The Ramsey Show - App - How Do We Use Our Side Hustle Money? (Hour 3)

Episode Date: January 2, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It's a free call at 888-825-5225. That's 888-825-5225. Angela is with us in St. Louis.

Hi, Angela. Welcome to The Dave Ramsey Show. Hello, Dave. Thanks for taking my call. I appreciate it. How can I help? Hey, I just went through your program about six months ago, and I just retired from the military about two months ago after 30 years of service.

Your phone sounds a little muffled. Can you speak directly into it? I sure can. Oh, much better. Thank you. And thank you for your service. Oh, you're very welcome. It's my pleasure. I'm 54 years old, no dependents, no one in my family, my brothers and sisters, needs my money. I have no credit card debt, no vehicle debt. I have an emergency fund of $9,000 and a savings of $6,000. I also have a $260,000 traditional TST and $ 93,000 Roth IRA.

And the only debts that I have are I have a primary home mortgage of $89,000, and I also have four rental properties, two in Las Vegas, which are both mortgage-free, and two here where I live that both have mortgages on them. Now, after I retired, I kind of got to talking to some different financial advisors, and one told me that I could actually roll the $260,000 traditional TSP over into a civilian IRA, and that there was $30,000 that I contributed while I was deployed that will not incur a penalty if I took that out to pay off my home mortgage, to help pay off my home mortgage. I love it. I kind of want to know what your thoughts are. I would do that.

I think both of those are good moves to roll it. I always roll anything to an IRA when I leave a company, and the TSP is a fine plan, but you can beat the options that the TSP has in good mutual funds. Okay. And so I would roll it to a direct transfer rollover into an IRA. And if there's $30,000 available from your deployment days to throw at the $90,000 mortgage, boom, that's going to move that along.

That's awesome. Have you got how much non-retirement money have you got? I have the $6,000 in my savings account, and I have $9,000 in my emergency fund. And then I'm on my pension, so I get about $5,700 a month from my retirement pay. And I will be getting a VA disability. I'm still going through that process right now. So my total utilities debt for the home, for my primary home, is about $1,400 a month. Yeah.

Okay, but what I was looking for, you don't have like $30,000 in a mutual fund that's not in a retirement account. Correct. I don't have any other money than what I've told you. Okay, so we're going to throw the $30,000 at the $90,000, and that leaves us $60,000 to do. And you said you're 50 years old? 54. 54. 54. said you're 50 years old? 54. 54. So what's your new career?

I'm going to take a year off and travel. So I need a break from the military. Okay. And when I come back, I might work. I might not. I haven't decided. I want you to work when you come back. But I don't want you to work at something you hate. I want you to work at you come back. But I don't want you to work at something you hate.

I want you to work at something that is your dream so that it's fun and gives you energy rather than takes your energy. You associate work. When I said that, the reason you laughed was you're like, oh, God, he wants me to dig ditches again. I don't want to dig ditches anymore. I'm tired of digging ditches. I don't want you to dig ditches. I want you to do something that's fun. I don't work because I need money today angela i work because i love doing

this and you can tell by listening can't you oh absolutely i want you to find i want you to find something that's fun like that for you i don't care what it is just because every because number one it'll energize you it'll help you grow as a person to engage in something after you do your your travel time i got that that's fine um but you need to be doing and engaging your brain into something and it'll be good for you spiritually emotionally everything else oh and on top of that you're gonna make some money which is gonna pile up and make you an everyday millionaire because we're gonna get this house paid off and you're going to be able to invest more. You may make more money in the last five years of your 50s,

55 from the return age, return from the trip age to 60. You might make more money than you've ever made in your life in five years. Do you think I should sell those two rental properties with a mortgage on them? If you don't develop a plan to get them paid off real fast, yeah. Okay. How much equity is in them uh about 50 for both and what do you owe on them i owe 50 000 on one and 77 on the other so you can sell one and pay off the other that could work too yeah if you wanted to but see the thing is this what are we saying 200 grand makes makes you 100% debt-free on all of these things. And we're going to pull $30,000 and throw at it, so it's not even that.

