The Ramsey Show - App - How Do I Enjoy Money While Focusing on Financial Goals? (Hour 3)

Episode Date: October 7, 2020

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Music Music 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. A paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us, America. Open phones at 888-825-5225. That's 888-825-5225. My co-host today here on the air, Ramsey personality,

number one best-selling author, Chris Hogan. John is with us in Atlanta, Georgia, to start off this hour. Hey, John, welcome to the Dave Ramsey Show. Hey, John. Hey, Chris, how you doing? Great, man. How can we help? So I have a little bit of this.

I'm trying to figure this out mentally as well as mathematically. I'm in my mid-30s. I have about $204,000 in my retirement. Not as much as I want or should have, but that's what I have right now. My base salary is $119,000 with a bonus. It goes up to $138,000. And with my last batch of restricted stock units, looking at about $150,000 next year, God willing, of course. Good. So the situation that I'm in is I really want to pay off the house that I'm living in.

I'm currently going through a refinance right now from a 30-year FHA to a 15-year conventional. And I want to be completely debt-free in the next three to four years, preferably three. But I'm just trying to find a balance between doing retirement, enjoying some of the money that I'm also making, but likewise paying off the house within that three to four year goal that I have. What did you say the house balance was? Oh, sorry. The house balance is $139,000, and with the refinance, then rolling in the closing costs, it comes up to $146,000.

Okay. So that's $146,000. Okay. John, what's motivating you to attack and pay off everything in the next three to four years? To be honest, this whole COVID situation and also just the general craziness with the economy. I mean, it's like mixed pockets of positives and negatives. I would just sleep better and have peace of mind if I have nothing and owe nobody nothing, basically. Okay.

Do you currently owe anyone anything else outside of this house? So I paid off all of my consumer debts. I did $75,000 in 17 months about two years ago with the help of FPU. Wow. Okay. And no other debts right now? Nothing. Zero.

You have children? No children. Okay. All right and did you and you said you're married right i'm single oh okay all right well you don't have to talk anybody into how far you want to sacrifice you can just decide that yeah so you can decide how much of your life you want to give up uh the only variables in our formula are fixed in your situation are you've done a great job. You're in baby step four, 15% of your income going into retirement. And then the only two things fighting for the rest of the money is mortgage reduction versus lifestyle. And you can decide that. I don't care. You can be as weird as you want to be.

But John, I would rather you tap in on the internal and find that motivation not based on anything that's going on in the world um you're going to be more consistent in your value system and the thing that's driving you as opposed to what's happening out and how crazy the world is going to get okay if. If we cash through, how restricted are the restricted stock options? They vest every few months. Okay. So you can roll those into cash then. Okay.

So basically we have $150,000 household income if everything's going like you planned, and you're putting 15% away into retirement. You have your emergency fund in place. You don't have any other bills. And so if I'm you what i'm gonna do is i'm gonna sit out sit down and run out three scenarios i'm gonna say if i spend if i pay off the house in three years that's fifty thousand dollars a year for three years right okay and out of my income that's 40 um that's uh forty three hundred dollars a month or whatever comes out forty two hundred dollars a month and um then i'm gonna uh uh say all right if i do that

i've got that in my budget that leaves me x for lifestyle for fun then run the same thing out if you'd paid off the house in four years, five years, maybe even six years. Maybe do three and five and six, or three, five, and seven. And just look and say, okay, seven I get this much fun, three I get this much fun, which is less, obviously. And look at that and go, okay. Now here's the neat thing. None of this is a contract.

So let's say you said, all right, I'm going for the three-year plan, almost no fun, and you do one year of that and you go, well, this sucks. I think I'm going for a little more fun and a new three-year plan. That's right. Yep. You can adjust it if you want. It's your money and you're killing it you're doing a great job buddy i mean you really are thank you and you need to hear that and did

but you need to believe it but what my point is this for all you guys listening in for john it is sometimes when i take these philosophies that are in my mind it's like oh i gotta i gotta have no life so i can pay it off in three years but when you actually run the math out 150 000 minus 50 000 for paying off the house in three years minus 15 you're a single guy there's probably some pretty decent money left in there yeah you're probably gonna be like okay that doesn't sound like that big a strain but you haven't really put money to it you've just got it in your head math to it you've just got in your head like this is going to be hard. That's true.

