The Ramsey Show - App - How to Avoid Buying A House You Can't Afford (Hour 3)

Episode Date: July 19, 2018

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🎵 Live from the headquarters of Ramsey Solutions, 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. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Megan is with us in Washington, D.C. Hi, Megan. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much for taking my call. Sure. What's up?

So I have a question. My husband and I are obviously in a high cost of living area, and we have about 10% saved up for a home, which is about $53,000. I'm wondering if we should buy a house if the mortgage would be 25% of our take-home income right now, but our income might fluctuate because I'm self-employed and my income is subject to change, particularly when we have a family. So in that case, would renting be better, or should we make sure to put more than 10% down on a home to lower the monthly mortgage? What does your husband make, and what do you make? Take-home. Gross. Gross.

My husband makes just over $70,000 and I gross about $120,000. Taxable income, your $120,000 or gross revenues for your business? Gross revenues for my business. Oh, no, no. What are you netting? What's your net profit on your business before taxes? This year it's going to be about $80,000. Okay. So it's about $50,000, $50,000, give or take. Half the household income is you and half of it's him. Yes.

Okay. All right. And you don't have children. No. And you're how old? I'm 24 and he's 25. Okay. So what's your best guess on when you're going to start having

kids um we would hope within the next like three to five years okay and what's your best guess on um what that would do to your income so i'm a wedding photographer and I'm not sure I could handle as many weddings, like just the physical demand of the job. I also edit for other photographers about something a little more that I could do at home that I could try to take on. When you say physical demand of the job, do you mean time? No, not time, just like on my body. So shooting a wedding, like eight months pregnant on like a 10-hour day i'm not sure yeah but i'm saying after the babies are there oh and you've got if you've got a three-year-old that you you have you know you should be back to your ability to shoot again but the only

constraint might be time yes okay all right so we don't know is the answer. All right. But you think it's a minimum of three years and you're 24. I'd buy the house now based on your income. Now, if you get out there and you're 27, 28, 29 years old and you have a baby and you decide, I don't want to work. I'm going to stay home with the baby. Then you're going to sell your house. But that's not the end of the world. You will have owned it three or four or five years, sell it, move into something you can afford to live in,

in order to adjust to your new income with your decisions based on your family. But you've got time. There's no reason you can't buy a house. You're not going to live in this house 50 years anyway. The average person's pays off or the average mortgage lasts 5.6 years and the average person stays in a home less than seven years. Okay. That's the average.

So you would say sell the home to downsize? If you have to. Okay. We don't know what's going to happen when you're 29. Right. Five years from today. Except that there's probably some babies in the future, and they're probably at least temporarily going to knock out some of your income,

but we don't know what's going to have happened to his income during that five years. Right. There's too many unknowns to say don't do it because it might go down five years from now. If it does go down and stays down and his income hasn't come up, he makes $70,000 and you bought a house based on $150,000 income, you're selling the house, right? Yes. But that's not the end of the world. I mean, you could just move and get you a place you can afford because you want to stay home with your baby. There's nothing wrong with that.

You just adjust your lifestyle to fit your income. But, you know, don't be one of those people that's so foolish you think you can do both. I can live on half my income and keep a house payment that's now 50% of my take-home pay. That's called stupid. But that's five years from now. You don't have to decide that today.

Go buy a house. Okay. But be willing to sell it and move if you need to for the good of your family later. Okay. If the mortgage is going to be like $400,000. It should be a fourth of your take-home pay on a 15-year mortgage. If it's more than a fourth of your take-home pay on a 15-year mortgage, you're buying too much house in any situation.

But today, you've got a $150,000 household income. You can afford a $400,000 mortgage. Kyle is with us in Minneapolis. Hi, Kyle. Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing? Better than I deserve.

What's up? Just a quick question. I was wondering if I should move out of my parents' house or if I should continue my current track of funding by Roth IRA. How old are you? 19. Okay. Are you going to go to college?

