it, it would not be a hardship. We have been following you, and we just got our hands on the book you wrote with your daughter. But I wanted to hear what you had to say about how we could have her pursue some sort of savings towards this. She's a good kid, and she is involved in a lot of giving-type clubs at school, and I don't want to discourage that just to make money to buy a phone, you understand? But I do want her to have a sense of earning.

You're right. There's four things you can do with money, and our job as parents is to make sure the kids can do all four. Work, save, spend spend wisely and give she's good at giving um she's probably not afraid of work right and so it's okay to balance the giving with the saving in order to do some wise spending so um it sounds like there's an opportunity for some lessons here which is what i'm always looking for i'm not as worried about the actual purchase because you could afford it you can try to check by the phone phone right but is there an opportunity to create a lesson here and it's something she's highly motivated to do so maybe we do a matching plan we say when you

save up this amount while maintaining some giving, while maintaining wise spending, then I'll match that and we'll do the phone. Could you expand on that just a little? Yeah, put a price. Does she earn any money doing anything? Actually, she just, it's funny you mention that, just in the last week, she got an idea of making these little bracelets, and then she's been getting about $5 each from, it's funny you mention that, just in the last week, she got an idea of making these little bracelets, and then she's been getting about five bucks each from, seems like a number of her friends have been interested.

Okay, so how is she doing giving then? You know, that would be lacking. Oh, I thought you said she was in a giving club at school. That's with time. Oh, I see. I see, okay. Yeah, so, all right, let's get her working. Whether she's doing chores at the Oh, I see. I see. Okay. Yeah, so, all right, let's get her working.

Whether she's doing chores at the house, I don't know what she's doing, but let's get some kind of income flowing in. It doesn't have to be a big deal. And you can match her three to one. And so if she saves up $200, you put the other $600 with it or something like that and get the $800 phone if that's what it is. I don't know which phone you're looking at, but something like that. And have her give some and have her spend some. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. Did you know you can now

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