It's more like $150,000 makes you 100% debt-free, okay? The two houses in Las Vegas, I bought those during that downslope in 2008 for $80,000 each, and now my realtor said they're worth $220,000 each. I love it. That's awesome. If you want to keep them, I would plan to get them paid off between the ages of 55 and 60 with this new career I just proposed for you. Okay.

Okay? Thank you, Dave. Thank you so much. Yeah, I want you to find something you love doing, though, because there's too much good that you can do to waste it doing nothing. Thank you for your service. I appreciate it. And, yeah, that year off sounds fun, or six months off, or whatever.

That's all good. Reset your batteries. While you're doing all that, dream. Dream again. What is it? I could be anything I wanted to be. What would I be? Then go be one of them, kiddo.

No reason not to, right? And it's all, everything's possible right now. You really have a great situation with your retirement income, your disability income coming your way. All these properties paid off or almost paid off. You are in such good shape. But I just want you to put the icing on the cupcake here. That's all I'm saying. So, hey, good question. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. It is a free call at 888-825-5225. Kirk is on Twitter. Dave, I'm 49 years old and on my second career, I get a pension from my first career. When investing my 15% of my gross, do I count the pension income? No.

Well, you can. I don't care. It doesn't matter. The 15% is that you're putting 15% of your income away to build more wealth. Yeah, I probably would count it. Why not? It doesn't hurt anything. There's no magic formula here.

It's not a perfect formula. The point is be investing a substantial amount, and the more you invest, the more you're going to have. So, yeah, what's the other option? You could give it. That'd be okay. You could could give it that'd be okay you could spend it that'd be okay but you got plenty of money so i now i think i'm gonna put 15 of your household income including retirement disability or whatever's coming in into retirement because the more you put into

retirement the more you put into investing the more you're into retirement, the more you put into investing, the more you're going to have, which puts you in a position to spend more and get more. If you live like no one else later, you can live and give like no one else. This is the Dave Ramsey Show. Business leaders, right now you have the opportunity to take your business to the next level this new year. You can start by hiring the right people to help your business grow. At Ramsey Solutions, we post on LinkedIn Jobs because they are the best at matching the right person with the right job. LinkedIn Jobs screens candidates with the skills you're looking for so you can hire smart and fast. The thing I love about LinkedIn is they look beyond just the work skills and put your job post in front of qualified candidates who match your business requirements perfectly.

That's how LinkedIn makes sure your job post is seen by the people you want to hire, people with the skills, qualifications, and other interests that will help your business grow. It's no wonder a hire is made every eight seconds on LinkedIn. So this year, set your business up to succeed. Get started today and get $50 off your first job post. Visit linkedin.com slash Ramsey. That's linkedin.com slash Ramsey. Terms and conditions apply. John's in Orlando.

John, welcome to the Dave Ramsey Show. Hey, Dave. What's shaking there? Thanks for having me. Certainly. How can I help? All right. So I think it might be best if I give you a real quick insight of what I got shaking up,

and then my question will kind of follow there. So I'm 24 years old. I'm making $105,000. I put 21% in my 401K. I maxed out my Roth IRA every year. I got $15,000 in my own mutual fund investments just from listening to you. But then the more I listen to you, I start thinking, okay, you're always about paying off your house, paying off your house. I got a loan from my dad. I got a good deal on a house. I put down 60,000 of my own

money. I got $145,000 loan from him. Three and a half percent for 30 years. Do I hoard my money and put it in mutual funds and just keep paying him the minimum payment each month, or should I start attacking that payment more? When we have studied tens of thousands of millionaires over 30 years, we have discovered one of the correlating data points is that the average millionaire gets their home paid off as soon as they can, typically in under 10 years. And so keeping a home mortgage in order to hoard money or in order to invest money

is not a data point that millionaires do. And so it's usually, and the other problem is this. The borrower is slave to the lender, and so Thanksgiving dinner is going to taste differently until you have your dad paid off. Yes, sir, 100%. Okay. That's why I wasn't too sure. I started listening to you recently, and you've said, hey, attack that.