Yeah, I'm currently enrolled. Oh, you're in college? Yep. Okay. I wouldn't fund a Roth IRA while I'm in college. Who's paying for college? I am. Okay. I wouldn't fund a Roth IRA while I'm in college. Who's paying for college? I am. Okay.

I wouldn't fund a Roth IRA while you're paying for college. How are you paying for college? Just cash flowing. Good. So you're working all the time? Yep. Okay. But you got no overhead because mom and dad, their way of helping you in school is letting

you live there while you're in school. Yeah. Nothing wrong with that at all, my brother. I think you're doing great. You're a hard working Yeah. Nothing wrong with that at all, my brother. I think you're doing great. You're a hard-working dude, but I wouldn't fund a Roth IRA. Your main – listen, a Roth IRA is an investment, Kyle. An education, assuming you're studying something that actually has marketplace application and you're not overpaying for it, is an investment.

What are you studying? General business. Okay. And what year are you, first or second? I'll be going into my second year. Okay. All right, getting ready to be a sophomore. Okay, good.

And you're in a state school or what? Yep, state school. Good for you. Okay, so you're going to get a business degree, a general business degree, and you're going to have paid cash for it while living at home. That is going to give you a better return on investment than any mutual fund in the world. You are a better investment than a mutual fund is. So I want you to take care of you getting out of school for the next four years. I want you to pile up cash as high as you can pile it up to ensure you go through school with no debt.

You go through school, through school with no debt. You go through school. You graduate with no debt. That's all I'm concerned about for the next three years. You've got plenty of time to do a Roth IRA starting at 22, 23 years old when you get out of school with no debt. And you'll be able to do it almost instantaneously because you've gone through school with no debt, working. Way to go man you're killing it awesome so proud of you very very well done this is the Dave Ramsey Show Thank you. Okay, I need you to listen to this.

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You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best deal. Today's question comes from Chris in Utah. What do you do and how do you hold on to hope when Murphy keeps coming around to visit? When real emergencies like medical problems and exploding transmissions keep wiping out your emergency fund for the tenth time and sending you further into debt. I've restarted Baby Step One so many times I'm losing hope that I can get out of debt. Hmm. I can get out of debt. You're in drama mode, Chris. You have not restarted the emergency fund 10 times.

You've restarted it three or four times. But you're still on a point that you're losing hope, and that's causing your drama and your exaggeration. What happens with the thing called momentum? Momentum, when somebody has momentum, it's a weird thing. You ever had momentum in an area in your life? Like if you play sports where you're playing a particular, that night, that day in that game, everything you did worked. Like you were in a zone.

You had momentum. You ever been in a zone. You had momentum. You ever been in a section of time with your marriage? There was a time, a particular season of your marriage when you had momentum. I mean, things were awesome. You have seasons when it's not, but I mean, you have the season when it's awesome. Season in your career where everything you touch turns to gold. You're in a zone. That's when you've got momentum.

When you have momentum, you are not as good as you look because you look so good. When you don't have momentum, it's the opposite. Everything you touch turns to poop. Your life looks like a country song. You can't do nothing right. Everything you say makes her mad. Everything you do with the career makes the boss mad. Everything you touch, you lose money on it. Everything that can break, I mean, your life looks like a country song, you know? And when you don't have momentum, Chris, which is right

where you are, you're better than you look. Things are better than they feel. Your feelings will lie to you in both of these cases. They tell you you're better than you are when you got momentum, and they tell you you're not worth dirt when you don't have momentum. I remember being down, and we're filing bankruptcy, and lights are cut off at the house and they're coming to cut the water off. And the dadgum air conditioner went out. I got sweaty babies and a sweaty mad wife. Everything was awful.

Two years before I was a millionaire. And there I sit, bankrupt and broke. Now, had my brain completely quit working? No. The same brain I had two years before. Had the same physical capacities I had two years before. I had the same everything, except the circumstances around me did not indicate anything except that I was completely stupid. Now, I had done some stupid stuff that put us there for sure.

