The Ramsey Show - App - Here’s How You Get Started Building Wealth (Hour 3)

Episode Date: November 29, 2022

Dave Ramsey & Kristina Ellis discuss: How to get started building wealth, Dealing with the loss of a job, How much life insurance you need. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the pods of moving and storage studios, it's the 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 we help people build wealth do work that they love and create actual amazing relationships christina ellis number one best-selling author. Ramsey Personality is my co-host today. Our phone number is 888-825-5225. Aurora is with us in Portland, Oregon. Hi, Aurora. How are you? Hi, I'm good. Thank you. Good. How can we help today? So, the last couple of weeks, I've been kind of, you know,

been watching all of your guys' stuff on YouTube. I actually found you guys on TikTok. And I've just been kind of, you know, the last couple of months I've been really trying to get settled and pay off debt. And it just seems like any way that I try, I can't. And I always refer back to living paycheck to paycheck. And I'm just, I'm kind of over it. I don't feel like I'm content where I am in life.

And so I feel like part of that is just having so much debt and having kids to take care of and wanting to plan for them and I don't I don't know like where to start I don't know what to do anymore. Boy I like you you're in a really really good place thank you for calling. And I like you just because you mentioned to Dave that you found us through TikTok. Dave loves TikTok. I'm not sure if that speaks poorly of you or of me, but one of the two. Okay. I love it. Yeah. And it's actually my birthday today. So I'm like, you know what? Happy birthday. Glad you got through. Thank you. Like if it's not today, then I don't know what day. Yeah, it's a great day to call. So walk us through the debt. How much debt do you have? Well, I paid off quite a bit now, but I have about $21,000, I would say, between my partner

and I that we still need to pay off. And most of it is credit card debt. So you said you paid it off. Tell us about the debt you paid off. So back, you know, when they were giving the unemployment during COVID, it took months for me to get my, like, checks because everything was so behind. And when I finally got, like, my claim, it wasn't that much. I paid off my car. I was like, this is one thing that I need to, you know, get rid of because, God forbid, I, you know, can't work anymore. I can't find another job. I need that, you know, I need that to get around. Yeah, I just want to stop and applaud you for that because the fact that you're already,

you know, wheels in motion, you paid off your car. That's great. Yeah. So what's your income? Between my partner and I, we make about $5,500. Okay, let me stop a second are you married no we're not we live together okay all right so legally you are too you have a roommate and from the handling from the handling of your money that's the way the law is going to look at

it right yeah so um you pay off your partner's debt you get zero credit for that with the law okay so you're combining your money with your roommate is a bad idea yeah because of where you stand legally so how much the 21 000 is that all in your name no okay what is in your name 10 000. What is that on? That is credit card. Okay. And good. And you paid off your car. Way to go. And what do you make? I make a month is about $2,200. Okay. Good for you. And how old are you? I'm 28. And what do you do for a living?

I'm an elementary school secretary. Well, thank you for your service. Thanks for what you do for the kiddos. Okay, so if you've been watching the videos, are you familiar with the term gazelle intense? No, I'm not yet. Dave, can you do your Daveave explanation you do it the best okay so here's the thing what we have figured out is is that personal finance is 80 behavior it's 20 head knowledge and so for your partner with their money we'll tell them to

do exactly the same thing you're doing but not combined but not combined so we'll have the same result that you're looking for but when you combine them you leave yourself open to other problems that we don't want to get into okay like who who bought the mustard or whatever all that garbage right so um now uh so the what we if Now, if personal finance is 80% behavior, that means when I get control of me, I have the best possible control of my outcome with my money. The more intense I get, the deeper I sacrifice, and the deeper I sacrifice, the more money goes towards cleaning up the mess, and the quicker I get stabilized and moving towards wealth. So, in other words, if you goof around with this stuff and sort of kind of do it, and you still go out to eat, and you still go on vacation, and you still buy a bunch of crap that hasn't got anything to do with the goal of getting rid of these credit cards,

