The Ramsey Show - App - How Do I Get My Name off a Co-Signed Loan? (Hour 1)

Episode Date: January 8, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from their dollar car rental studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm John Deloney here with my good friend, best-selling author, number one YouTube star, the one and only Mr. Anthony O'Neill. We're taking your calls on life, on money, helping you with anything

that's going on in your heart, in your home, in your pocketbook. Anthony, how are we doing this today? I need to cut on the mic. There we go. This is my first time on the show since the New Year's, and I forgot how to cut on the mic. All right. Not cut on, turn on the show since the new years and i forgot how to cut on the mic all right not cut on turn on the mic uh gotta work on my grammar i like cut on hey man listen i gotta get better um i'm doing well man you know it's a beautiful beautiful time to just really reset refocus and to get it going man so i'm excited just to be doing what i do with you

all and with dave and so i'm excited to help some people out today. Very cool. All right, let's go out to Tyson in Chicago, Illinois. Tyson, how are we doing? I'm doing pretty good. How are you guys? Outstanding. Good man.

How can we help? So I am 15, and I've been mowing lawns since I was 12. I am looking to take my small business to the next level. I have found two of my friends who are interested in partnering with me, and we would mow about three areas across a 20-mile area, and I'm wondering what we should do. Do we need to file for an LLC? What should we do with our taxes? Stuff like that. Oh, man, that's a great question, Tyson. Have you purchased my Teen Entrepreneur Toolbox Kit? I haven't. Okay, yeah. I'm going to send you one.

I want you to stay on the line. When we get done talking with you, Kelly will get you one because you're asking a lot of great questions. No, I do not want you to get an LLC, okay? I want you to do a DBA, okay? And I'm going to walk you through exactly how to do that because I want you to do a DBA. Okay. And I'm going to walk you through exactly how to do that because I want you to avoid fees. And really when it comes to teen entrepreneurship, it's really about learning the mindset of the entrepreneur while also doing the work and

while also being legal. So I'm going to show you how to do all three of those things. But here's one thing I want to caution you with. You're going into business with three friends. What I want you to do is really focus on just how do you do it yourself, one, and maybe another friend. But now this is three friends, three different families, and I like how you're dreaming, you're expanding already. But I would really want to encourage you to start off yourself, maybe within a 10-mile radius, maybe pick up 10 clients, figure things out for yourself as a business, then bring in friends once you really know how to do it. But I love the way you're thinking already, man. How many clients do you have already, Tyson? So I have about four that I do currently. This past summer I made about 2,000 doing that.

So that's been pretty good. And so when you say next level, what does that mean, Tyson? Well, I mean, like what we were thinking about is, you know, doing some marketing and making like shirts with the company name and logo on it and websites, stuff like that. No. No, man. name and logo on it and website stuff like that no no man you you i know the younger generation thinks like shirts and stuff like that is cool great right now you need to be generating money not uh setting up things it's going to take away from your money now if you want a shirt just so

you look good when you're out there cutting grass that's great um i have no problem with that get you a nice little shirt slap a logo on there and be good. Right now, I'm thinking about how do you pick up more clients? Okay, $2,000 and cutting grass is great. But you'll see inside the Teen Entrepreneur Toolbox Kit, there's a guy just like you started at 15. He was making $40,000 a year cutting grass, but he kept his expenses very minimum. And he had close to about 35 clients that he was cutting every single week. Then check this out, Tyson. In the winter months, he didn't cut grass.

He went and shoveled snow. So depending on where you are, he adapted to the season and kept his expenses low. So I want you to stay on the line. Kelly's going to get you the Teen Entrepreneur Toolbox Kit. I'm going to teach you everything. I'm going to teach you how to secure the bag at a young age, and you're going to be straight. Thank you. And Tyson,

go knock on the door today and get one more job, okay? No t-shirts, no advertisement, no secret Facebook campaign. Just go knock on the door. And you've got it. Alright, let's go to Courtney in Detroit. Courtney, how are we doing? I'm doing well, John and Anthony.

How are you? Doing great. Good deal. How can we help? Go ahead. So I'm going through an interesting season. 2020 was beautiful. And so I'm going through a divorce.