But, you know, it's weird. It's like, what if I said, open this envelope, and the envelope says, you just won a million dollars. Oh, my gosh. And then you turn it over and go that's a lie see how your feelings lie to you your circumstances cannot dictate whether or not you are going to win and that's where hope comes from it's part of where hope comes from it's a type of faith. You spiritually have faith, faith in God, and God loves me and he's going to walk with me through these hard times. And sometimes I can just have faith and go, you know, I am smarter than all this poop around me looks. And that's where you are right now, Chris.

You keep doing smart things over and over and over again, even though the particular circumstances you're sitting in don't say that everything's okay, and you'll walk through this. It felt like when I did not have an emergency fund that all I had was emergencies. And then when I got a little emergency fund, I noticed I had fewer emergencies. When I got a large, fully funded emergency fund of three to six months of expenses, I have never had an emergency since, hardly. Almost none. It's almost as if I quit having emergencies when I got a little margin, when I got a little distance between me and that run of garbage. So, I know you're scared, but you're better than you look Chris you're

better than you look you're better than you think you are you're in better shape and doing smarter things and moving in the right direction don't stop doing that don't lose hope proverb says hope deferred makes the heart sick But when desire comes When desire comes That is the tree of life So I got you I understand Been there done that

I've been scared Didn't think I was going to get out ever Didn't think I'd ever get back up on top again But you will Keep doing smart things Even though murphy seems to be setting up residence in your house and eventually you'll look up one day murphy moved out and you didn't even know he left wow look at that hasn't anything happened in a while you won't even notice it it'll be so subtle and so incremental you will begin to win death by a thousand cuts.

You won't win in one fell swoop. There won't be one moment where you get struck by lightning and win the lotto. That's not how people win. People win by a little bit, a little bit, a little bit, a little bit, a little bit, a little bit, a little bit, a little bit. If you keep taking steps, you can go anywhere. It's not impressive. You're not going to be on the cover of Fast Company magazine,

but who gives a rip? People on the cover of Fast Company magazine three years later are broke. A little bit. Baby steps. One at a time. Keep pushing it. You got this, Chris.

We got your back here. Jacobson, Wichita, Kansas. Hi, Jacob. How are you? Hi, Dave. How are you? Better than I deserve. What's up?

So I'm a little bit different from your normal type of caller. I'm 16. I'm in the aftermath of Financial Peace University. My parents went through it, and I'm starting to learn this stuff because they wanted me to know, so they didn't make the same mistakes, and I was wondering what I should learn. The things they want you to know so you don't make the same mistakes. What do you think they are? What have you learned so far?

Definitely invest. They've kind of hopped off it a little bit because they're still not debt-free. They still got the mortgage and some car payments and whatnot. They hopped off. You mean they're not getting out of debt anymore? They don't have gazelle intensity anymore. Okay. So you know what that is?

Yes. Okay. Why do you think they need gazelle intensity or that you might what that is? Yes. Okay. So I started trying to learn. Why do you think they need gazelle intensity or that you might need it later? The cheetahs come in. I don't know. Credit cards and debts and all these tricky things that you have to learn just so you can stay out of debt. You don't borrow money, you're not in debt, right? Mm-hmm. If you't borrow money, you're not in debt, right?

Mm-hmm. If you pay off debt, you're not in debt, right? Yes. If you do those two things with intensity, that would be what we call gazelle intensity. Does that sound right? Yes, it does. Why are we avoiding debt? Because it puts financial strain on you and anyone that you are with.

Good. Why else? Mathematically, why would you not borrow money even if it puts strain on you, if it causes you to win? So you can build self-wealth. Yeah. Okay. Good.