it's going to take twice as long, and you're going to be half as likely to ever even do it right and if you get so intense that it's like if you get so intense that it's like you're going to die if you don't get rid of this credit card debt in five months then you're going to work six jobs and you're going to eat ramen noodles and you're not going to do nothing but work and get out of debt because that's intense and sacrifice and that's what we mean by gazelle intense like the gazelle running from the cheetah doesn't want to be eaten and doesn't want to be killed they're they're running for their freaking lives this is not an intellectual discussion this is very visceral it's bone marrow you are going for it right and that's that's there's

something that happens in 30 years of me doing this when people get that level of pissed off that they're willing to cut everything that their friends think they've lost their minds they think you've joined a cult then you're on track so you need to get out the credit cards when you get off the phone and chop them all up into little bitty pieces every one of them and you need to get on a written budget and you need to get out the credit cards when you get off the phone and chop them all up into little bitty pieces every one of them and you need to get on a written budget and you need to get another job or six and you're not going out to eat you're not going to see the inside of a restaurant unless you're working there and you're not going on vacation all you're doing is getting out of debt because how's it going to feel when you don't have any debt it's going to feel really good

how's it going to feel when you don't have any debt? It's going to feel really good. How's it going to feel when you don't have any debt and have $10,000 in the bank? It's going to feel really good. We call that financial peace. Yes. But you're going to pay a price to get there. You're going to have to live like no one else. So later you can live and give like no one else, okay? That's what Christina's talking about.

Yeah, and I'm super encouraged. When you split things out, you've got $10,000. You've got $2,200 a month. And you're 28 years old. You can work six jobs. You can make the sacrifices. You can do this quickly. You're working in elementary school. It's over 3.30.

You've got time to do three more jobs. I mean, you really do. I mean, you can go make some serious money. And there's people hiring out there like crazy right now. Big time. And you don't have to do this forever. You just do it for a short period of time. It's a sprint. You just bust it for a short period of time. It's a sprint.

You just bust it for a short period of time. Hang on, Aurora. We like you. We're going to put you through our class called Financial Peace University. We're going to pay for it. Watch those classes. Hold on. I'm going to pay for you to have a membership. Watch every one of them and do every single thing we said to do and you'll be wealthy. Up to you.

This is the ramsey show hey all you procrastinators listen up we've extended our cyber monday sale where you can get our best prices of the year on your favorite products this week only. Best-selling books and tools for as low as $5. Not exactly jacked up for inflation, but you got to hurry. I think we jacked it down. Maybe it's a recession. These deals end this week. You can shop our quick reads like my latest, The Momentum Theorem, Dr. John Deloney's Redefining Anxiety, all under $10. Our number one bundle, The Starter Special,

is everything you or a loved one needs to start working the baby steps, and it's 77% off this week. And our extended Cyber Monday sale includes my book, Baby Steps Millionaire's number one bestseller for $10 on how to be a millionaire. This is the season to share the hope we have with others. You can get almost any of these books, Rachel Cruz, Ken Coleman, Dave Ramsey, Dr. John Deloney, and on and on and on for $10 or less. Do the hard thing.

Share your experience. Give them a meaningful gift. Cyber Monday continues all week long. Ramseysolutions.com. Ramseysolutions.com. Kara is with us. Kara is in Milwaukee hi cara how are you good how are you better than i deserve how can we help so i was recently let go for my job about three weeks ago and i was the breadwinner for the family. My husband and I both worked, but yeah, I brought in about $3,000 more than he did, which is quite a bit. And now I'm trying to figure out, I do have another job lined up,

but it was a pretty big pay cut from what we're used to. So I'm trying to figure out if I should borrow money from my 401k to stay afloat. Absolutely not. Yeah, so I kind of knew you were going to say that because I've listened to you for a long time. So what does your husband make? So he makes about $45,000 a year. And what did you make at the other job that fired you?

$86,000. What do you do? I was a transportation supervisor for a company okay and so you're uh well you're running distribution or what i don't understand um so the company produces things like um epoxy and bleach, stuff like that, and then I organize the transportation for all of that across the country, the world, stuff like that. Okay, so you're in a supply chain of sorts. Okay.

Yeah. All right. How long had you done that? I was there for six years. Okay. All right. And what's the new job? What's the new possibility?

