The Ramsey Show - App - Hope Is More Powerful Than Math (Hour 1)

Episode Date: August 20, 2019

Dave Rant, Insurance, Home Buying, Debt   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE   Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR  

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 am Dave Ramsey, your host. Open phones this hour at 888-825-5225. That's 888-825-5225. If you tuned in wanting a sophisticated radio show that would cause you to go straight to sleep by boring finance professor, you got the wrong place. This is God's and Grandma's ways of handling money.

Common sense. You're going to hear things that make you say, oh, I already knew that. Because you already knew it. People don't tune in here to get necessarily tons of new information or things to tickle your brain or to make your intellect go into spasms. I don't have the ability to provide that. I do have the ability to show you how to win with money. or things to tickle your brain, or to make your intellect go into spasms. I don't have the ability to provide that. I do have the ability to show you how to win with money.

But it's deep things, easy to understand things, like live on less than you make. Hmm. We can just go home now if you want. If you do that one, the rest of it will pretty well work out, won't it? You could be generous more than you are now. You could get out of debt more than you are now. You could save and invest more than you are now. But you've got to control you,

and you are a salmon swimming upstream in an Instagram world showing you how pretty and beautiful and smart and wealthy everyone else is, and it's all fake because no one's that pretty or smart or beautiful. I've seen all of you with makeup, and some of you are just proof that all barns need paint. There is just none. I mean, we're all this way, people. We're all this way. So the deal is, common sense works, and some of the most profound things you'll ever learn

in your life are easy to understand and hard to do because they have to do with controlling you me too i know how to lose weight less chocolate chip cookies knowing it and doing it's two different things i like chocolate chip cookies a lot it's a problem i have well you too huh okay so we started teaching people 30 years ago how to get out of debt and i'm a math nerd and so i immediately said you need to pay off the largest interest rate first because that's mathematically correct after doing this for 30 years with millions and millions and millions of people, I figured out that math is not the only solution to personal finance, which is 80% behavior and 20% head knowledge. The way you get out of debt is not about math.

You get sick and tired of being sick and tired. You have an I've had it moment where you say, That's it! I've had it! And until you've had that moment, I can't really help you. This is not an intellectual exercise this is i'm pissed off at normal exercise i'm not going to be normal anymore and i've got a righteous anger that's rising up inside of me and i'm going to change my freaking life that's when you get out of debt and then you list your debts smallest to largest we call that the debt snowball

because it's behavior-based not math-based and by the way it's more successful than all the other crap that some of you have as a theory you're broke and writing a blog about finance in your mother's basement nobody gives a rip what you've got to say you haven't got any proof as my young millennial team tells me, we need social proof. We need proof with people out there really doing it. Well, we've got, like, truckloads, buildings full of social proof, 30 years of social proof of you people doing this stuff and winning. More than any other brand in America, if you say Dave Ramsey, what do people say?

Get out of debt. List your debts smallest to largest. Well, what about, what about? Shut up. Just do it. You're not the exception. I know all snowflakes are unique, but they all are subject to the law of gravity. That's how we have snowfall.

I get it. You're special, but you're subject to the law of gravity. If you want corn, here's how you get corn. You dig a hole in the ground and you plant corn. Don't argue about it. Just freaking do it. List your debts smallest to largest. Pay minimum payments on everything but the little one.

Attack the little one with a vengeance. Sell so much stuff the kids think they're next. Put the dog onbay and the cat on craigslist get out of there baby we're done amputate the tahoe your freaking car owns you and you gotta make a decision to live different because normal sucks you don't want to be normal anymore list your debts smallest to largest attack the little one when the little one's gone you take the payment that you had there and every other ounce of money you can squeeze out of your newfound life that involves spending nothing and working more,

and you pour it on that next debt. And when the two debts are gone, you take those two payments that you don't have anymore and more enthusiasm than you ever had before, and you put it on the third one. And by the time you pay off three, you're like, oh, yeah, this is going to work. See what hope does. Hope is more powerful than math. Once you start to believe, then you'll sacrifice deeper.