And, Dave, we're not even accounting for the fact that his income is going to go up. Probably. You know, over the next three years. So, again, John, you find that internal motivation. I love the three-number scenarios of you figuring out, hey, what makes sense for you? And the good thing is you can make the decision. And remake it. And change your

mind if you want to you preserve that right because everything you're doing is in the smart column so you're not going to move outside the smart column with any of these things good stuff our question today comes from blinds.com 100 satisfaction guarantee means even if you mismeasure if you pick the wrong color, they will replace everything for free. That's a pretty good guarantee. You get free samples, free shipping, new promos all the time, save even more, use the promo code Ramsey. Chris, our question.

Yes. Today's question comes from Becky in Kentucky. She says, I just started a job with a public university and have a 403B with them. I wanted to roll over my simple IRA from my former job into it, but was told the rules of the 403b do not allow outside contributions to be rolled into it. What should I do with my simple IRA from my former job? Well, looking at this, I mean, obviously you, you will have a, um, a two year waiting period, uh period before you can roll it anywhere into an eligible retirement plan. Why?

What do you mean? With the simple IRA? Yeah, you can roll that. You have to wait two years, don't you? I thought there was a hold. I'm not aware of one. Okay. I could be wrong.

You might be right. I might be wrong. I don't know what I'm talking about. I think you can do it immediately. Okay. But not all the retirement plans allow outside funds to come in. And you don't want them to go in there anyway. Yeah, because you're going to have better options outside of that.

Right. We always recommend a direct transfer rollover from your old retirement accounts when you leave into an individual, an IRA. Right. Not to the new jobs place. So even if they would have let you put it in there, we would have told you not to do it. And so get with a smart investor pro. Find out if Chris is right or I'm right, if it in there, we would have told you not to do it. And so get with the SmartVestor Pro. Find out if Chris is right or I'm right, if there's a two-year hold or not. Don't double-check it.

But either way, go ahead and roll it as quickly as you can with a direct transfer rollover. This is the Dave Ramsey Show. Thank you. of meeting health care costs, whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up. They could have faced a huge financial setback. But thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually support each other. CHM is the longest serving health cost sharing ministry and is a Better Business Bureau

accredited charity. It's Christians helping other Christians, and it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. so i don't really want to tell you guys this but some of the questions you ask us you could google them oh that makes me feel unimportant right there i I'm just saying I'm not necessary. You're not necessary, Hogan. Nope. Not at all. This is scary.

It is. It is. Okay. Becky asked us a question, a Blinds.com question. Going into the break, Hogan and I are arguing about who's right. So during the break, we Googled it. So make sure you don't need an expert when you have Google. And you can't even have a good argument because you can find the answer.

Right? So you can't just... We used to have these family arguments over the last days oh yeah because you couldn't have you didn't have a verdict there was no way to get a verdict but you get a verdict with your cell phone in five seconds so anyway all right so here's the deal the lady has a simple ira which is basically a 401k with a small business is what it is okay and she wanted to roll it to her new companies, her new public universities, 403B. That 403B did not allow it. But if they had, we would have told her not to do it anyway.

Always roll your old place's retirement into an individual IRA. Right. And you get with your SmartVestor Pro into a direct transfer rollover. So that's standard Ramsey advice that Hogan and I would both give. Hogan pipes up and goes, she's got to wait two years anyway. And I'm like, two years? I never heard of two years. Is there a two-year waiting period on the simple IRA from the time you leave your employer?