So the new job is kind of the same thing. It's a freight broker, but it's for different products. So not hazardous, not chemicals, just like dry goods and arranging the freight for other companies who call. Yeah. What's the pay? It's $55,000 plus commission. Not good enough. You need to keep looking yeah yeah you've been out of work you've been out of work a whole three weeks

yeah here let me tell you okay what normally happens to normal humans is that getting fired is or getting laid off whatever term we downsized right-sized whatever you want to call it is um it's a gut punch it knocks the breath out of you it takes some of your confidence and then you look at your budget and you're in your uh lowered confidence state of mind and your budget is super tight and super scary we stir those two things together and we get freak out mode going yes which causes you to take a job quick too cheap you're better than this other job this new job aren't you yes i believe i am yeah yeah and i think you need to go make something like $86,000 again.

And in the meantime, I want you to do weird, crazy side jobs during Christmas and your husband, too, so that you're not in freak out mode. But I want you to jump on Ken Coleman dot com on his Web site and study everything on his thing. I'm going to send you his two books, Proximity Principle, which is how you land a lead for the right kind of job. It's probably how you got this lead because it's in the same industry you were in or the same type of field. And as somebody you knew, you were in proximity to. You didn't get this out of an ad on LinkedIn, right? Correct. Yeah, because you knew somebody.

Oh, and by the way, they might want you about enough to pay you 80 instead of 55. Yeah. When you decide to walk away instead of taking it. Say, you know, I think I'm worth this in the market. I understand that's what you're paying. I'm not trying to be insulting to you, but I think i can get this doing this job i'm i got eight years of experience of um you know organizing transportation nationwide worldwide to cause products to be delivered on time and and people that can run schedules like that they don't grow on trees

they're not everywhere and i'm sitting here with all this experience and i can make your i can make your operation hum but i can't do it for 55. I can do it for 85. And do you guys have an emergency fund? So we actually, my husband and I did start going back through the baby steps. So I took the course, the financial peace course, probably like eight years ago at this point. And that's where I laid out my budget, which I still use today. And then I got married, we had another kid. So all this stuff, and we kind of got off track.

So we started over. So we do have a very small savings and we're going back through our debt snowball. He didn't believe in the debt snowball. So I made him watch these videos and listen to one of your audio books and all this stuff. And he's like, okay, I'm on board for it. And then I got terminated. So we were there and we're trying to stay there, but it's hard wanting to stay there with all of the jobs. So if you go get, both of you go get two good paying extra jobs for 30 days instead of tapping your 401k and you go get a job making the money you're actually

worth cara you are worth 80 to 90 000 a year in this job environment where there is a shortage of labor where it is hard to find good people who are willing to work you are worth that and you can get that job it's out there okay and i don't want you to settle and i would rather you have him deliver pizzas and you do uber eats or whatever it is you guys do for extra money right really i'd rather you do that for 30 days and get a job making 90 than to get a job making 55 because you got scared right after you got gut punched. Yep. And go down to a bare bones budget. I'm encouraged to hear that you're on a budget, but cut out everything.

Everything. Yep. You can't afford to eat out. You're broke. You're living on $45,000 a year. And you used to have $120,000. My church was kind enough to give us a gift card for the grocery store and set up a meal train so that you go amen yeah that's that's that's the there's no

shame in that at all and you can do that for someone else if you live and give like no one else later you can live and give like no one else you'll be in a position to return that and pay it forward so i want you to do all of that and we're going to help you too i'm going to send you ken coleman's two books one's paycheck to purpose and the other one is Proximity Principle. And there's a bunch of free stuff on how to put together the proper resume, how to write the proper letter and how to come in contact with the people that are going to lead you to the next job. Because what you need are more options and the options are going to come when you get your swagger back and you are deserving of swagger yes thank you okay uh you are there's a i'm also going to send you the momentum theorem which is my last little

quick read i'm going to send you so many books are going to be reading okay but um give you something to do and the momentum theorem one of the things we start out with in that is when things are going super good, you got momentum. You're not as good as you look. Things are better than you are. When things are going super bad, you're not as bad as you look. You got you're better than the circumstances indicate. And that's where you're living right this second. You are better than your circumstances

indicate and you need to hear someone that's outside of the forest say that to you and i just said that to you and i love you and i want you to win so you hold on austin's going to pick up we're going to give you those three books momentum theorem paycheck to purpose and proximity principle And Proximity Principal, KenColeman.com will send you where you need to go to get all kinds of goodies to resumes, ideas, everything, how to letter to write to get in the door, the email to write to get in the door, all that kind of stuff. It's all right there. It's all helpful on career stuff. This is The Ramsey Personality, is my co-host. In the lobby of Ramsey Solutions on the debt-free stage, Corey and Kimberly are with us. Hey, guys, how are you?