You'll work harder. You'll really start to do stuff that your broke friends think is nuts. By the way, if your broke friends are making fun of your financial plan, you are right on track, sweetheart. If Instagram is appalled at your newfound life, you're right on track. If you find out that some of your Facebook friends aren't real friends, then you're right on track because they weren't. And not everybody that likes something on social media really likes it. I know these are shocking truths to some of you, but this is how life works. List your debts smallest to largest.

Pay minimum payments on everything but the little one. Attack the little one with a vengeance and tear its butt off, man. Get those credit cards out. Light some candles and have a plasectomy ceremony. Let the children help you cut them up so the children won't ask to use them because they know they're gone. Let them experience the death of plastic in your house. Get you a couple of debit cards and start paying for stuff. You're not in Congress. Quit buying crap you don't have the money for. This isn't hard, but it's how you're supposed to live your life. It works. It's common sense. If you want to know why we're getting out

of debt because it's the shortest path to wealth building when you don't have any payments now you have the ability to become wealthy it's the short why do you want to be wealthy well change your family tree retire with dignity be the first old man or old lady who did it right in your family tree. Oh, and by the way, you can be outrageously generous when you have wealth. I've noticed that poor people don't feed many hungry kids. I know you think wealthy people are evil because you've been watching too much stupid television, but they're the ones that feed the hungry people. Better than the government does, more efficiently than the government does,

and more likely than the government does. That's what happens in the real world. Look at the billions of dollars Americans give away every year in charity. It's because they had billions of dollars. You have to start with that. So you get out of debt so that you build wealth. So that you change your family tree.

So that you can be outrageously generous. You want to learn how to do all of this? Go to Financial Peace University. We've taught six million people how to do this. It's a nine-week class. It changes everything. Go to DaveRamsey.com slash FPU. We'll put you in the right community, in the right mindset.

We'll show you how to do this stuff. And please don't argue with a corn farmer about how to plant corn. I know more about this than you do. Now go do it. Financial Peace University will show you how. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance?

Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated, and Zander will be there as your guide every step of the way.

Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice, and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. Joel is in California. Hi, Joel. Welcome to the Dave Ramsey Show. Hey, Mr. Ramsey.

Thanks for having me on. I appreciate it. Certainly. How can I help, sir? So I'm calling in. Currently, I live in California, and I'm going to be moving back to Seattle at the end of the year where I'm from. And I just got finished up with Baby Step 2 on Baby Step 3, getting some savings set up.

Good. But I'm actually moving up there to start a property management company, and I was wanting to find out from you, what are some good insurance coverages I should have for myself, the homeowners that I'm renting for, what should they have, and then as the renters themselves, are there any requirements you would suggest for getting kind of coverage? I'll back into that. We require our tenants to carry renter's insurance on their contents because as a landlord, we are not able to cover their contents.

In the insurance world, they call it an insurable interest. If I don't own something, I can't insure it. In other words, I can't buy insurance on your car. It's your car. I don't have an insurable interest. And so as a landlord, you know, the tenant needs to do that. And most tenants don't do that. A couple hundred dollars a year will give them great coverage in most states for renter's insurance. The landlord gets

a policy similar to a homeowner's policy. It's called a fire and EC policy, a fire and extended coverage. And it's basically, you know, a landlord version of a homeowner's policy, but again, does not cover the contents of the tenant. It covers their structure, you know, for fire and so forth, vandalism, you know, those kinds of things. The insurance you would carry as a property manager would be just basic business liability insurance. If you want to, in most states, you're going to get a real estate license to be a property manager, and in most states, they furnish and require through the state an errors and omissions insurance policy.

In Tennessee, I'm a real estate broker, and I have an E&O policy built into my licensure here. And so a lot of states are doing it that way. If they're not doing it that way in the state of Washington, then you would get errors and omissions. So that if you somehow just really made a huge mistake, an error, an omission, and it cost the landlord a lot of money and they came after you professionally for a professional error as a property manager, then you would have coverage for that. But, you know, basic liability insurance for owning a business, it's not very much in a small business like you're talking about. You might not even buy it the first year if you're really small and just getting started. But you do want the E&O insurance if it's not required by your state.