The answer is no, there's not a waiting period. So I was sort of right, but there is a two-year thing. Right, from the time that it has to at least be open for two years so we don't know how long becky worked at her didn't tell us but if she worked there three years right she can roll over immediately absolutely but if she's worked there one year or are they opened it one year ago then leave it alone it's gonna be a year sitting there right then roll it which it's in her name anyway it's okay because it's a simple ira so uh it's a very uh the simple ira works exactly like a 401k for your small business people you

can open it up for your employees uh you have a mandatory three percent match and uh it's very inexpensive like the 401k at ramsey with 1,000 employees, 900-something employees, I mean, I pay tens of thousands of dollars a year in administrative cost on that 401K. But for a small business with 20 or 30 team members or two team members or whatever, the administrative cost on a simple IRA is $15. Okay, so it doesn't, from an employer standpoint, you do have the mandatory 3% match. I do not have a mandatory match. I'm matching it in more than 3%, but I don't have to by law.

But with a simple, you have to have a 3% match, but it costs you otherwise almost nothing to manage the thing. It's called a simple IRA code for 401k for small business. Talk to one of our SmartVestor pros, and you can get one open for your team. Yep. But once it's been open two years with that individual, then they can roll it anytime they want. There's not a two-year waiting period from the time you leave. It's from the time it was opened. Yes, sir.

So you were sort of right. Yep. But you were, too. I was sort of right. That's right. Google straightened the whole dadgum mess out. There you go. We're useless.

All right. James is in San Antonio. Hi, James. Google straightened the whole dadgum mess out. There you go. We're useless. All right. James is in San Antonio. Hi, James. Welcome to the Dave Ramsey Show. Hello, sir. How are you doing? Great, man. How can we help?

Okay. Here's the situation. I took an early buyout at my job. They gave me $50,000. Okay. Long story short, I paid everything except for my house. I only owe $38,000. Okay. Long story short, I paid everything except for my house. I only owe $38,000 on my house. Of that extra money, I have $20,000 left in checking or savings.

And $125,000, I rolled it over with Fidelity. And they're working my money for 1%. And I won't get my retirement until I'm 65, I believe. That's what they're telling me because I'm fully vested with my pension. I'm trying to find out what's the next step for me. You got a new job? Not yet, sir. Okay, you hold that $20,000 until you get a new job, because you're in the middle of a mess.

Other than the fact you've cleaned up a lot of mess, way to go. Every step you've made was a good step, but you might need this $20,000 to buy bread and bologna until you get a job yes sir okay okay he might not buy bologna no dave he's not buying i might buy bologna but the red onion and a fresh tomato but james listen dave's describing conserve mode okay and so the pension might be to think of this money as just bonus and extra. No, no, no. This is money for you to live on.

So you are going to be extremely intentional with every dime until you have more money coming in on a consistent income. In other words, when you get your job, we're going to take the $20,000 and apply it to wherever you are on the baby steps. So you're going to finish your emergency fund. You're going to get your retirement going. You're going to take the 20 000 and apply it to wherever you are on the baby steps so you're going to finish your emergency fund you're going to get your retirement going you're going to start talking about kids college and we're going to reach over and start paying off the house with any of the money left beyond that but today you hold on to this money until you get this new career that's right in place following your buyout you might use some of this 20 for some education if you want to get some certifications or something to go into to retool put some tools in your belt to move to the next career yeah good job james we need all that 20 there uh to make the

transition into the new career when the new career is settled and the money's coming in then you apply it the rest of the way down the baby steps okay and hold on and let's clarify this for the people out there again conserve mode if your income or hours have been cut, you are holding on to every dollar that's coming in, being very smart. Once that income is stabilized, you're going to unpause and whatever baby step you were on, the money that's sitting over in savings, over and above the $1,000, you're now going to move it in the baby steps exactly where you are. In his case, he's paid off all his debt.

Yeah, he's done it. I'm just talking about the people out there, Dave, that are just sitting. You don't need $20,000 sitting in your baby step one fund. No, you've still got debt. You're going to unpause when your income gets stabilized and start attacking that debt

just like you were before. John is in Chicago. Hey, John, welcome to the Dave Ramsey Show. Hello, thanks for calling, guys. Sure, what's up? I'm in the process of trying to determine... Your phone's cut now. Your phone's cut now.