Great. How are you? Great. Welcome to Nashville. Where do you live? We live in Sandusky, Ohio. Ah, fun. Good to have you.

Welcome. Yes, thank you. Good, good, good. So how much debt have you paid off? $270,000. That was our business loan that we bought. We had like a Pepperidge Farm franchise. They're like little routes that you buy.

So we bought that. My whole family's actually in the business, and my dad owned the territory, and then I bought it from him, or part of it anyways, the bakery part of it. And then my other brother runs the Snyder's and all that. So, so it's all a big family affair. We do that.

And then we did that in 2019, we bought that and that was 162,000 that we bought. And then in 2020, March of 2020, we bought our house. Oh yeah. Literally the week of COVID when everything was falling apart. The week of COVID. We actually bought our house that week. Like in the middle of March. Yeah. The week it went when everything was falling apart. The week of COVID. It was crazy. We actually bought a house that week. Like in the middle of March.

Yeah. The week it went crazy. March 20th. When they said, go home, you're going to die. Yeah, I remember that week. Yeah, we'll stay home. Wait a minute. I just bought a house.

I love it. Yeah. Absolutely. Yep. So that was- So is this your house and everything? Yes, that's everything. So I'm looking at weird people.

You're 100% dead first. Yep, 100%. Way to go! And before our first child arrives. I love it. Just in time. I love it. So how long did this take? Started in

May of 2019 and then we paid it all off by September 30th of this year. So all of it, completely. So what does that end up? About 30 months? Is that about right? About two and a half years? Yeah. Closer to three, something like that. So all of it completely. So what does that end up? About 30 months? Is that about right? About two and a half years? Yeah. Yeah.

Closer to three, something like that. I'll call it three. Okay. I can't do it in my head right now. All right. So your range of income during that three years?

So when we first bought it, the route, my whole route was doing like maybe a hundred thousand a year. And then it was consistent, I guess, but then COVID happened and the whole world

flipped upside down and everybody stayed at home and they were just eating and basically buying all of our products. Good for us. So my route grew like crazy that year. All the restaurants were closed, you know, everything like that.

So yeah, that helped us a lot. So yeah, that helped tremendously. And then I told her, I said, when we bought our house, I said, well, if you go and you make like extra couple hundred every week you know that's enough to do a double payment payments every month just keep hammering on it and so we did and she kept working and working and then it did instacart for a little

bit worked at chick-fil-a a little bit okay and uh then worked at a church doing ministry for a little bit so whatever it takes huh right and now you're a hundred percent free so making a hundred to over 200 at some point in the high point right yeah yeah good for you guys well done very well done how's it free to how's it feel to be completely free amazing yeah yeah um i just i think of like everything going on in the world it just it's crazy from time to time we sit there and i'm like well whatever happens if we go in a recession it doesn't really matter because we're debt free. We don't have to worry about those burdens and payments.

And so it's very exciting. And another big goal was before our daughter came, I was having a girl, and we were just like, yeah, we really want to do this before we start having kids. And we tried for a little bit before we got her. And so the fact that we could do this before we even had any kids was a really big goal. Yeah, that's super cool. That's amazing. I love the fact that we could do this before we even had any kids was a really big goal. So yeah, that's super cool.

That's amazing. I love the fact that, uh, I kept telling her over and over. I said, we work really hard for like two or three years. We can just bust our butts and pay everything off. And I kept saying, live like no one else. Just like your signs. I love that saying. We love it.

We say it all the time. I walked in and I was like, Oh my gosh, it literally, I'm like, it's worth it. It's worth it. It actually happened. We did it. Yeah. I mean, at times it was like, uh, but I'm like, it's worth it. It's worth it. It actually happened. We did it. Yeah. I mean, at times it was like, oh, but I'm like, it's worth it. It's worth it.