I'm sorry. Yeah, thanks. And I have some significant mental health issues and I'm looking to start over but I'm trying to figure out what that looks like for a house and how much I could spend and how long I should wait sorry I know that's a lot but yeah yeah I mean it's such a great question how is your divorce process going right now is it it at least moving smoothly? I know it's probably not the greatest experience, but is it going smoothly at least? Yeah, I just printed out the paperwork online. We don't have any kids or anything.

Okay. All we have is a house together. And you're going to sell the house? Yes, sir. Okay, cool. And what's your income right now? I just got a $15,000 raise. Great. So I'm at $60,000. $60, sir. Okay, cool. And what's your income right now? I just got a $15,000 raise. So I'm at $60,000.

$60,000. So that means you're at about $50,000, probably about $46,000, $47,000 net. How much debt are you in after the divorce? The divorce should pay off everything. So I sold my car. I'm renting right now for about $1,000 a month and should net about $12,000 to $15,000 from the sale of the house. Should have a little bit of a down payment.

Okay, cool. Before we think about a down payment, what's going to be in your savings account? That's funny. Well, that's the timing thing. So $10,000 and then saving up for the down payment. There you go. You just said exactly what I was going to tell you. I think right now with you coming out of divorce, I'll let John check in with you on the divorce side of things. But from a practical side of things,

I want you to take that money from the divorce, make sure you pay off all of your personal debt, all right? Because you're going to be ahead of the game with the average person who leaves a marriage. Normally, they leave the marriage with stress, with debt, with issues. So you're leaving, unfortunately, in a good way, in a healthier way. So what I want you to do is go ahead and put that money in your savings account. Go ahead and establish at least three to six months. And then after that, let's go ahead and start pocketing money um for a down payment but if i was you i'm going to sit for two years and see where is my life going uh from here um and it sounded like you was like oh but there's nothing wrong with

dating that's a long time yeah well it's a long time to make sure that you are going to be in detroit michigan or uh you may find you someone and you may be moving. So, I mean, I would say give yourself some time to adjust to your new life, save up for a down payment. Then once you're in a healthy place, okay, I'm going to be here. I'm in a healthier place. I'm healed.

I can think straight. Then yes, go ahead and get you a house. I think, Anthony, that's so wise. When you're coming off a divorce, it's so tempting to want to jump into the next stable thing. And you end up jumping in into water that is way too deep for you to swim. Courtney, you've got to grieve the loss. You got to get your hands and heart and health back. You got to get your head around the mental health issues. Go see a professional, get your head on that screw on straight. Anthony is dead right. Two years minimum

before you buy a house. You need to get your soul back. Then you can start thinking about buying a house. People all over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a nonprofit organization that helps members carry one another's burdens with health care expenses, and they have successfully shared each other's medical bills for nearly 40 years. See if CHM is right for you by visiting chministries.org.

CHM is a proud sponsor of Dave Ramsey Live Events. This is the Dave Ramsey Show. I'm Dr. John Deloney. I'm joined here by my good friend and fellow Ramsey personality, best-selling author, Mr. Anthony O'Neill. We are taking your calls about life, taking calls about your money, taking calls about anything that's going on in your heart and mind. We are here for you. Let's go to the phones. Let's go to Kevin in Bentonville, Arkansas. Kevin, what's going on, man?

How can we help? Hey, fellas. So a couple years ago, I co-signed a loan with my son's mother because she didn't really have any options due to her credit and um here recently uh she has been defaulting on the payments and it's really wrecking my uh credit so i was just calling to see like what options i had available to try and uh get my name off that and get everything fixed up for me. Oh, man. So let's break this down one more time.

You co-sign or they co-sign on something for yourself? I co-sign for them. Okay. And what you co-sign for, what is it? It's a car. Okay, cool. How much is the car payment? It's about $250 a month. Okay's about 250 a month okay 250 a month all right how much longer do you have how much longer do y'all have to pay on the car

uh there's about seven or eight thousand dollars left so not a ton but uh because she hasn't been paying it lately it's really thanks my credit i was was right at about $700, and now I'm below $600. Okay. All right. I understand. But what's your financial situation at right now? How much money do you make a year? My net last year was about $35,000. $35,000. Okay. How much money do you have in the savings right now?