That's it, man. I think you know the stuff. If you live with a plan, that's called a budget. You live on less it's it's if you live with a plan that's called a budget you live on less than you make so you're saving money you're always giving some money and you avoid debt if you'll keep working with those basic principles you'll become wealthy over time sir and that's what they're wanting you to learn even though they're not modeling it well for you i mean hey you guys you're 16 yearyear-old's watching, by the way. Your 12-year-old's watching.

You want to teach them how to handle money? Rachel Cruz says it all the time. More is caught than taught. They're going to do what you do, not what you talk about. Don't smoke pot. Hey, pass me a joint. I mean, seriously. Come on, people.

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Open phones at 888-825-5225. James is in Atlanta. Hi, James. How are you? Hey, Dave. It's an honor to speak with in Atlanta. Hi, James. How are you? Hey, Dave. It's an honor to speak with you. You too, man. What's up?

I had a question for you on tax withholding. I am 29 years old. My wife and I are on baby steps 4, 5, and 6, and still motivated to look and to squeeze every dollar out of every month. And I'll give you real numbers from last year. My base salary was right at $76,000 for the year. And then at the end of the year, I get a profit sharing bonus, and it was around $16,000. And it's paid in a normal paycheck. So the taxes were, you know, four and 5,000 on federal two and 3,000 on state, which is roughly what I got back on my refund.

So my question is... You got $4,000 back? On my federal taxes, yes, sir, and around $2,000 on state. So I'm having a hard time kind of gambling that that profit sharing may not be the same every year. So according to the IRS website, the way my withholding is right now, I should get like a $500 refund pretty close to breaking even. But when that bonus at the end of the year, it just spikes it way up. So I don't know if I just kind of let it be or if I gamble a little bit and say that I would owe the federal government a

thousand and hopefully be able to cover it with the bonus. How much is in your emergency fund? $15,000. Does your wife work outside the home? She does, but it's for our church, and her income mainly just covers daycare so that she can work at the church. Okay. All right, that's fine.

I'm just trying to figure out what we're dealing with. So we're basically dealing with, you know, a $90,000, $95,000 income, depending on what your bonuses are. Right. Okay. Good. Good. All right. And you have how much again in the emergency fund? $15,000. Okay. So you can play it either way. I think you've got the point the point is don't plan a big refund every year and call that smart because that basically is a savings account with the irs at no interest and they send it to you after you file your taxes and santa claus does not live in washington dc the reason

you got a tax refund is you paid too much in you figured this out right so you're trying to just balance that out um how predictable are these bonuses uh they've gone up every year so right now they're unpredictable but in a good way for how many years uh over the past three years my first bonus was 5 000 the next one was around 10 and the next one was around 15 because i've got a promotion each year. Is there any reason to think it won't be at 15 or greater this year? I would be comfortable planning on 10. 15, I think, was an abnormal because I talked to my boss about it. Just said, whatever I did, I want to do it again. That's fine.

Yeah, really. That's good. Good for you. Well, I mean, yeah, so plan it out at 10. Okay. It sounds like your best forecasting technique is to extend the past into the future, plus or minus any variables that are known. Okay? Okay.

So we've got a trend here that it went from 5 to 10 to 15, but the variable that is known is, we don't think that 15, we think that's an anomaly. It's probably not going to be 20. It's probably going to come back down to the 10 range or somewhere in there. Talk to our boss. We figured that out. That's kind of what's going on. So it's kind of leveling off, so to speak. So why don't you run the numbers out at 10, and based on that, set your withholding up to where you break even.

If you're off a little bit, you've got the money to cover it. You're not going to be in the poorhouse here. Yeah. Worst case scenario, you pull $500 out of your budget and pay it. Yeah. And, you know, if you've got to pay in, you just wait until April 15th anyway. So you've got from January when you prep your taxes all the way to April, making $90,000 a year to come up with $500 to $1,000.

I think you can do that. Yeah. That's like your worst-case scenario here. Okay. So you're doing really – this is how you win. You're doing smart stuff here because all you're doing is you're asking the right questions and you're learning to think critically about this. I mean, you're learning to make your own good decisions.