Oh, yeah. You guys did it too in a short period of time. That's amazing. Yeah. I mean, there was at one point we were paying almost half our income in just paying off our route payment, our mortgage. And then after we paid that off our route in June, I said, let's just hammer it all out on this thing.

We were dropping like 10 grand a month into the house and just destroyed it. More if we could at a time, but yeah, a thousand at least. So what would you tell people is the key? Determination. Well, God is everything. God is the center of that. We were dedicated to glorifying him with our money and then just, yeah, keeping the perspective of big picture and seeing everything.

And I would say also little sacrifices at times. Like times we would tell our family we can't go out to eat, stuff like that. Like can't go with friends to do stuff. But we had the end goal in mind. So just keeping that stuff in mind as well. How old are you two? I just turned 30. I literally told her, I said, I want to pay everything off by the time I'm 30.

I turned 30 in beginning of November, November 2nd. And I'm 27. Ah, very in beginning of November, November 2nd. And I'm 27. Very cool. What's the house worth? We bought it for $115 and we did a bunch of fixing up on that too. I don't even know what anything is worth. I'm guessing maybe $150, maybe more.

It's a little ranch. It's a little ranch house on 1,200 square foot. It's 100% paid for and it's 100% yours. That's pretty cool. Very few people have that experience in their life. Yep. I know. And you guys did it by the time you were 30.

Yeah. We got a 15-year loan when we did it. I was like, well, if we can pay this off in like five years, then I was like, forget that. Let's do it now. Let's do it now. Let's do it now. So take us back a little bit. Have you all always been good with money, or what really clicked that made you go, no,

not me. Well, we got married. He's always been good, but not me. I've always been a hard worker. I saved money and my whole family's like that. My brothers and my parents and all that. And that's just the way we grew up. And then we got married and she was kind of like, what?

This is not how I live with money. It's not how I was taught. It's like, no, that's not the way we're going to live. We're going to do it this way. And I'm so glad I learned because he's so right. Way to go, you guys. We're proud of you. Thank you so much. Who were your biggest cheerleaders back home? My parents probably. Definitely parents.

And my brother. Actually, at the end of it, when we were trying to pay off our house and finish our house off, my brother has this night around and he bought this thing like a year ago, two years ago, I don't even know what it was. And he was like, I'm going to pay mine off

before you pay your house off. And he actually did. And he did. But I was like, who cares? We paid it all off. Good competition. Oh,

they're so competitive. So competitive. Oh my gosh. And then my other brother, him and his wife, they had student loans they got from school and they paid off 57,000 in like seven months or 50. Yeah.

There's a lot. So the whole family's on the go. Oh yeah. Yeah. We're just, we watch all your guys's like your videos and we actually started doing, I did a Bible study. We were leading a Bible study and we are doing a right now media Bible study

and it was one of your financial Bible studies was on there I don't even know which one it was but and that was all the principles and I was like teaching it and I was like well I might as well

go along with this and learn this and actually do it you know not just teach it but actually live it out so yeah that was pretty awesome might have been the one

we put on YouVersion yes with the YouVersion Bible app that might be very cool good for you guys thank you very good stuff

proud of you proud of you we got a copy of the live and give good for you guys thank you very good stuff proud of you proud of you we got a copy of the live and give bundle for you that's the uh total money makeover book the baby steps millionaires book you're going to be there before you know it and of course a one-year membership to financial peace university any of that you don't need obviously give it away and inspire someone else like your whole life has been an inspiration to other people. Very, very well done. And today you've been an inspiration to other people. Very cool. So excellent, excellent job. Good, good work.

Corey and Kimberly, Sandusky, Ohio, 270,000 paid off in 36 months, making 100 at 200. Count it down. Let's hear a debt-free scream. Oh, we count it? You're it? I'm sorry. I thought you guys counted it. Three, two, one. We're debt-free!

That's how it's done. That's the opposite of being 28 and overwhelmed by $10,000 worth of debt. An earlier call. Isn't it interesting, the math and the attitude and how you just say, I'm going to kill that. I'm getting rid of that. Or this is killing me. Whether you're on top of it or it's on top of you.