So my savings, I just wiped it out because I just bought a house. Okay. All right. So you have zero. Okay. Yeah. All right. So here's the thing. I'm not going to dive into the, on the deep end side of why we teach people to not do cosigning because you've already done it. So I don't want to, I don't want to feel like we are attacking you in this one, but this is one reason why we say do not do it. Number two, right now, there's nothing you can do. You know, really, only thing you can do is make the payment. You signed the piece of

paper saying, hey, if something happened, I will make the payment. So legally right now, you need to make the payment of two hundred and $250 and get it caught up. I'm not really concerned about my credit score. What I'm concerned about is I don't want nothing coming after no one coming after me to recoup this balance once it goes through collection. I don't want no one calling me and my family bugging me about someone else's car stuff. But I signed up for that as a co-signer so with that being said i'm going to advise you right now have a conversation with the individual you co-signed for get a game plan and say hey listen i have to step in but everything that i do pay eventually we're going to have to talk about

okay how i'm gonna get this money back but unfortunately right now the only thing you can do kevin is just step in make the payments or pay it But unfortunately right now, the only thing you can do, Kevin, is just step in, make the payments, or pay it off. But right now you're not in a financial position to definitely pay it off. So you need to make those payments. You sign up for it as a cosigner. Bottom line. Okay. So do you get that?

Thank you. Yeah, you got that. There is no magic pill here. No silver bullet on this one. You just got to bite the bullet. Right. And that's what a cosigner is right anthony it's the bank says i'm not gonna give her the money i'll give both of you the money right well you're on the hook for it then and here's the thing and this is why

i teach people um especially like my generation are you in in my generation? Yeah, of course I am. How old are you? 59. Oh, yeah, definitely in my generation. Not really. I'm not 59. I know you're not. You're in my generation. I'm 27.

Right, definitely not 27. But like I was saying, this is why I teach our generation, specifically that 20, 30, young 40s, to avoid cosigning. Everyone has good intentions up front okay but life does happen and the last thing you want to do is go into something thinking it's good and a dream turns into a nightmare a kind gesture turns into a wrong gesture you have to start thinking about

your future what you want to do and at the end of day, you do not want to co-sign someone being a slave to a lender. Right. Okay. And so for me, no, I'm not going to co-sign for you, John, to get a car because for one, I don't believe in debt. And so I'm not going to help you do something that I believe in. Right. I don't believe in.

And so you want to avoid that. And then let's say if I did do that i don't want down the road life happened to you i'm over here living good with my wife my kids and we're going after our future we're building our wealth then all of a sudden i get a call saying hey uh john missed his payments and we're about to repo the car and this is about to hurt you in your situation that's right and so um we really have to start thinking that there's nothing wrong with saying no because saying no actually helps the individual. No, it's a gift.

And, man, think of Kevin's heart here. The mother of his kid needs a gift from A to B. Yep. He wants to help out. Yeah. And what he's done down the road has hurt both of them. Yeah. Right?

Yeah. Yeah, yeah, yeah. He really has, man. Do not co-sign. Hey, banks aren't your friend, right? We think of banks as our friend. Yeah. Yeah. Yeah. He really has, man. Do not co-sign. Hey, banks aren't your friend. Right? We think of banks as our friend. They're not.

They are trying to make money off of you. Banks are a tool because we all need a bank. That's right. But they're not our friend. And so if a bank won't loan your buddy money, think about it. Right? Yeah. Why should you?

Right. Right? Right. The bank has done the math and said, they're probably not going to pay us back. Here's the truth. I won't even loan my friend's money. No. I'll has done the math and said, that's probably not going to pay us back. Here's the truth. I won't even loan my friends money. No. I'll give you the money or we'll walk away.

If I cannot afford to give it to you, then I'm not going to loan it to you at all. Because I don't want to screw up my friendship. That's exactly right, man. I don't have time for that. All right. Let's go to Kevin in Boston. Kevin, how are we doing? Hey, not too bad.

How are you doing, John and Anthony? Outstanding. Outstanding. How can we doing? Hey, not too bad. How are you doing, John and Anthony? Outstanding. Outstanding. How can we help? Yes. So I am on Baby Step 2, and I have my federal student loans sandwiched in between my consumer debt and in my private student loans. I don't know if I should postpone the federal student loans due to the Biden administration. No, no.

All sorts of. OK, no, no, no. So pretty much just just go for it. Yes. And listen, and this has nothing to do with Biden. This has nothing to do with President Trump. This has nothing to do with that. Do not wait on the government to take care of your house.