Can you get where we can hear you? Yeah, let me move real quick. Okay. I'm getting about every third word. Oh, let me move over here. Okay, is this any better for you? Yes, sir. Yes, sir. Okay, your question is what?

Yes, I'm looking to make a decision on whether I should move forward and purchase my retirement home now because the market I'm looking at is, it goes up, it like almost triples in value about every three to four years. My current situation is I'm retiring in nine and a half years. I have a defined benefit pension that I'll receive in nine years. I also fund a Roth IRA and some other investments myself. Is your current residence paid for? It is. Okay.

How much money do you have to put on this retirement home? Are you going to pay cash for it? No, I'm going to put the 20% down, and I would take a mortgage on the other part. I wouldn't. I'd either pay cash or I'd wait until I was ready to retire. Because when I do retire, my plan is to pay cash, but the market is...

Yeah, maybe. Where are you talking about buying? It's so dadgum wonderful. Those are some ridiculous numbers. It's in Hawaii, actually. I've been there multiple times, and it's the place I look to retire. Yeah, which island? I'm looking at the Big Island, actually.

It's the place I like the most. Yeah, it's beautiful. When I look at real estate... I'll disagree. I will agree with you then. Yeah, the Big Island, actually. It's the place I like the most. Yeah, it's beautiful. When I look at real estate now. I disagree. I will agree with you then. Yeah, the market's absolutely outrageous. And I don't know what we're doing. You know, they say they're not making any more real estate.

Actually, the Big Island is. It's adding real estate pretty regularly. But it just has to cool off before you can live on it. But, gosh, I empathize and I don't disagree with your – I thought you were full of it, but you're right. The prices are going to continue to go through the roof there unless the political climate begins to destroy the economy, which it may. I don't know. Some of these areas are going to be affected by the political fallout from COVID more than they are by actual COVID. So I don't know why he's one of those that says that that's possible. It could be another California or another New York.

Dad, come, man. It's beautiful. I've got to tell you. As far as my debt, I don't have any debt. Yeah. I do save well over $20,000. How much is this property going to cost? I'm looking in the range of about $350,000 with me putting 20% down.

How much do you have? Do you not have $350,000 that you can get your hands on? No, not the $350,000. I'm going to put 20% of that. I know. Do you have the money, though, other than that? I do. Well, then pay cash for it and quit calling me about this.

Oh, this is the Dave Ramsey Personality, Chris Hogan is my co-host today here on the air. Colton is with us in Evansville, Indiana. Colton, I see on my screen you're debt-free. That is correct, Dave. Thanks for having me on. Absolutely. Congratulations, man. How much you paid off? I paid off $41,000 in 16 months. Good for you. And your range of income during that time? Making around $60,000. Okay. What kind of debt was the $41,000 in 16 months. Good for you. And your range of income during that time? Making around $60,000.

Okay. What kind of debt was the 41K? All student loans. Ah. Ooh. What's your degree in? Computer information systems. Good degree.

Good, good. Okay. So you're out of school maybe 16 months ago? Yep, exactly right. Yep. Actually, about three years ago, I was a junior in college and looked and saw how much I was going to owe. And I think I just realized that at that point I was going to have to pay that back. And I was on YouTube, and I think I saw some Dave Ramsey top ten rants and then looked at those and I think about over half of them that

you were talking right to me so that's what got me listening to your podcast every day and then that's what got me on board Colton I want to know though because Dave loves to rant and you know this you've seen him he is not scared to step on toes and feelings why did you hear the message like what was it about it that made it feel like he was talking directly to you? Well, just the things that he was mentioning. I know going through school that he just, I think about every other rant or call, it was people just so heavily in student loan debt. And it kind of scared me a little bit and realized, you know, I mean, I don't want to be

paying it off until I was you know 40 or 50 years old and let it control me so that's what made me want to knock it out quick good for you man okay so you dove in start watching some debt-free screams and what else did you do well I was working a part-time job just through college just to help me you know pay the bills and buy gas and things and then once i got a full-time job after graduation i continued doing that it was kind of like my side hustle um so i just really didn't even touch that money it went right to the debt the entire time okay so you kind of kept living like a college student yeah exactly yep yeah and just tear into it. Well, congratulations. Who were your biggest cheerleaders?