And it is the old Henry Ford quote oftentimes if you think you can or you think you can't you're right hope belief that it can be done if you go do the steps is actually more powerful than the math yeah it really is we see it we've seen it for 30 years we've seen it over and over and over and over again. Beautiful couple. Beautiful couple. And I just love how their story highlights the importance of community. That competition, that healthy competition, that's so cool and so good. Y'all drove each other to do what was best for each of your individual situations. And that's just, that's awesome. Oh yeah. They're driving each other crazy in a good way. Good stuff. The best kind of way. Good stuff. This is The Ramsey Show. ស្រូវានប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប់ប� Our scripture of the day, Psalm 1611,

You make known to me the path of life. In your presence there is fullness of joy. At your right hand are pleasures forevermore. Eleanor Roosevelt said, Do not stop thinking of life as an adventure. You have no security unless you can live bravely, excitingly, imaginatively, unless you can choose a challenge instead of competence.

Love it. Love it. Get competence. Ooh, love it. Love it. Get after it. Get after it. Change something. When in doubt, bust something. When in doubt, change something. And most people just live quiet desperation, as they say.

Lives of quiet desperation. This idea of I'm searching for stability. I'm searching for calm nah get it get after it chris is with us chris is in st louis hi chris welcome to the ramsey show hey guys thanks for taking my call um first thing i think i need to give all the callers a little word of advice if there's ever a debt-free screen right before you you do not need to hold the phone up to your ear. Wow.

Holy cow. My right ear might be bleeding, but it's pretty awesome. Anyway, I wanted to ask you a question. I'm just kind of curious. My wife and I, we're in four, five, and six. I feel like we're doing a great job. We're kind of killing it, I feel like. But I don't know. I guess we did our emergency fund and set up our life insurance

about five or six years ago. Uh, since then our debt has drastically gone down. We only have the mortgage obviously. Um, and our income has like doubled. So with having fewer payments, but like that's for instance, our six-month emergency fund, if you take all of our expenses, it's about $15,000. We make a little over $200,000 now. So I feel like it's not a good ratio.

But, I mean, it is our six-month. It's not a ratio to your income. It's an interesting thing, because what's happening is that what used to be an emergency when you were broke you now cash flow it oh well that's true yeah because you're you know you blow out a tire you just go buy a tire you don't have to hit the emergency fund but when you're broke you're like oh god oh no God, oh, no, you know, and you have this drama, and you go hit the emergency fund, right, because you've got no money. But you're making such good money, you're cash-flowing a lot of bumps in the road, a lot of minor unexpected events that would be, when you're broke, qualified as an emergency.

So that's the reason we use a ratio of expenses, not a ratio of income. I see. Okay. Yeah, it just seemed like a small amount compared to our income. But like you said, if we can cash, well, 90% of everything, it doesn't. Yeah, and you've got a great income, and you've got other money. I mean, you've got money going into retirement, seriously, and we're not going to cash that out for an emergency.

But before you would get foreclosed on, you would. Right. Okay. Well, that makes sense um and then another kind of on the same lines um we set up our life insurance at that whenever we were both making you know we were making like a hundred total so right now which we're i guess five years into the 20-year term we have 500 on each of us well my wife my wife makes like 80, I make 120. So, I mean, do we need to...

How old are you guys? We're 35, both of us. Healthy? All right. Overweight? No. Smoke? Nope.

Wow. Another 500, a 15-year level term won't cost you anything, hardly. Okay. Yeah, go to zanderinsurance.com and quote it and you'll be going it's the cost of a dead gum pizza right and so I'm going to add another 500 just for the fun of it I mean you can split it up

however you want to but because it's not that she has to have 120 if you die income replacement but it doesn't cost that much to provide that It's not that she has to have $120,000 if you die, income replacement, but it doesn't cost that much to provide that. Okay, yeah. Again, as a percentage of $200,000, what you're going to spend on this policy is almost nothing.

I see. Okay. And I guess it doesn't really matter. I guess I'm talking about expenses again because we should have our house paid off in like a year. Yeah, this is almost in the area of luxury. It's not necessarily in the area of necessity, okay? But the idea is if you die, how do you want to leave your wife? I want to leave her making $120,000 a year off of investments because it didn't cost me anything but the cost of a pizza to do that.

All right. Well, that makes sense. But does she have to have that to live? Oh, my God, no, no. I mean, she can live on half that easy. She could make it easy on half. You got half a million on you. She'd be just fine.