Bottom line. Right. OK. And let's just say Biden and his administration presents something to the Congress. It still has to get approved due to Congress. And studies have shown us, facts have shown us, student loan forgiveness is not happening. Now, I'm not saying it cannot happen in the future. But what I am saying is, man, you sound like a smart young man.

You sound like you know exactly what you need to do. What I'm saying is you start going down the journey to take care of your house and then if the government does do something to they do forgive they do do some stuff like that then yes take advantage of it but as of right now do not postpone your future at the possibility of what the congress and what the president's administration may do, because facts are showing us it may not happen, bro. And Kevin, this is just a character question. Yeah.

Did you walk into an office and look down at a piece of paper and sign your name and say, you're going to help me go to school and we'll pay you back? Mm-hmm. Yes or no? Wait, sorry. Can you repeat that question sure if i walk into it if i walk into an office did you walk into your financial aid office and you look down the piece of paper and somebody that you don't even know said i'm gonna give you the money to go to school and you said i'm gonna pay you back i'm gonna sign my name to this piece of paper assuring you that I'm going to be a person of character and pay you back. Yeah, after reading Dave's book, that's not what I should have done.

No, no, no. I'm just saying, is that what happened? Yeah, it pretty much is. I was a little naive to sign. Yeah, yeah, yeah. We all were. We all were. We all were.

I'm the same boat. I had a bunch of zeros after my loans. But the reality is, like Anthony said, waiting for some dragon to come through and some fairy godmother to come take away what you said you were going to do. You said, yeah, if you loan me the money, I'm going to pay for it. To me, it's a character issue, man. Do the best you can. Get that paid off. Keep it in line. And then keep rocking and rolling, man. Do the best you can. Get that paid off. Keep it in line.

And then keep rocking and rolling, man. You know, we'll talk about this after the break. Because I agree with you 50% it's a character issue. Because the other 50% why I do not agree it's a character issue, because I think a lot of these young people don't know what they did. Oh, I agree. There's a predatory part to it. No question.

Yeah. So it's like 50%, yeah, character issue. 50% is naive. Just didn't know. That's right. You know what I'm saying? I got you. I got you. But let's talk to it, no question. Yeah, so it's like 50% yeah, character issue. 50% is naive, just didn't know. That's right. You know what I'm saying? I got you, I got you. But let's talk about it after the break because we can have some fun with that one. Because I love my people.

I love my people too, but pay your bills. You said you're going to pay. Pay. I know we tricked you. This is the Dave Ramsey Show. I'm John Deloney, joined here by Ramsey personality and best-selling author, Mr. Anthony O'Neill. We're taking your calls on life, taking your calls on money. 888-825-5225.

It's 888-825-5225. It's 888-825-5225. Or you can contact us at Ramsey Show. Speaking of at Ramsey Show, Anthony, your YouTube channel continues to lose its mind. Our friends and colleagues, their YouTube channels are going great. What's going on in your YouTube world, man? Hey, man, I'm excited. Today we crossed 200,000 subscribers. 200,000.

Yeah, man. We just launched this channel about a few years ago. Did about 150,000 subscribers last year. And just really excited, man. What I'm seeing within my tribe, within my brand, is we have this 18 to about 40-year-old individual that that is saying, you know, I'm sick and tired of this norm. I really want to get out of debt or avoid debt and start building wealth, start a business at a young age. And so we just have this huge movement of young people hungry, both black, white, Hispanic, Mexican, you name it. Young, all the way up to about 39, I would say, to be honest.

Listen, Ayo, we're down with the cause. We want to be real. We want to be relevant. We want to be righteous. But we want to build wealth so we can start creating generational wealth. And so I want to encourage everyone two things. Number one, I want you to go watch my most recent show with my good friend, your good friend, Chris Hogan. He and I sat down and talked for about 35 minutes on here's how you're going to win with your money in 2021.

Already about 40,000 views that just came out this week. And I mean, you just see young people getting excited, excited, excited. And so here's one thing. Parents, if you're listening to this, I want you to write down this number. Young people, if you're in between the ages of 18 to 39, I want you to write down this number. This year, I'm really focused on helping young people reach their goals, get out of debt, pay off student loans, go to college debt-free, go to grad school debt-free, and start building wealth. I'm going to be teaching them how

to really purchase a home, how to start a business. I'm going to be really doing a lot of things. and so i want you to text this number asap 615-930-3431 again that number is 615-930-3431 this is the official line to communicate directly with me and my team so that we can help our young people just get out of debt avoid debt and start building true wealth and when i say true wealth john i'm talking about true wealth we're not going to look like we have money we're really going to have money we're not just going to drive a bmw and be broke no we're going to have a bmw and be wealthy you know and so if that's you between the age of 18 39 i mean even if you're just older and you just want to be a part of family as well just give me a text 615-930-3431 direct line to myself and my team.