I still would get it anyway, errors and omissions insurance. Christian is with us in Washington. Hi, Christian. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for having me, my friend. Sure. I currently am two years into a 30-year mortgage um i owe 400 000 and my interest

rate is a 4.625 i want to know if it's better to pay more per month or to refinance at a lower rate into a 15 year well if you had a competitive interest rate, which you don't on your mortgage, I would tell you to just pay your 30 as if it were a 15. Calculate the 15-year payment and pay your 30 based on that. It'll pay off in exactly 15 if you do that. Your interest rate, however, is a point, point and a half high. And so you probably should look at refinancing just to get your interest rate down. You probably get it down into the low threes right now on a 15-year.

While you're at it, go ahead and put it on a 15-year. But if you were to save 2%, which you can't quite, but 2% would be $8,000 a year. 1% would be $4,000 a year. One percent will be $4,000 a year. And so if your closing costs are, you know, like $8,000, which they'll probably be, you're going to recoup that in interest saved within a couple of years. Nice. That's what I was kind of thinking. I just didn't know about fees and things like that, but I will get that paid back. Yeah, what you've got to do is just figure out, you know, the exact way to do it is called a break-even analysis, and that is simply you find out what your closing costs are going to be from Churchill Mortgage.

They sit down and tell you what it is. And then you take that number and say, what is my interest rate now? What's the interest rate difference? And what I'm going to end up with, multiply that difference, the savings, times $400,000. That gives you your actual dollar saved, right? So if it's one percent it's going to be four thousand bucks and so you would divide your closing costs by the dollar saved and tells you how many years it takes to get your money back if it takes more than about three to get your money back a refi doesn't usually make sense but in your case i think you're going to find that you're going to get your money back

in about two give or take and as long as you're going to stay in the home for two, there's no profit in this until after you break even on the closing costs. And so there's no gravy on the biscuit until after that break-even point, the two years and three months to get your closing costs money back with the interest saved. That's what you're looking at. And that's how you decide. Do not refinance, folks, just to move from a 30 to a 15. If you've got a 3.1% 15 or a 3.1% 30, just keep it and pay it like a 15.

Pay your 30 like a 15, and it'll pay off a 15. By the way, if you pay like a 10, it'll pay off a 10. If you pay like a 7, it'll pay off a 7, too. That's exactly how it works. The math works. It's calculated like an old simple interest loan like car loans used to be. Keong is with us in Florida. Hey, Keong.

Whoops, I hit the wrong button. There we go. Okay. Hi, Dave. Hi, how are you? Good, how are you? Better than I deserve. What's up?

I have a question. I'm on babysit, too, and I am behind on credit cards. I have about eight of them. We're behind about three to four months, some of them five. Should I bring them up to date and then start paying them in our snowball or should I just let them charge off and then pay them and do the snowball as well? I just don't know what to do. And you're behind five months on some and two months on others um yes three to four on some and then five on others okay um your credit will be better if you catch them up and then pay them off in full okay if you let them go all the way into default you will have more late payments which

will further damage your credit and settling a credit card for less than full amount owed also damages your credit. Now, I don't spend a lot of time wringing my hands about credit, but it's a good thing to consider. I don't spend my time destroying it on purpose either. So, you know, what's the total balance on all of these cards? How much credit card debt do you have? About $20,000. And what is your household income?

We get around about $4,700 a month. Why are you behind? I ended up getting sick, and so then that's what kind of pushed us behind. I'm back to work again, so then it's just trying to get back cut up. Okay. Sometimes you can call them and do a renovate or rehab on the account, and the conversation would sound like this if you called the credit card company. Say, I'm three months behind.

Do you guys have a program that after I make two payments that you throw the third one into the balance and show me current from then on? Okay. And see if you can't get the account rehabbed. And probably in a couple of months you can get caught up with everybody doing that. I would rather you did that and then just pay off your balances. You're going to get there. This was not your normal rhythm of life.