You're learning what wisdom looks like, and then you can pull the trigger on this. So you already had it narrowed down. You just want to talk your own good decisions. You're learning what wisdom looks like, and then you can pull the trigger on this. So you already had it narrowed down. You just want to talk it through with somebody. And all I'm doing is speaking into something here. So you know what to do. It's just, you know, but forecasting is just, I wouldn't say go crazy and say, oh, I'm going to get a $20,000 bonus. Let's figure it like that because you may end up running a $2,000 check to the IRS. That could be strenuous.

Okay. But on the other hand, I don't want a $3,000 refund either because I didn't plan on any bonus. You know? So that's kind of the way we're backing it off, back and forth, back and forth. The other thing is 2018 tax rates are down. You're going to pay less taxes in 2018. We have a new tax law. You used to be in a 25% tax bracket where you are.

Now you're in a 24%, but hardly any of your income is in the 24%. Almost all of your income is below that because we have marginal tax brackets. Plus, you now have $24,000 in standard deduction, married filing jointly, that you're not going to pay taxes at all on that $24,000. That's new for 2018. So your tax bill is going to go down at all on that $24,000. That's new for 2018. So your tax bill is going to go down for 2018 because of the new tax law also. So that comes into this equation too. So that's the way to do it. The only pure way to get your stuff dialed in exactly is if you know exactly what your income is going to be

and you go to your tax person and you calculate exactly what your taxes should be based on that income, based on the current tax law, and then divide that per paycheck and have that amount withheld. That's perfect withholding. If you say you have a $6,000 tax bill, you have $500 a month withheld, you're done. You'll be exact. You won't get a refund and you won't owe a dime because you figured out what it's going to be. That's the only way to do it perfectly.

Chris is in San Antonio. Hi, Chris. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up? I've been listening to you for quite some time now, and I hear you mention that when purchasing a home,

you should purchase a home that's within a fourth of your take-home pay? Yes, sir, on a 15-year fixed. My question is, does that include taxes and interest? Yes, taxes and insurance. Okay. P-I-T-I. But it's not a perfect formula. Okay?

And so if you buy a house that's 27% of your take-home pay, are you going to go broke? No. Okay? It's a rule of thumb because most people buy too much house, and they buy it on a 30-year adjustable rate mortgage in an increasing interest rate environment, which would be stupid about three different ways. Right? Got it.

Because they need a skylight and a jacuzzi. That's what most people do. So all I'm trying to do is I don't want you to look up and go out my house payment so stinking big i can't afford to save up and buy the next car so now i got a car debt oh now i got a car debt and a house payment so stinking big i can't breathe so i don't save for my kids college now he's got student loans oh i can't do anything and i feel trapped so now i'm going to go on vacation put on a credit card because i have a big car payment my kids got student loans and i got a big house payment and i can't breathe that makes you a normal american you don't want to be that guy that's what we're trying to avoid you

follow me i do yeah so it's all about just being weird so i mean you can do whatever you want to do but try to just don't be house poor but i mean the number of people i talk to chris that their house payment is 45 of their take-home pay like every week on this show for 30 years and they're scratching their head can't figure out why they're freaking broke because they're living in it you know that's all we're doing so it's not a perfect formula and yes it's taxes insurance because you're going to write this check every month and and then you've got 75% of your income to buy lights and water and food and save and invest and give, and you're going to win. You know? And that's where you are.

So you're doing good stuff. You're going to win with that. That's where the idea comes from. Don't be house poor. But it's not a perfect formula. It's like, you know, if you just don't know, we would never do 26%, 26.5%. You're over the pale. You're going to go bankrupt.