I had a lot of cheerleaders, definitely my mom and dad. My girlfriend, Rachel, we actually started Financial Peace at the beginning of this year. And with this year happening, we had seven weeks into it, and COVID kind of canceled it. So we finished it online so that was kind of a crazy thing and then um definitely my friends as well uh ej dustin and blake were really pushing me the whole way and um you know i really didn't have too many uh naysayers they all just uh kept encouraging me and helped me out a lot. Yeah, so you've got a good, solid peer group. Yeah, you do. That's awesome. Yes, you do. Very cool.

Very cool. All right. So there's a college junior out there listening to us right now in his dorm room. Well, probably not in his dorm room, but he could be. There's a college junior out there listening somewhere. What's your message for him? I would say definitely be content with what you do have. And once you do graduate, if you have debt, just pay it off as quickly as possible. Because now, I mean, I'm not even two years out of graduation and I'm debt free. And I feel like, you know,

I'm definitely just set myself up for success. Absolutely. Without a shadow of a doubt, in the middle of this crazy pandemic, Colton, you went against the norm, made the sacrifices, and stayed focused, my friend, and deleted the student loan debt out of your life. I am very proud of you, young man. Yeah, way to go, man. Seriously. Navi and Sally Mae, they are in your past for sure, no question about it.

Gone. Very, very well done. All right, Colton, we got a copy of Chris Hogan's book for you, Everyday Millionaires. That's certainly the next chapter in your story, young man. Proud of you. Very, very well done. You're a rock star.

All right, count it down. $41,000 paid off in 16 months, making $60,000 a year. Count it down. Let's hear your debt-free scream. Three, two, one. I'm debt-free. Yeah! Woo-hoo-hoo-hoo-hoo!

Great job. Very well done, sir. Very well done, sir. Very well done. All right, if you're out there listening to Chris and me right now and you heard Colton do that, I want you to think with me for just a second. What would it be like to have no payments? No MasterCard.

No American Distress. You haven't discovered bondage. Didn't trade your freedom for some airline miles. Sally Mae no longer has her own bedroom in your house. We put the old woman on the street. She's ugly. Work and everything. You don't have a car payment?

I mean, let's get crazy here. Think with me what it would be like to have not even a house payment. What if you had no payments? Chris, you know what they would have? They'd have money. Because you wouldn't be giving it all to some stupid organization that is taking your hard work and turning it into their wealth you're going to have money you're going to have options you're going to have opportunities to step in and to help single moms wounded veterans people that

matter to you charities that matter that's what you'd have you'd have an opportunity to not just be a blessing but to be a part of some 12 months ago most people couldn't spell matter that's what you'd have you'd have an opportunity to not just be a blessing but to be a part of some 12 months ago most people couldn't spell pandemic that's right now a pandemic has come and basically gone it's kind of old news some of you hadn't got the memo but it's kind of old news and what would have been like to go through that without any payments? I can tell you from experience, Chris can tell you from experience, it's a pretty stinking pool. Small hiccup in the overall grand scheme of things.

Yeah, I mean, I was not in danger. I had some concerns and stresses about whether we're going to get to keep our entire payroll, whether this company was going to have some dings or not. But Dave and Sharon Ramsey were not going to lose their home. Right. Because they don't foreclose on homes that don't have mortgages. We were not going to get sued by some stupid butt organization like we did when we were in our 20s because I was stupid because I couldn't pay the bill. So that's where we're going to take you guys in Ramsey Plus.