It was when you got caught off guard by an illness. Correct. And didn't have an emergency fund, which you're going to build now once you get out of debt because you're doing our stuff, right? Yes, because we discovered you, yes. I love it. I appreciate it. I'm glad you're there.

Hold on. I'm going to send you a copy of the book, The Total Money Makeover, walk you exactly through step-by-step how to do this stuff. But, yeah, I think i generally say let's get current first now let's change the story for some of you that are listening let's say she's eight months behind and it's fifty thousand dollars in credit card debt and she makes 47 see you see how those numbers get just got bigger the amount she's behind is a lot more the amount she owes is a lot more in ratio to her income that's going to make that's going to be a long year just to get current then i'm probably

going to go ahead they're almost in default anyway i'm going to let them drop into default and settle them when they're that when it's that big a hole but um you know she's close enough and with her income and it's not the pattern of her life she's not someone who doesn't pay her bills usually she you know as an exception she got ill lost her job for lost work for a little while and so i think she's going to be fine don't you that's why you're listening me too aren't these folks inspiring i think they are this is is The Dave Ramsey Show. We'll be right back. Corey is with us in Kentucky. Hi, Corey. Welcome to the Dave Ramsey Show.

Hey, Dave. I want to congratulate you on the new building, and I also want to tell you that I really appreciate all the advice that you've given. Thank you. It's actually worth significantly more than I've paid. I love it. Well, thank you, sir. How can we help?

I'm a very big fan of yours. I've probably listened to every one of the shows for the past year now, and I've never really heard you mention, like, the average home growth. And I've looked it up online, and it's kind of all over the place, you know, how going online is. You get all kinds of information from a bunch of people that you don't know. And I was really wanting like a five-year plan on moving up in-house. My wife and I have had a couple kids in the past,

like a couple years since we bought a house, and I kind of want to know realistically, like, what would our home be worth in about five years because i would like for our next house us to not have private mortgage insurance good for you that's good planning and good thinking well as you found the problem is that it's it's a very diverse or dispersed uh answer depending on where you are it's the old joke of my my college professor when I went into my first real estate class. So there's three things that cause home value or cause real estate to have value, location, location, and location. And so home values are like politics. They're all local.

So it has everything to do with your town and for that matter, your subdivision within your town. So what I would do is real simple. Just holler at one of our endorsed local providers on the real estate side and just ask them over the phone or by email would you do me a favor i'm a big dave fan and i'm if i ever do move i'll be using one of his elps would you do me a favor and pull the mls the multiple listing statistics in my neighborhood or a five-mile radius of my neighborhood, and what have average home value increases for the past so many years. And they should be able to pull that depending on which service they're using, which MLS service they're using.

Most of the people probably in Kentucky are on RealTracks is one of the services. It's the one we use in Tennessee mostly. And if you just jump on there, it should have that number pretty available based on so many miles of a certain property. And that enables a realtor to say, hey, this neighborhood is appreciating more than that neighborhood, or that end of town is appreciating more than the other end of town. Because even within a given town, if you think about it, or a given city, there's areas of the town that are booming, and everybody's fighting in multiple offers,

and there's areas of the town you can't give some away. And so that affects values, obviously. So, no, there's not a magic number that just says this or that. The inflation rate for real estate in general is probably about like the inflation rate right now. It's probably around 5%. But I own real estate in the county that I live in, which is hot as a firecracker. And so it's gone up a lot more than 5% a year. As a matter of fact, I make more on my increases in value on my rentals

than I do the actual stinking rent in most cases because it's just this is one of those crazy markets where people have lost their minds and values are just shooting up. So it just depends. Yeah, that's something that I thought was, you know, pretty crazy is, like, just looking at the grand scheme of, like, how the market is. And the guy that actually turned me on to you, he is actually very, like, unrealistic with money as far as, like, most people.