You're killing it, man. What are you doing for a living? I'm in construction equipment sales. You're just stellar, man. You're knocking it, man. What are you doing for a living? I'm in construction equipment sales. You're just stellar, man. You're knocking it out of the park. Well done, sir. Very well done. Thank you.

Well, I think you got a real jump on the numbers here. You're going to be in great, great shape. The fine-tuning that I would do if I were to sit down with you and coach you personally, which I'm doing right now. The only fine tuning I would do is I would take you through our baby steps, and that would involve you have an emergency fund of three to six months of expenses, and that is all. And I think you said you had $15,000 saved?

Yes, sir. That would be your emergency fund, not to be touched for anything except for emergencies. Let's just label it that. The second thing is then once that's done and you're debt-free other than the house, which you are, I would put 15% of my income into retirement, not 22 or 24 or 21. And so I would back that down a little bit so that i could do the next two baby steps one of which you don't need to do the next baby step is kids college you don't have to deal with that i assume you don't have children yes sir okay and then baby step six is pay off your house

early so i would crank down my investments just a little bit into retirement and i would crank up and let's beat on this house i'll bet you the house has paid off in like three years geez okay yeah definitely then you make a ton of money and you're really intentional and careful with it and thoughtful about it that's why you're where you are um i gotta tell you you're pretty unusual because most of the time, people that make a ton of money in sales spend it all and then some. And the fact that you're 24 and you're doing this is super impressive.

Yes, sir. My dad's been listening to you forever. He was frugal and smart, and he started to, like, trickle down and teach me. And I started listening to you more myself, and I was like, man, he's talked about hitting that house payment hard. I want to talk to him and see exactly what he thinks about my scenario. I mean, $50,000 a year, you're done in three years. Out of 104, you know?

I mean, you're the type of guy that can do that. You're sitting there 27 years old, and the house is worth what? House, we had to pay cash for it, so we got it for 205. What's it worth? You know, it's estimated at like 242. Okay, so you have a $250,000 paid-for house. By the time you're 27, let's call it a $300,000 paid for house and you're making 100 plus a year ding ding man i mean you're rocking really that's all i'm doing here

is taking the ferrari and giving it a little tune up because you're already you're already a ferrari i mean you're already way ahead you're're just doing great, man. Well done. Congratulations. I love it. Thanks for the call. Robert is in Salt Lake City. Hey, Robert, how are you? Hey, Dave, how are you doing? Better than I deserve. What's up? Well, my wife and I, I'm 22. She's 21. We've got two kids, and we've recently decided, after making a bunch of mistakes while younger, to get out of debt. Cool. I started listening to you with a recommendation from my dad. And the one big question I have, you know, we're sitting about all in all with school loans and everything else, medical, credit cards.

We're sitting probably about $70,000 right now that we're trying to get paid back. Now that we've started, it's like all the problems start to come out. As soon as we start trying to set money aside, we get hit with the wave. How do you recommend going about trying to resolve that, trying to keep putting money in the right areas? For example, I just put a $4,000 repair into my car. Luckily, I didn't have to take out a loan. My grandmother actually fronted the money for it. But now I owe her that money, and it just added instead of taking away. Let's just stop and think what you just said.

I didn't have to take out a loan, but now I owe her money. That's kind of like a loan. Correct, yeah. Yeah, so let's just change our words and be in full admission of everything that's going on here. All right, so what's your household income? About $62,000. And how much do you owe on your cars? My one car outside, I owe $4,000 for the repairs.

On mine, my wife has about $5,000 left to the bank. Okay, good. So what's the bulk of the $70,000? What's the big number? Student loans? Student loans, I'd probably say about $43,000 in student loans. Okay. Your wife at home full-time with the babies?

No, she works full-time, so do I. Okay. What wife at home full-time with the babies? No, she works full-time, so do I. Okay. All right. What do you make? I make roughly $36,000 before overtime. What do you do? I run a computer repair shop for an Apple partner. What's your degree in? Accounting, actually. Okay. All right. Cool. You have your master's?