And this year, man, I'm sending out special things, special tips and tricks. I'm a little nuggets to this, this family and I'm releasing a podcast. I ain't going to say when, but they will be the first person to know because they're a part of family.

So you mentioned generational wealth. Yeah. For so, so many of family. So you mentioned generational wealth. Yeah. For so, so many of us. Yeah. Getting a paycheck is just so we can get some stuff, eat, rent, transportation, go on a date or two, but it's just to get some stuff. Explain what generational wealth means. You know, when I think of generational wealth, I think of my kids' kids.

You know, for an example, let's step back and then you'll see what I mean. We are in a world of fighting against debt. Okay. For an example, Wells Fargo, two family members, last name, not upset with them. Rolls Royce, a car, family, last name. How is it that I go from the O'Neill family when I was younger. I would go to Wells Fargo, a family, borrow money from them on a credit card or get a car loan to go over to Rolls Royce, for an example, to get a car and then come back home to my family and I'm broke. How's it that I work Monday through Friday? Monday through Friday, I have this hard labor, but I have no fruit of my labor.

Somebody else gets the fruit of my hard labor. And so generational wealth for me is I'm going to put in hard work, but I'm also going to put in hard work so my kids can have the fruit of my labor. So my grandkids can have the fruit of my labor. So my grandkids, grandkids will know my last name because of my hard labor, because I was a good steward. I was wise and I was thinking about them, not just thinking about how do I impress some lady? One of my biggest fear, I told this to my therapist probably like two years ago. She said, why are you so hungry about being debt free? Like, why are you so hungry about this message? It's because I watched my mom tell me no on certain things that she should have told me yes on

and i said i refuse to tell my wife no when i should have told my girlfriend no i'm gonna tell my wife yes because i told i said i told them no a lot a lot of people get upset at me now because i'll tell a young lady you know i'm not taking you out to no 500 restaurant you know what i'm saying but i'll take my wife to a thousand dollar restaurant you know what I'm saying? But I'll take my wife to a $1,000 restaurant, you know? But I'm going to make the right moves. To me, generational wealth is about thinking bigger than myself. It's about thinking about my kids, kids, kids. And that's what we're doing here at AO. We're building true wealth.

We're thinking about our last name. We're starting businesses. We're avoiding debt. And we're really just switching our mindset and looking at things differently. A lot of people think that I want them to drive horrible cars. No. You're looking at me when you said that. Well, you drive a good car. I don't, but it's cool. But it's cool for you. It gets me where I need to go. That's it. And I want you to do what you want to do. There we go. But you know, I'm going to drive the car I want to drive. And I tell people that. People say,

that's not a Dave Ramsey car, but what's a dave ramsey car a dave ramsey car is one and it's debt free got a fully funded emergency fund he's fully investing and he's on his mission that's a dave ramsey car your car's a dave ramsey car mine is yours is a dave ramsey car it's paid for that's right and you got money in the bank fair enough you know but see me i don't like hunting you like hunting right so you spend your money over there. Right. So I mean, that's good. I ain't mad at you.

But at the end of the day, we're asking people to do this one hard thing. What is that? Plant seeds and tend the soil of a tree that you are never going to eat the fruit from. Right? Yeah. And you may get some. Yeah. And you may get some. Yeah. But I'm asking you to turn around and face down your past, face down the thoughts, the images, all the stuff. Yeah.

And then turn around and choose I'm going to be different. Yeah. So that those coming after me are going to be able to eat that tree so i bought like a few acres of land cash um last year and i will never see the benefits of that land it will go to my kids there you go that's something that my parents can't do for me today i could have spent that money and bought a better car i could have spent that money i could have used that money and did something else that benefited me right but i'm like no i i want to i really want to build true wealth i want to say that i have a portfolio and when i die i came into this world crying and i'm gonna leave this world smiling because i came in here crying i'm gonna look up at my wife. I'm going to see her and I'm going to see my kids.