He's a true Dave Ramsey guy. This guy is 27 years old, and he has saved up $130,000 cash to pay for a home. And what really blows my mind is that he found a home that's about 10 minutes from where he lives at, and he offered them $130,000, which is 100 of what their um home listing was and he told them that they can move out at their convenience and they declined his offer i'm like this is just unbelievable why did they have it for sale if they wouldn't take a full price offer i'm guessing people are doing the bidding wars oh well that

could be if they had multiple. If he had multiple offers, they would decline his offer. We all would, I guess. If he gave me more than full price and another guy's giving me full price, I'll take the more than full price offer. That's not hard to figure out. Yeah. What town are you in? What part of Kentucky? Lexington. Oh, yeah.

That's a beautiful market. It's a great city. Really, really pretty. Again, Lexington is a classic example of this. Obviously, there's some very wealthy people in Lexington. And the wealthy ends, you know, you tend to see this white-hot appreciation. But then sometimes people overbuild the market, and there's too much supply, and that just calms everything down or makes it go backward a little bit. So that's all you're looking for.

Just holler at a real estate agent, and for your five-year plan, they can help you do that. A good real estate agent can. And I think one of our ELPs will be happy to do that for you. It shouldn't take them a long time. This is not a five-day economic study. It's a four-minute exercise on their website. Abigail is next up, and Abigail is in Texas. Hi, Abigail. Welcome to the Dave Ramsey Show. Hi, Dave. I'm grateful to speak to you. You too. How can I help? Okay, so I own a

few rental properties, and I have mortgages on each of them. That's the only debt that I have. The total loan balances on them is $254,000. A year and a half ago, I got turned on to you and I started focusing on paying down the debt on those pretty intensely. And actually, in the last year, I paid off over $60,000 additional principal on them. Good for you. Thank you. But basically, I have almost no money in an IRA or invested anywhere else, and I'm wondering if I'm not diversified enough and if perhaps I should divert. I'm 50, so if perhaps I should divert $7,000 a year into an IRA. What do you make a year uh so uh work income and rent income sure like everything uh this year projected about 122k

good for you well done okay well and do you have any debt other than the rentals you said you didn't right i do not okay cool you own a home that you live in? I don't. I don't own a home. I got out of a relationship less than a year ago, and I had put all my money towards paying down my mortgage debt, so I did not have a down payment available, and I'm just grateful to be settled because I had moved a year and a half before that. So I'm not ready to own a home maybe in a couple years. Okay. But right now I'm renting.

No problem. You're doing great. How old are you? Did you say you're 50? I'm 50. 50. Okay, cool. Good for you. All right.

Well, I would walk you through what we call our baby steps. You're debt-free. If you have an emergency fund of three to six months of expenses, that's baby step three. I have that. Okay. Then that will bring us to baby step four, which is 15% of your income going into retirement planning. You're not doing that, and you need to.

And so that's about close to $20,000 a year for you going into retirement planning. You obviously have Roth IRAs available to you. You mentioned that at $7,000. Do you have any kind of retirement plan at work that you can invest into? I own my own business, so no, I don't have that. Then you've got all kinds of options with SEPs or solo 401Ks or simple 401Ks. There's all kinds of things you can do. And you pretty easily can get up to $20,000 then going in.

So just holler at one of our SmartVestor pros. Click SmartVestor at DaveRamsey.com. I'm not in the investment business, but they can help you. And, yeah, you need to be diverting some money into retirement. And then what's going to happen is instead of paying off $60 a year, if you stayed on exactly the same track, you're going to start paying off $40 a year because we're putting $20 into retirement. And $40 into $250 as your baby step six starts to be that you're going to be done with that in about six years.

Okay, great. And so, you know, give or take, you'll be out of debt in six years, houses and everything. Meanwhile, you will have put $120,000 and had the growth into getting your mutual funds started, getting your retirement started. Because I would love to see you, you know, when you're 65, here's your goal, okay? Big pile of money in retirement and mutual funds, paid for rentals, paid for home. That sounds like a sweet plan to me, doesn't it? Mm-hmm. That's where you're going.