No. I went to the wrong school, made, you have your master's? Uh, no. Uh, I went to the wrong school, made the wrong, that's one of the wrong decisions. I'm just about to graduate with my associates. Oh, associates and accounting. Okay. All right. Cool. All right.

So here's what we're going to do. Uh, the first thing is, is that all these things coming at you were coming at you anyway, but now that you decide to pay attention, they're more noticeable. Um, and some of them come at you or coming at you anyway, but now that you decide to pay attention, they're more noticeable. And some of them come at you. It's just kind of the law of, we used to laugh and say, if you join Financial Peace University, your transmission goes out on your car the next week. I mean, it's like, it's just as if the devil does not want you to win, and he's going to beat up on something that you own, you know?

And that's kind of what you got going here. So I see a couple of things. One is we've got to get you on a detailed plan called a budget and you and your wife totally focused on that two is we're going to sell so much stuff the kids think they're next three is uh we're going to see what we can do to get both of your incomes up temporarily it's called the dreaded part-time job or extra overtime or whatever as a temporary measure you're going to work like no one else, so later you can work like no one else.

Because here's the deal. A $30,000 change in your household income changes your world dramatically. Dramatically. And that's both of you picking up some overtime or both of you picking up part-time jobs, or whatever. I don't know how that works exactly, but you're going to figure it out. People always do. And we're going to stop borrowing money for anything from anyone ever, including grandmother.

So I want you to go through our nine-week class called Financial Peace University, and I'm also going to give you, because when you buy Financial Peace University, the nine-week class, you get given the Financial Peace membership, which is all of the class online, the follow-up classes online on how to teach your kids online, as well as every dollar plus and the whole thing online. So Financial Peace University and the one-year membership to Financial Peace, free. I'm going to give it all to you, but you have to promise you and your wife to go to the class, and we're going to get you on a track, and then you're going to bust it.

You call me if you need more help. You can do this. I can't believe 2020 is here. If you're paying attention, you're already planning your new budget. For most of you, your mortgage is your single biggest line item. Lowering that payment could have a dramatic effect. My friends at Churchill Mortgage want you to save big. So if you get a free Churchill checkup this month, and it makes sense to refinance,

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and is not combinable with other offers. Thanks for joining us, America. Bridget is in Kansas City. Hi, Bridget. Welcome to the Dave Ramsey Show. Thank you, Dave, and thank you for sharing all of your knowledge. You've really got our family in the right direction. Cool. Good for you.

How can I help today? Well, we are currently on baby steps four, five, and six. My husband has a full-time job and a side hustle job, and he has not taken a draw on that. And after gathering all our information for taxes, it looks like we've profited about $30,000 from that side hustle that we haven't touched. Wow. And I'm wondering if we should bump up the kids' 529s, or if we should throw it at the mortgage, or if we should go back to baby step three and bump our four months up to a full six months, or how we should divvy up this money. Okay. Of course, there will be taxes out of that there

already is yeah yeah you pay the taxes on it this year i mean you're gonna have that no matter what so um yeah that so the 30 it's not 30 000 it's 30 000 minus taxes right correct okay cool and um well either one of those three things uh or any combination of those three things is fine. They all fit the baby steps. It's just a matter of where your concerns lie. How old are your kids? We have four. They are almost 10, 8, 5, and 2.

Okay. How's the 529s looking? Are you on track to have enough if you don't soup it up um probably not we've only got about 1500 per kid because we only started the 529s recently last year yeah and uh are you concerned about the emergency fund being small not really i mean it's just over 1616,000. Mm-hmm. Mm-hmm. And your household income overall is what? Including what he made from this will be right about $120,000.

Okay. All right. Well, I mean, if it were me just listening to you, I think your tendency is probably beef these 529s up, isn't it? It is, but I know that if one of them decides to get a scholarship and we can just roll one over to the next siblings. Correct, or you can withdraw the amount of the scholarship out of the 529 with no taxes or penalties. Okay.