And I'm smiling because I know I'm leaving them with wealth, with joy, with peace, with freedom, not stress. And that is one thing that I'm really trying to teach to these young people. Like, hey, we can have life. We can enjoy life. We can have what we want. But are we really thinking about past us? The average person is going to leave their families when they pass with bills and benefits

not wealth not freedom not joy and I refuse to be on this side and so that's why if you are between the ages of 18 and 39 I gotta stress this again if you want to be serious about this mission I want you to text 615

9303431. Again, that's 615 930 3431. Tell your friends, come join the movement, because it's time for us young people to change our mindset and really start going after true wealth. And if you want to go into 2021

on a high, join us next Tuesday night, January 12th at 7pm for our free reset live stream event to kickstart your money goals for 2021. That's any age, anybody, any group. 100,000 people plus have already signed up for this. It's out of control.

It's going to be Chris Hogan, Dave, Rachel Cruz, Craig Rochelle. They're going to give you the motivation and guidance you need to hit reset button and say goodbye to stress for good. Text reset to 33789 or you can sign up at DaveRamsey.com slash reset. That's reset to 33789. DaveRamsey.com slash reset.

We're going to start living differently starting now. This is The Dave Ramsey Show We'll be right back. This is the Dave Ramsey Show. I'm John Deloney, joined here by Ramsey personality Anthony O'Neill. And we are taking your calls about your life, your money. 888-825-5225. That's 888-825-5225. That's 888-825-5225. Let's go to AJ in Indianapolis. AJ, what's going on? How can we help? Hey guys, I really appreciate you taking time to help me today. Oh man, thank you for taking time to call in. What can we do to help? Yeah, so I just changed careers, which was a blessing. And now we have a very variable income, meaning it can be, you know, anywhere from three to five hundred dollars less than what we need to live on each month, all the way up to, you know, two to three thousand dollars more.

So I'm just wondering, how do we best budget that? Like, yeah, just looking for tips on that. Oh, man, such a great question, man. You know, and both John and I's income fluctuates every single month. Okay, so we are very familiar with this and we see it as well. Here's something that I do from a practical standpoint is I actually do the budget off of the last three months average. So let's say for an example, if I go back to the first quarter of this year, let's say if we was in, let's say April's, January, March, April, we're in April. I'm going to look at what was my average over the last three months. And whatever that average is,

that's the lowest month. I'm actually going to make that my budget for the previous month. Now, here's the thing that you're going to have to really do is to pretty much make your living expenses off of that average. So your income, not your income, but your living expenses need to be less than 25% of that low point, not your high point.

And let's just say, for example, you do bring in an extra $2,000, but you know, for an example, like for me, my summer months are extremely low. Okay. So July and August for me are my lowest months ever. So throughout the first six months, I'm actually pocketing money to go towards my June, July, and August budget. Okay. So if I'm making $2,000 more, for example, I'm going to set aside at least $1,500 of that to go towards my very low months. So when you get extra,

your thing is you're still living off of that average, and you're pocketing the rest for your low months. Does that make sense? Yeah, no, that makes a lot of sense. And to provide a little background, we are on baby step two. We're about 7,000 away from being out of that. And so would you suggest keeping a three-month buffer and then whatever else is extra thrown at the debt or how does that work? So here's what I'm going to suggest. I'm going to suggest that if you know, for an example,

let's just do easy math. Let's say for an example, you need $5,000 to live every single month. But then you know, for an example, in July, you're only going to make $2,500. So this means, let's say if you make an extra $7,000 this month, yes, I want you to put that extra two grand in the savings account because that's what you need to live off of the next month. Now, let's say for an example,

you make an extra five grand. Now, put the two grand aside for your low month and then you put the rest of that money towards your debt. Because what I don't want you to do is have extra money. You put it all towards debt. Then you get to your low months that you already know you're going to have. And then you have no income to go towards that month. So, yes, budget, be wise. But in the extra, go ahead and add that to your debt. Perfect. And, AJ, I tend to lean a little more scarcity mindset.

And I don't like to live that way from a relationship or mental health standpoint, but I like to budget for my lowest possible month. Absolutely. And that's where I live against. And that way, anything I know coming in is always going to be gravy on top. And so we, my wife and I said, here's what we, the lowest it's going to be this month. Let's budget against that. Anything above that, then we've got our savings and payoff priorities right there in line, right? Great question, man. Let's go to Vanessa in Utah. Vanessa, how's it going? Good. Thank you so much for taking my call.