That's where you ought to go. Follow the baby steps. That's where you'll be. Hey, thanks for the call. We appreciate you joining us. This is the Dave Ramsey Show. We'll be right back. Aaron is with us in Michigan. Hi, Aaron. Welcome to the Dave Ramsey Show. Hey, Dave. How's it going? Better than I deserve, man. What's up?

I've got a question. Me and my wife are first-time homebuyers. We're going through that process right now. We found a condo here in downtown Detroit. Went through the inspection, went through calling for mortgages and all that. Went to go get the financials from the HOA, and I'm concerned that their reserve fund is too low, but I also don't know anything about reserve funds other than that they cover

the responsibilities of the HOA. So I'm wondering if I can get your advice on this. How expensive is the condo? The condo is $220,000, and the HOA fee is $225 a month. And how much do they have in reserves? They only have $110,000. And do they have those earmarked? Parking lot, roof, stuff like that?

From their budget, it does not look like that they pull in about 170 000 a year in income and it looks like they spend all of that but it's not earmarked for savings okay so it's not being run well because they should be putting into reserves every year right and their the reserves that they actually put in is only about 7% or 8% of their annual income. So it's about $14,000. Well, if they have enough in reserves for potential repairs, that's okay, but they need to be systematically building it. And so is there a management company managing the HOA? There is, and I've asked my realtor to reach out to them to see if they've done a reserve study

to see if they are planning future stuff. I know from our inspection that they said the roof is going to need to be replaced in about three to five years. Yeah, and how many units are there? Will $100,000 cover that? There's about 45 units, and they're split into four to six unit sections. $100,000 will not cover that. Okay. So, you know, what's your plan to put a roof on management company

given that you don't have the money? Because otherwise they're going to come up and special assess every one of these units. Right. They're going to put a special assessment on you to keep the roof from leaking and rotting all the units down. And so if they do nothing and this is a $200,000 or a $400,000 bill, that other $300,000 is going to be special assessed across those 45 units. Okay.

And when that happens, the value of the condo is going to go down. Right. Because anyone looking to list one, if I'm getting ready to buy a condo there and part of me buying it is I get to write an extra $15,000 check this year, I'm not going to be real excited about paying full price for that condo, right? Right. So that's what not having reserves does. Plus, not having reserves does not keep the property maintained. Both of these things cause the property to go down in value.

So I want to hear what their plan is if they have one. And the truth is, sadly, everybody's goal is to have low HOA fees instead of taking care of their stinking properties. And that's what you get into because everybody's like, I don't want the HOA fee going up. I don't want the grass cut. I don't want a new like, I don't want the HOA fee going up. I don't want the grass cut. I don't want a new roof. I don't want a new parking lot. I'd rather just live in a dump.

And so that's what you're saying when you say we're never going to increase the HOA fees and we're not going to have the HOA fees large enough to cover the things that the HOA is responsible for. So it just gets you into a mess. I don't know. I can't tell. This is not horrible, but it doesn't sound healthy. Does that make sense? Okay.

Right. So I'm with you. I think you just keep digging in, and I'm going to learn a lot more before I move forward on this particular purchase. Now, if you're buying at $30,000 under market or something and you want to go ahead, you're probably okay doing that. But if you're paying full appraisal for it, I'm going to want to know how they're going to cover this roof need. And, you know, look at the parking lot. Those are the two big ones that get you.

Roofs and parking lots get you with condos. Unless they've got, like, a bunch of amenities like pool and clubhouse and stuff that are expensive to maintain or that kind of thing. But most of the time in a typical condo project, especially one like this is small, it's only 45 units, it's going to be roof and parking lot that bites you in the butt. Apollo is with us in California. Hey, Apollo, welcome to Dave Ramsey's show. Well, thank you, thank you. How are you doing?

Better than I deserve. What's up? So, calling with a question about my truck. I have a truck, and I want to know if you think I should sell it. Given my unique financial situation with my wife, we're walking through the baby steps right now, and they're a little out of order because of our situation. Yeah, well, then they wouldn't be baby steps if you're walking them out of order. Okay, so how much debt do you have, not counting your house?