If they get a scholarship, the value of the scholarship so if they get athletic academic or otherwise you know they get you know the whole tuition's paid because they're an athlete as an example uh a scholarship athlete then whatever the value of the tuition is can be pulled from the 529 with no taxes no penalties so there So there's no harm, no foul there. And, you know, you're dealing with 10-year-old, 8-year-olds. We don't know any of this yet. Right. Yeah, I think I'm probably playing a little catch-up on that 529 because I want that box checked so I can move on.

Okay. Thank you so much. Hey, thanks for the call. We appreciate you joining us gwen is with us in massachusetts hi gwen welcome to the dave ramsey show hi dave first of all i want to say thank you so much for the impact you're making around the world thanks to you 17 years ago uh we were exposed to your program through our church the pentecostals of murfreesboro there in murfreesboro tenn Tennessee, and were able to fully fund a one-year mission term in three months

from the time the Lord called us. Wow. And it's just because we were debt-free. Wow. And now we live in one of the most expensive parts of the country, and my husband's a full-time pastor, and we live on a modest income, and it's just possible because we're debt-free. Good for you.

So thank you. But I have a question we just need your wisdom on. Seven and a half years ago, my husband's grandfather passed away, and he was a very frugal man. He was a pastor himself. He prepared for his family. And in his will, he left two homes. Both of them were paid for, and we are now part of a partnership with those two homes that are rented out with my husband's dad and his brother. My

father-in-law is 50% ownership, and then my brother-in-law and my husband and I split the other 50%. There is emotional attachment to the homes on my father-in-law and my brother's part, and they live in the south in the area where the homes are. We, of course, are in Massachusetts. The money is just being put into a checking account for the expenses of the homes. We would much prefer, of course, because we live literally the other part of the country, just to be bought out. We're not long-distance landlords. Nobody in the family are handymen.

So any repairs are, you know, we have to hire someone to do it. And so anyhow, anytime we bring up, you know, possibly them buying us out, because we are now in a harsh part of our lives where we need to cash flow a daughter's college education. We need to start retirement funds. There are things like that we need to cash flow a daughter's college education. We need to start retirement funds. There are things like that we need to do, and we want to see some investment on that money. They don't have the money to buy us out. We are paying taxes on that.

The income that comes to us every year is between $3,000 and $4,000. So we're trying to figure out what is a reasonable way to present to them, okay, if we, that annual income of $3,000 to $4,000, we'll allocate this percentage to stay in the account for repairs to the homes, you know, miscellaneous this and that. But we would like to get this percentage of the annual income as income since we are paying taxes on it, and we really do feel like we could put it to good use. Okay, so there's two properties, two houses. Correct.

And what are they worth each? Each is about $60,000. And then that was seven and a half years ago. It's in rural Alabama. It may be a little bit more than that now, but somewhere around there. Okay, and you own a fourth. Correct. A third. A third. around there okay and you own a fourth correct uh a third i guess my father-in-law is 50 percent

and then the other 50 percent my uh brother-in-law my husband split that would be 25 percent yeah yeah you're right i'm sorry okay all right and um the um and so dad and brother somehow in combination, if they were to buy you out, would need to come up with a fourth of $120,000, so $30,000. Correct. Okay. Minus if you were to sell all the properties, you'd have expenses, so your fourth is probably worth $25,000 or less. Yeah. Okay. So they can't come up with $15,000?

Doesn't seem like it. Okay. It's not being, when we presented it, we'd just gotten back, no, it's not possible. Well, obviously you're not the one to push this. It would be your husband because it's his family, right? Right, right, absolutely. I think he just gets on the phone with both of them and says,

Guys, look, we don't want to be in this anymore. And so we need you to put something together. We will accept a deep discount. And so, I mean, we'll take $15,000 for our 25%, which is half off, you know. Mm-hmm. But we need out. Yeah. And you guys run down to the bank and pick you up a little loan for $15,000 and buy us out.