She had $50,000 coming in plus her $80,000. You know, she'd have $100,000-something coming in. She'd be just fine, you know, if you don't up it. But when you price it, you're going to go go it's a non-issue okay well yeah yeah we were just kind of looking over the big picture and i'm like man i feel like our life insurance and our emergency fund are just very small now because that's what we're making now but it is um it is and it gets smaller over as you're the other thing you're going to look up one day and you're going to go i got a million dollars or a million and a half in my 401k. And then you're going to go, I probably don't need any insurance now. She's going to be just fine if I die. And you get to the

point, the insurance you don't need because you're out of debt and you've become self-insured with financial planning. Yeah. I think it's so cool. These are the fun financial conversations to have. These are the conversations you have in four, five, and six. So for all of you who are feeling frustrated in baby step two, having conversations about the debt snowball, someday you get to have conversations, you know, about should I up the emergency fund because my income is so high. And, you know, just talking about killing it in four, five, and six,

I think it's inspiring to hear you guys at this point having these conversations because this is a time where you can feel joy when talking about your finances. Yeah, I mean, what's the next step for them? The next step is they're in seven yeah it's about a year away paid off their house okay the house is paid off now they got almost zero expense they got zero debt okay then we start looking at what does it take her to live what's it take him to live in the event of a death it's almost it diminished greatly what's it take to operate our household expenses to emergency fund 15 000 is a lot then laying around i mean you can have 20 or 30 if you want to but it's just the the weird thing is is we share and i talked about it a lot it was like when we finally got a fully funded

emergency fund and we were finally out of debt everything but the house we almost quit having emergencies murphy didn't visit but it seemed like everything was an emergency before that finally out of debt, everything but the house, we almost quit having emergencies. Murphy didn't visit. But it seemed like everything was an emergency before that. Everything. I mean, we live in a new construction neighborhood, and Sharon picked up a nail on the front of her tire this week. And so I got to buy a tire yesterday.

But it was kind of a yawn. Yeah, not a big deal. Murphy feels different whenever you have the cash to pay for it oh that's inconvenient you know oops yeah yeah you know it's like uh instead of an emergency it's an inconvenience and that's not being snobbish and saying i have money and so i don't know but the point is you get this margin in your life and it also gives you financial peace emotional margin it gives you a relational margin you know um someone in our marriage that is not me hit the garage side of the garage with a car and left a dent in it the other day and it wasn't me i don't know which of the other people it was but i won't say but it's like oh well we get to fix the car oh well it's like i don't have which of the other people it was, but I won't say, but it's like, oh, well,

we get to fix the car. Oh, well, it's like, I don't have to throw a fit because my wife dinged up the car. Right. When you were telling a caller earlier that was in debt, that this is a sprint, this period of time when you're in baby step two and you feel like you're drowning, you feel stressed out and you got to get gazelle intense and take six jobs. Like this is a sprint. This isn't forever. Eventually you will be through this. Hopefully, you'll up your income permanently, and then these things will not feel as big. You're going to get to it.

Chris is right on the tipping point. He's almost tipped on over. So his question is really good questions, and they're really natural questions that you kind of have to intellectually make a shift once you get away from desperation and into margin away from you know drama and into yawn and you kind of have to make a shift and go okay what's wise now what's wise now what's wise now and it's less and less and less and less and less and you know we used to joke i noticed the other day my final life

insurance policy lapsed the other day and i hadn't canceled them i could have canceled them and saved the money uh but uh obviously i mean we've got hundreds of millions of dollars of real estate paid for sharon doesn't need any life insurance it was ludicrous that i still had life insurance in place but i just let it run because she wanted it swi sharon wants it and she said i'd rather have that than another you know shiny rock like okay you're gonna have it i'll keep it it's absolutely not a financial planning thing it's a sharon thing you know but it was irrelevant it's a yawn at that point because the margin is there and that's what you're that's what you're working towards that's where we want to take you

so very very cool stuff that puts this hour of The Ramsey Show in 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. Have you been inspired to make a change with your money? Want to know where to start? Take our three-minute money quiz to get a plan you can follow. Go to ramseysolutions.com and search for Get Started to get a plan for your money.