Well, we don't have any debt on the house, but I have $47,000 in student loans, and the truck has $23,000 on it. Okay, and what's your household income? Just over $120,000 a year. Okay, cool. Do you have any money in savings that's not retirement? Yeah, about $120,000 a year. Okay, cool. Do you have any money in savings that's not retirement? Yeah, about $86,000. So why would you not write a check today and be debt-free?

Just the way that we handle our finances together. That money came with her, and we're on a plan of how we kind of try to decide what to do with it together, but the truck was really my decision to get, and I feel responsible for making sure it gets paid off myself. That all went away when you walked down the aisle, dude. This ain't your freaking roommate. This is your wife. For better or for worse, in sickness and sickness and health when she's sick you're going to bring her chicken soup and the old the old wedding vows say for better for worse and

sickness and health and unto thee all my worldly goods i pledge and so when you get her you get all of her goods and all of her debt when she gets you she gets all of her goods and all of her debt and you don't get to buy any more freaking trucks without first talking to your wife her goods and all of her debt when she gets you she gets all of her goods and all of her debt and you don't get to buy any more freaking trucks without first talking to your wife not if you want not if you want a quality relationship i definitely talked to her about buying a truck before i got it yeah but she wasn't in on it she just went along with it because she was treating you like a roommate not a husband whatever. Whatever you want to do, honey. Is that what it sounded like?

With an eye roll? Like this is a dumb idea, but you're an idiot, but I'm going to go along with it. You can afford it and afford the payments. Yeah, you can afford it like you're my roommate. You see what I'm talking about? See, and now you are one. All the millionaire data that we have, all the millionaires that we've studied, the people that we see succeed with money,

almost none of them handle money as a couple the way you are. They handle money instead as a singular unit, and they make decisions together. They respect each other. They trust each other. They have fully combined integrated finances. All right. So that's what you've got to do.

And then we're going to pay off this stuff or we're going to sell a truck if we don't pay it off we gotta sell it you can afford the truck you have eighty thousand dollars in the bank it's less than half your annual income it's not completely ridiculous it's not the dumbest thing i've ever seen in my life i've seen a lot of dumb things but um you know it's just a guy with a truck payment and he didn't talk to his wife first i did this crap all the time, man. My wife is a classic Southern belle. We got married.

She would roll her eyes and say, whatever you want to do, honey, whatever you want to do, honey, which is Southern belle code for you're an idiot, but I'm going to stand here and watch you hurt yourself, forgetting that I'm connected to you, and I'm going to get hurt when you get hurt. And that's how we started our lives. We about killed each other, man. I tried what you you're doing it about destroyed me when i was a young man and i found out later that she's actually got a lot of wisdom when it comes to money too and so i'm i'm smarter when i listen to her and so uh yeah you guys combine your decision making you combine your process you're unified and if you sit down and have that discussion instead of saying well well, the way we handle money, I mean, you can handle money wrong if you want.

That's the way you handle money. You're grownups. You're allowed to do that. But if you sit down together and you have this discussion and say, you know what? I talked to this guy. He was a bit crazy, but he was convincing. I think we ought to talk about combining our assets, our liabilities, and all our decision-making from this point forward. We're going to start doing a budget together with all of our income, not your income, my income,

not you can afford it, we can afford it. We are investing. We are going on vacation. We are being generous to our church and our community. We have a plan. We are going to live like no one else, so later we can live like no one else, all that kind of stuff. You just change your pronouns when you get married you're french it's we we and so that's the whole thing so once you get that discussion over with then you go okay

what do you want to do with the truck because we got to pay off student loans today you want to sell the truck or you want to keep it i'd like to keep it i think we can handle it and i think without any truck payments or student loan payments if we're on a budget that two of us working together we can rebuild this account very quickly think without any truck payments or student loan payments, if we're on a budget the two of us working together, we can rebuild this account very quickly. And that's what I would do if I were in your shoes. I'd pay both of them off and rebuild the account working on a budget together. Hold on, I'm going to

send you a copy of the Total Money Makeover book. You're going to need it. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. Once again, you made the Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.