That's not what I'm saying. But, dude, when your house payment is 40% of your take-home pay, you can't prosper. You don't get any room. You can't breathe. And you're going to end up in debt because you're going to rationalize your butt off like most people do. So that's all we're trying to avoid is that. Just don't be that guy. And I don't think you're going to be

since you're smart enough to ask the question. So, hey man, thanks for being a listener. This is the Dave Ramsey Show. Did you catch the news story about hackers targeting schools and stealing students' personal information. Cyber thieves are preying on our school's outdated systems to get students' names, birthdates, and social security numbers, which is everything needed to steal their identities. Kids are the perfect victims, since typically no one finds out about the theft for years. It's happening all over the country and shows that no one is safe, not even our children. This is what makes Zander's ID theft plan such a great value.

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For God has not given us a spirit of fear, but of power and of love and a sound mind. Nelson Mandela said, I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear. Have you ever been afraid? No, I'll have. The question is not whether you're going to have fear. The question is whether it's going to be debilitating. A little bit of fear is good.

It keeps you driving on the road instead of in the ditches. It keeps you from touching hot stoves. A little bit of fear is good. It keeps you driving on the road instead of in the ditches. It keeps you from touching hot stoves. A little bit of fear is called wisdom. But fear that shuts you down is toxic. We keep living the way we're living, we're going to be broke. That's a good kind of fear. We keep spending like we're in Congress, our kids are going to be skinny. That's a good kind of fear.

What if you could change the way you handle money and how you feel about money? Well, you can. Knowledge does that. Knowledge is powerful. One way you get rid of fear is you know something you didn't know. Because fear sometimes is you don't know. And, man, if you don't know, it's scary.

Financial Peace University is our step-by-step program that teaches you how to get out of debt and how to get on a budget and how to pay off debt and how to pay off debt and how to pay off debt. Why? So that you can invest more. Why? So you can give more.

How much fear would you have if you retire with no money and you had to count on social insecurity, the government's program? Versus if you retire with $2 million. Who has more fear? Kind of a no-brainer, isn't it? How do you get $2 million?

You quit giving all your money and all your hard work and the sweat and all the work you've done to other people called banks. You ever notice those big buildings in the skyline? You built them. Where do you think their money came from? Santa Claus doesn't live there. You gave them your money in the form of car payments, in the form of a boat payment.

I had to have an air conditioner. I had to have a new bed. I had all the stupid butt stuff we say to ourselves. And we go buy stuff we can't afford with money we don't have to impress people we don't even really like. So this week, during Prime Week, we're offering Financial Peace University for only $119. The Financial Peace University $119 is a one-year membership. That's a deal.

It includes every dollar plus. It includes one year of access to the Legacy Journey videos, to the Financial Peace University videos, and you can join a group and take the nine lessons in person and you should that it that that's the issue so 119 bucks this is how you get rid of fear 119 dollars doesn't do it going to financial peace university doesn't do it learning the stuff and applying it to your life and putting your life in a different position. I am not afraid of things financially today. When the stock market was crashing and the world was coming to an end in 2008 and people were freaking out and the world was coming to an end, I wasn't freaking out.

I didn't have any debt. You don't have any payments. You're not worried. It's hard for them to take your stuff if you don't have payments on it. I knew nobody was going to call me from the repo company. If American Express calls my house, it's what's called a wrong number. I don't have an Amex card. I don't have American distress.

See, you make decisions with knowledge that puts you in a place where you don't have that same fear. Just like that. Now, you can't alleviate all fear. We all have fear. But some areas of our life, we can learn some things and do some things differently as a result of that knowledge. And it's called changing your life. That's what it's called. Kirsten's in Aiken, South Carolina.

Hi, Kirsten. How are you? I'm great, Dave. How are you? Better than I deserve. What's up? I'm actually looking for some advice. My fiancé and I, we have been looking a lot at your stuff, listening to podcasts,

and he seems, I want to say, less than half on board, and I am trying really hard to get him motivated. How old are you? I am 28. How old is he? 36. When will you be getting married? You know, any random Saturday that we decide. We have, you know, two small children, and really just putting it off for no good reason.