You betcha. How can we help? So I am a full-time student. I work full-time and I just had a baby and now I'm basically a full-time mom all the time now. And that kind of lit a fire under my butt on getting on top of my finances. I've never really budgeted before. Um, me and my husband decided that we want better for our family in the future and long lasting wealth like you guys were talking about earlier. So I just had a conversation with my parents the other day that they're being very gracious and they're helping me pay for student loans. I have about $33,000 in student loans. I have a year and a half left by the time I'm done in my wealth well, when I start my career, I'll be making $80,000 a year. And they're giving me $400 a month to go towards whatever like we need, but it's like intended for

helping with schooling that they had promised before and weren't able to help in prior years. And I have a car loan of about $1,200. And so I'm wondering if it would be smarter to put that money and pay off the car faster, or do I put that towards the student loans? I'm going to take that money and add it all towards your debt snowball. So what's the lowest thing that you have right now in debt? It would be probably my credit card, which I just pay off every month. And then, um, the thing is I'm like not very financially smart, I guess, in, um, educated. And so I don't know, like if my student loans, like I can see they're broken up by each specific loan but i know

that when you graduate it's all kind of just one big lump sum so i'm not really sure how that works um so then there's like you know $3,500 loan and $2,500 loan this and that and then adds up adds up adds up yeah so vanessa one of the things that we teach here is the debt snowball so number one uh i'm not gonna you know hammer this down your throat today, but you already know what I'm about to say. You got to cut up the credit card. I get the idea of paying off every single month, but you know what I teach there. So that's that.

After that, I want you to line up all your debt from small to larger. So I want you to break down your student loans, A loan, B loan, C loan, D loan, and attack it that way. So make all your minimum payments you know on each one and then the extra that you have left over from the four hundred dollars that your mom had given you or from your income put that towards the smallest loan work it the exact same way so I'm not saying hey just put one towards the lump sum of a loan no knock out one loan a loan loan, B loan, C loan, D loan, and then go from there. But how much is your car worth?

I'm not really sure. I bought it at $22,000. Okay. All right. How much? When did you buy it? 2017. 2017.

So you should be right around like $15,000, $16,000 and probably, what kind of car is it? It's a CRV. CRV. Okay, cool. So it should be worth right around 13 in um and so i would definitely attack that i mean once you get a job i would definitely definitely attack that your parents are taking good care of you so that's a good thing okay and vanessa thank you so much vanessa thank you full-time student full-time employee

now you're a mom you grew a a human, all of this in 2020, I don't ever want you to say the words, I'm not that smart ever again. Okay? Okay, thank you. For you, someone who is willing to grind and work hard and be a person of high responsibility and character integrity, this is an easy thing for you to figure out. Okay? Okay, thank you so much. Put your head to it, put your mind to it, put your heart to it, responsibility and character integrity, this is an easy thing for you to figure out. Okay? Okay.

Thank you so much. Put your head to it. Put your mind to it. Put your heart to it. You're going to be out of debt in no time. You're going to be an extraordinary mom. That's awesome. Yeah, that's awesome.

I mean, that's a lot. I mean, full-time student, full-time employee, and a full-time mom. She got three full-time jobs. I tell you what, and that being a full-time mom is like five full-time jobs. She's got nine full-time jobs. She's got 17 full-time jobs. I tell you what, and that being a full-time mom is like five full-time jobs. She's got nine full-time jobs. She's got 17 full-time jobs right now. Absolutely. Especially to a newborn baby.

But there's nothing that will get your fire going like looking at another human being that is totally helpless and dependent on you saying, what's my legacy going to be, Mom? What's my legacy going to be, Dad? What's it going to look like, right? I look forward to that day. Yeah? Yeah. I'm going to cry. You're going to cry when Dad? What's it going to look like, right? I look forward to that day. Yeah? Yeah. I'm going to cry.

You're going to cry when you have a kid? Oh, yeah. I'm just kidding. I did too. I'm both supposed to be. You're trying to tell me you didn't cry? I cried on both of mine. I still cry.

I saw my son playing in the snow this morning all by himself. I started crying again. I'm not going to cry when I see him playing in the snow. I'm going to say, clean that mess up. I want to thank producer James Childs and associate producer Kelly Daniel. Thank you for joining us. We'll be back. This has been the Dave Ramsey Show.

If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.