Or, you know, buy us out over a two-year period of time. Give us $7,000 this year, $8,000 next year, and we'll call it even. Mm-hmm even or whatever. I mean, but discount it and make it to where it's a great deal for them, but it gets you out because there's more to this than just the money. There's the frustration with your lack of control, and you feel like you're kind of being jerked around a little bit in a little bit of a southern, passive-aggressive way. And I could hear that in the way you were describing this.

So you were being very sweet, but that's what's going on, too. So it's worth it to get out of this. It's going to be good for your relationship to be clear of it. And I think your husband just pushes this a little harder with his brother and his dad on the phone. Or next time you're down there, one of the two. This is The Dave Ramsey Show. our scripture of the day proverbs 12 11 whoever works his land will have plenty of bread, but he who follows worthless pursuits lacks sense. You know what? I have done both.

You ever followed a worthless pursuit? Actually, I did that last week. I actually watched about two hours of television. That was like following a worthless pursuit. It was watched about two hours of television. That was like following a worthless pursuit. It was a complete freaking waste of time. It was like eating two pounds of cheesecake. It was just, you know, you're just sick when you're done because there's nothing good has gone into your body or your mind. I just completely wasted two hours of my life. I'll never get back. I followed a worthless pursuit.

But whoever works his land will have plenty of bread. But he who follows worthless pursuits lacks sense. So I guess the key to that is spend more time working your land than you do following worthless pursuits, and you'll come out ahead. Because we all do a little of both you know it's just the ratio right is it more working and less worthless pursuits or more worthless pursuits and less working yeah there's your problem bob hope said it this way i've always been in the right place at the right time of Of course, I steered myself there.

Yep. Yeah, that luck thing, it always comes with work, doesn't it? Reese is with us in New Jersey. Hey, Reese, how are you? Hi, Mr. Ramsey. I just have a quick question for you. I've been juggling the idea back and forth in my head of getting rid of my current vehicle and downgrading to a cheaper one in hopes of expediting my baby step two. I just kind of wanted your thoughts.

What do you owe on it? I owe $14,500. What's your income? $49,000 in my main job and then $5,000 in a side job. Good for you. How old are you? 26. Good.

And how much other debt other than the car? This is where it gets kind of sticky. The majority of my debt is student debt, just shy of $47,000. Okay. That's it. What do you owe on the car? $14,500. Oh, you owe $14,000. that's it what do you owe on the car uh fourteen thousand oh you owe fourteen what's it worth uh it's worth kelly blue book i just checked thirteen thousand so i'm upside down one thousand five hundred okay all right so if i just do i do big number math is

the way i do this here's how it works okay so i got 14 and 40 is 54 in debt right uh yeah 45 for the student loan oh i'm sorry okay so 59 59 60 in debt okay and you and you're making you said uh 40 plus the part-time job right uh yeah 49 plus five for a total of 54. Okay. So if we pay off $30,000 a year for two years, you're debt-free. Out of 54, you're 26 and single. That's beans and rice. You can do that. Yes, sir. Or instead of paying off 30 in two years, you could pay off,

what would it be if we took that 14 off, right? That'd be seven less a year. And so instead of 30 a year, it'd be 23 a year. So it's $2,000 a month if you don't keep the car. It's $2,500 a month if you do keep the car. If you're unwilling to cut your budget that deep, you should sell the car. Okay. Because I would want you to be debt-free in two years.

So I'm doing some very simple math there. Are you following me? I mean, there's nothing, no rocket science involved here. No, no, not at all. I'm taking your $54,000 income and putting you on no life budget either way, really. And so the only question is, are you going to be out of debt in 18 months or in two years? Do you like the car a lot? Yeah, I really do like it a lot.

Cool. And what kind of car is it? Toyota Corolla. That's a good car. 2014. Yeah, yeah, it's not bad. They're good cars. Exactly.