One membership that coaches you step-by-step through all of our best products, of course through Financial Peace University, the premium version of the world's best budgeting app, EveryDollar, and our new Baby Steps tracking app, so you get to judge how you're doing. And you've got to judge how you're doing. See, getting out of debt and doing the debt-free scream is the first big milestone. But within that milestone, there's a bunch of little ones. That's right. Because you look over here, I paid that one off, and, I paid that one off and I paid that one off and I paid that one off and I paid that

one off and I paid that one off. And it, you know, I made this, when you see traction and progress in something you're doing for behavior change, you keep at it and it changes everything. It really does. And so here's the beauty of it. Not only are you getting the information and the tracking, you're getting community. You are getting plugged in with other like-minded people that are encouraging you through this journey. And here's the other thing, Dave, that I love. Having trained these financial coaches that are all across the country, as a member inside of Ramsey Plus, you get an opportunity to have a phone call with a financial coach about your situation. So it's like working with a personal trainer on your money. You get a chance to have that interaction being a part of Ramsey Plus. You get all kinds of other benefits, like the Smart Conference coming up November 7th. It'll be free for a Ramsey Plus member. Free.

Real loud, say that. Yeah, just free. Yeah. Start your free trial to Ramsey Plus right now. Go to DaveRamsey.com slash FPU. DaveRamsey.com slash FPU, and you can start a free trial to Ramsey Plus. This is the Dave Ramsey Show. Thank you. Our scripture of the day, Luke 638, Give, and it will be given to you.

A good measure, pressed down, shaken together, and running over, it will be poured into your lap. For with the measure you use, it will be measured to you. Eric Fromm said, not he who has much is rich, but he who gives much. Chris Hogan, Ramsey Personality, is my co-host today here on the air. This is the Dave Ramsey Show. Maurice is in Atlanta. Hi, Maurice.

How are you? I'm doing fine, Dave. How are you and Chris doing Atlanta. Hi, Maurice. How are you? I'm doing fine, Dave. How are you and Chris doing today? Great, man. How can we help? Dave, I've got a two-part question, if I could. I have a question today about buying down your interest rate or points. Is that a good idea or bad idea, as well as having a pay-for-home,

whether to sell it or to rent it out. Okay. A paid-for house, why would you sell a paid-for house? No, whether to rent the home out or either to sell the home. Do you want to be a landlord or do you want the money? Good question. I mean, that's up to you. You're talking about the home you're living in is paid for you're going to move to another house yes but i purchased in another home

oh then i would sell it and use the money to purchase the next home because otherwise effectively you've borrowed the money for a rental property on your new house and i wouldn't do that okay so because that's the mortgage part of the equation too now it's coming to me okay so here's how points work all right roughly one point or one point is one percentage point of the borrowed amount so if you're borrowing two hundred thousand dollars one point is two thousand dollars that will reduce your interest rate your apr by anywhere from one-eighth to one quarter in today's market more like one-eighth okay and so if you had a three and an eight and you paid one point you could buy it down to around a three does that make sense yes it does, do this with me, okay? If you are getting one-eighth of a percent savings per year as the payback of one percent, would it make sense to you that it takes eight years for that to break even?

Yes, it does. One-eighth times eight is a whole, okay? Eight-eighths is a whole, is 1%. And so an eight-year break-even period on an interest rate you would not do because the average home mortgage is paid off every 5.6 years, and the average home sells every 7.1 years in America. Okay, and so you're not going to be there long enough to even break even. And even if you were,

eight years to get your freaking money back in a financial transaction is cray-cray. Now, let's pretend that we did the math, because you're going to get a quote from these guys. You get a quote from Churchill Mortgage, right? And they come back and they say, okay, 1 one percent is going to reduce one percent point is going to reduce your interest rate by a quarter now let's do the

same formula it takes four years to get your money back if you go from three and a quarter to three by paying one point that's a much better deal obviously that one you might do but you for sure don't do the other one you don't want to wait for sure don't do the other one. You don't want to wait more than four years to get your money back on these things. So the first four years, you didn't make any profit, any headway. You're in the hole until you get up to break even, and it's after four years or after eight years in these two examples that you get gravy on the biscuit mathematically. Does that make sense? Yes, it does. So overall, that you get gravy on the biscuit mathematically. Does that make sense?

Yes, it does. So overall, when you run this calculation, I think you're going to find, I find about nine out of ten times the answer to your question is, do I use points to buy down the interest rate? The answer is usually no. Yeah. Maurice, how much do you have in the bank? How much money do you have in the bank right now?