Okay. All of our, everything is combined. We share a house. Oh, okay. So you're already shacked up. You've got kids, everything. You're everything but just got the piece of paper. Go get married.

My gosh. Yeah. All right. So you're already doing it all. I mean, my God. So anyway, so your husband, as of next week, is not on board, but you just discovered all this stuff, and you have all this new information that you didn't have six months ago.

More or less. And he still has it. You've consumed a considerable amount of this information that he's not consumed. Yes. So you can't expect him to come to the same conclusions you're coming to. Correct. So how are we going to get him to consume the information? Other than listening to the podcast while he's in the car.

That's one way we could trick him. Another way is we could trap him and he's in the car. That's one way we could trick him. Another way is we could trap him and trick him in the car. That's a possibility. Okay. Another possibility is to put the kids to bed, turn off all the televisions and the radios, take his two hands and your hands and look into his eyes and say, this matters a lot to me.

And if it matters a lot to me and you don't do it, it's going to start to matter to you. You think you get the hint? I think so. Yeah, because he cares about you. He loves you, right? Yes. Yes. I think he, in his mind, he says it'll take seven years.

Yeah, because he's a genius, but he's a broke genius. Right. So I don't care what he says. He's wrong. He doesn't know what he's talking about genius right so i don't care what he says he's wrong you know what he's talking about he sucks at money he has none his opinion's invalid that's true okay so it's not a bad guy it's just you know we don't ask a fat people fat people about dieting all right so that's what it comes down to so just sit down and and say, baby, this matters a lot to me. You and I are going to get married next week, and we're going to Financial Peace University.

Dave gave us a wedding gift because I'm going to give you a wedding gift. I want you to go to Financial Peace University as my gift. Thank you. Would you go to the class, and can you get him to go to the class if I give it to you for free? Yes, I believe so. You better. That's the condition of the gift. Yes, I can do that.

Because I've got to tell you, if you go without him, let me tell you what's going to happen. You're going to kill him. You're going to get madder. You're going to get madder and madder and madder. It's not a good idea for you to go by yourself.

You need to go with him. Okay. So get married and go to class. Hold on. I'll give you a copy of the... I'll have you sign up with Kelly. She'll get you all signed up. We'll get you the one-year membership for Financial Peace University, every dollar plus.

Everything's online, and you go to the group locally there in your area. A ton of them all over South Carolina. Easy for you guys to get into a class, and lots of wonderful churches there would welcome you guys into the class. So you hold on. I'll have Kelly sign you guys up. Thank you. Thanks you hold on. I'll have Kelly sign you guys up. Thank you. Thanks for calling in. Open phones at 888-825-5225.

Stephanie's on Twitter. Dave, is it better to withdraw from a 457 for an emergency or use a credit card? Okay. Anytime you present me two stupid ideas as your only two choices, that means you need more ideas. Using a credit card, obviously, to go into debt to cover an emergency is not something Dave Ramsey is going to recommend. If you've listened to me more than 13 seconds, you know that. And cashing out your retirement plan, unless it's to avoid a bankruptcy or a foreclosure, is not going to happen. So how else are we going to skin this cat?

How else are we going to be able to work our way through this problem? What are our other options? Let's have a garage sale. Take the coin collection out of the safe and go sell it. Put dog on eBay and the cat on Craigslist. Go work an extra job. Go work three extra jobs. Buy a leaf blower. Rich people are afraid of leaves.

They'll hire you to blow their leaves. Fall's coming. It'll work. This is the kind of stuff you do when you have a crisis. That puts us out of the Dave Ramsey Show and 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.

Hey guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. Hey, this is Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors. Some of these guys are just scum. But then there are the collectors that are just plain crooks. These are the guys that take it a step further and they violate the Federal Fair Debt Collection Practices Act on a daily basis. They're breaking the law and they need to be stopped.

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