That's kind of my – sorry, go ahead. No, it's okay. If I'm in your shoes, and that's the way I answer questions here, I would be willing to cut my lifestyle in order to keep my car. Okay, that's kind of my thought process because it's like I can sell it, downgrade, gets me out of debt maybe six to eight months faster. Exactly. But I'm out of debt with a hoop six to eight months faster but exactly i'm but i'm out of debt and with you know with a hoopty as opposed to you know eight extra months and i have a car that

should in theory last another 20 years i don't know if you go that far but it'll last a lot longer than a hoopty and you won't turn around move up in cars as soon as you finish that snowball so your theory is right except for that last little bit. But the, yeah, and here's the thing. You just got to commit to $2,500 a month. Okay. That's $30,000 a year. That's $60,002. And so, and until I get to that, we don't eat out unless you're working in a restaurant, you know. And we're not going to the movie unless you're working there.

And you're not going to spend any money. You don't have any money. You're getting out of debt. So you're going to sacrifice social life party time whatever it is you do with money that you used to do with money and you're going to put all your freaking money on this and you're going to be done by the time you're 28 can you imagine what it would be like to have no payments in the world i literally can't imagine you're on your way brother you're going to do it and i'm going to get to talk to you you're going to call me back and do your debt-free scream right here.

I can tell. I'm coming down to Nashville for that. I love it, man. I'll give you a personal high five. Love it, man. Awesome, man. Get after it, brother. You got this.

Jordan is with us. Jordan's in Bloomington, Indiana. Hi, Jordan. How are you? I want to be better than I deserve. Good for you. How can I help? I am a 25-year-old husband to a wonderful wife and a three-month-old baby girl that we have.

Life is good. Yeah, life is great. But we're about $56,000 in debt. Whoops. I'm making about $56,000 in debt. Whoops. I'm making about $39,000. All the debt is 75% to 80% of it is mine personally with student debt. Then joint combined we have the hospital bill, which we have enough to pay off right now. And we just got a new car because the only car that we had had no AC.

So we had to have that one for the baby. So how much did you spend that you didn't have to spend? What's this car cost? Actually, we're not doing bad. It's $8,500. Okay. All right. Is all that we have left on it.

Okay. And we just bought it before the baby came. Okay. All right. Number one rule, if you're going to win with money, no more justification buying stuff for babies. Fair enough. Babies have survived centuries without air-conditioned cars. And you could have bought a car cheaper than that.

You used the baby as an excuse to do something that you couldn't afford to do. I've got air-conditioned cars. And you could have bought a car cheaper than that. You used the baby as an excuse to do something that you couldn't afford to do. It's behind us now, but going forward, no more rationalization using the baby. It's not fair to the baby. Don't blame stuff on the baby. So just start working your dad's snowball. Start working your baby steps. You can do this.

Yep. So right now I have pretty much we're putting about 310 to 325 in our student debt. Two of them are personally in my name and then the other one's in my father's. It's the parent plus loan, which I hate. If I would have known how much student debt I would have racked up. Okay, Jordan. I don't want to run out of time. What's your question?

Question is, what can we do to get this down? I want to be debt-free by 30. Okay, how old are you? 25. Oh, you're going to make that easy. You're going to make that easy. You're just going to have to work like a crazy man, live on beans and rice, rice and beans,

get the every dollar budget going, and get on your phone with your wife. Sit down. Both of you set the goal and say, we're going to live like no one else so that later we can live and give like no one else. But we're going to pay a price. We've made a mess. We've got car debt. We've got student loan debt.

We've been sloppy and disorganized. But now it's grown-up land. Now we've got baby. And now we're going to start being grown-ups. Adults devise a plan and follow it. Children do what feels good. So you're going to sit down, get your budget going, and your budget's just where you make every dollar behave. You squeeze it by the neck until it can't breathe. You make every one of those dollars behave. You list your debts, smallest to largest, and you pay them off in that order. Pay minimum payments on everything, and attack the little one and work your way right down. I'm going to send

the baby a gift. It's the total money makeover book for his dad and his mom. So hold on. Kelly will pick up and we'll send it to you. It'll show you exactly how to do this stuff. That puts us out of the day. Ramsey showing the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.