I actually have around $10,000. Okay. Because typically what would happen is if you're dealing with a mortgage company, when they start leading with buying down, it's because they're seeing the money you've put on your financial statement, that you have some money sitting aside. And if they're typically leading with the buy down, it means primarily that their

interest rate is not as competitive as it needs to be. So I just encourage you to start with Churchill. Really take a look at that, but be smart about what you're doing as you're moving forward. Yeah, that's really, really good. Yeah. All right. Open phones at 888-825-5225. Lee is with us in Huntsville, Alabama. Hi, Lee. How are you? I'm good. How are you, Dave?

Better than I deserve. How can we help? So my husband and I are trying to get out of our current car loan, which we know is our dumbest purchase to this point. So we just had a circumstance that's changed over the last year and a half, and we know that we need to get rid of this loan. However, I've spoken about getting a private loan, which I know is what you recommend to pay the difference for when we sell it.

The loan that I, the subprime interest loan, because neither of us have great credit, is 35 percent for ten thousand dollars for how much how many dollars ten thousand dollars holy crap what's your household income i make 70 a year my husband is currently has this we have a circumstance we need a parent at home at all times with our daughter. So I do make $70,000. We owe $33,000 on the car. Who said you're 10 upside down? So that is what we've looked at different places to buy the car back from us. Yeah, that's a wholesale buy, I thought. Okay.

You need to go to kellybluebook.com and look at a private sale where you put the car up for sale to a private individual. You'll make an extra $5,000 on this transaction. Okay. See, a dealer needs to buy a car at wholesale or below in order to put it on the market at retail to make a profit. Right. So they're not evil, but they're bottom dollaring you because they have to in order to make a profit and so you know and right now every one of these dollars is precious particularly if we start talking about a 35 interest rate so uh who is the loan with on this debacle

it's ally financial who i've dealt with today um and of course they have your current loan they do have and they're the ones offering you the 35 percent no this was with a different yeah a different ripoff company so what did ally has allied quoted you on financing your deficit um i talked to them about that today and they said that the only option they have for us would be a voluntary repossession. No, that's not an option. On the balance. That's not an option. No, because they're going to get it and then go sell the car for $3,000 and then come at you for the difference.

For $33,000. Right. It might not be $3,000, but they're going to destroy you. It's so ridiculous. It really is. Lee, real quick, you all didn't roll over any other prior loan inside of this new loan did you no okay all right so this car is not a $23,000 car this is a $26,000 or $28,000 car okay and so number one we got to look at a private sale so now we're talking about

a $5,000 problem instead of a $10,000 problem give or take I might be a little off but I'm not far off and then you need to keep shopping because you haven't found anybody that isn't trying to screw you yet. 35%. Okay. Yeah. So do you have a local credit union? We do.

Have you tried them? I have not tried them yet. And listen, don't call them on the phone. If they're open and taking customers, where are you? They might be open. If they're open and seeing like human-to-human interaction and all, go sit down in person, show them what you're doing and that you're moving. This is not just a loan to go on vacation or something.

This is a loan to clean. We're reducing our household debt from 33 to 6 by doing this or whatever the number is, right? And so I just need a small personal loan. And then I'm making 70, and we're going to get it paid off really fast. You know that because we're already paying a $33,000 car payment. Yep. And they may require that you put $500 in and start a checking account, and it's sitting there.

But I love Dave's advice of you going in because now you become a human with a story and a process and a plan. And, Leah, I tell you, that can go well for you. Yeah, because I can't imagine the guy offering you 35% did that in person. No, he didn't. No. No, that was over the phone or email. That was over the phone, I know. It'd be hard to look somebody in the eye.

Say 35%. I wanted to put my hands up in the air when she said it. Wait, he's wearing a mask. Oh, wait, everybody is. Oh, my gosh. Oh, I love it. This is just too fun. Chris Hogan, good job today.

Thank you, sir. Good job team in the booth. You guys killed it as always. I am Dave Ramsey, your host. 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 a friend or family member that needs a daily dose of Ramsey advice in their life?

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