The Ramsey Show - App - How to Budget on an Irregular Income (Hour 1)

Episode Date: August 6, 2019

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

Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, 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.

Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. All right, up first this hour is going to be Adam in Texas. Hey, Adam, welcome to the Dave Ramsey Show. Hey, thank you, Dave. Hey, what's up? Um, to keep it to the point. Um, so me and my wife are $200,000 in debt, including our house. That's all credit cards,

everything, 200 grand. And, uh, she's getting in a couple months, she's getting a inheritance from her grandparents, which is going to be about 200 to 250, give or take. And we want to know if we should just pay off all of the debts

and have a little bit left over, or just keep our mortgage as we pay it ourselves and pay off all the other small debts. Well, anytime I get money from any source, even though this is a huge amount of money and it's a blessing and it kind of throws you off kilter, kind of knocks you back on your heels, I'm still going to walk right up the baby steps. And so 15% of your income going into retirement, you're debt-free,

you have your emergency fund in place. That moves us to kids' college. Do you have children? Yes, sir, I have two. What ages? We have three years old and six months. Okay. And what's your household income?

Household income right now is anywhere from $55,000 to $60,000. Okay. Are you through borrowing money? I told my wife, man, I said, I'm done. If it doesn't have cash with it, I'm not doing it. I'm not doing it ever again. I'm not taking out a mortgage. I'm not taking out credit cards.

I'm not doing nothing. If I don't have cash, I don't need it. Okay. So you're both committed to that plan? Oh, man, tenfold. Because to pay off all of your debt and then go back in to buy a pickup truck would be dishonoring to her grandparents' memory. Oh, no, no, no, no, no, no, no.

There's no pickup truck. No, I'm just saying, if you come up four years from now and you do that, you will have messed up this whole thing. Oh, I completely agree no no what i'm aiming for is probably a 2000 buick park avenue okay but you see what i'm saying my point is not that you can't drive a nice truck my point is you have to pay cash for everything from this point forward because you don't even have a house payment now and you have an emergency we haven't done any i know but when you when i'm finished with you you're going to be debt free oh you're done right you're done right yeah so write a check when the money comes in pay off your house and pay off the credit cards cut up the credit cards make sure you're on a budget make sure you're funding

your retirement make sure you start funding your kids college because now you don't have a house payment you don't have a car payment you don't have retirement i mean you don't have a credit card debt you don't have any debt and um that that's the whole thing so you can't um you know that that you cannot go back if you do this but that's it is the smart way to go and if you use this as a jump start it will change her grandfather's family tree your family tree uh and that is the way to go so good question thank you for joining us open phones at 888-825-5225 you jump in we'll talk about your life your money jim is with us in boston hey jim welcome to the dave ram Show. Hey, thanks. Appreciate it. Sure. What's up? Just recently accepted a new job, and that new job's going to have a pension that comes

with it. I don't have a whole lot of details because I haven't started there yet, but I'm a younger guy. I'm 30, and basically everything that I can remember hearing ever about pensions in the news has always been negative because companies always seem to be squandering them or taking them away. And I'm doing pretty good right now, so I'm 30. I got about 145,000 saved up in retirement right now. Good. Moving pretty well. And, you know, I've done so well, I don't want to roll this into a bad move and then risk, you know, all the potential that I have in the future. So just wondering if pensions are still a good way to go for companies that offer them or if I should just stick with the IRAs

that I'm playing in now? Well, there's no reason you can't do both. They're giving you the pension. You really can't do anything about it. They're going to give you the money, and it doesn't cost you anything. They're not taking any money out from you to put it in the pension, are they? Yeah. I don't think so.

No, like I said, I've never had one, but my generation never really gets those. Right. I agree. I agree. It used to be pensions were what everybody did back in the day, but nowadays it's almost all 401ks. So either way, if they're furnishing you a pension, that's like free money.

You don't count that anyway. And so let's just keep doing what you've been doing, which is investing in good mutual funds and IRAs. And they may have a 401k in addition to the pension, do they? I'd have to look. Like I said, I just accepted this job yesterday. Oh, good for you. Thank you.

Appreciate it. What are you going to be doing? I'm in sales. Okay. So just moving from one company to another, but yeah. Good for you, man. Well done. Okay.

So, yeah, I take the pension, and I would keep doing 15% of my income if you're at baby step four into IRAs and 401ks and good growth stock mutual funds. Richard's in California. Hi, Richard. Welcome to the Dave Ramsey Show. Hey, Dave. How's it going? Better than I deserve.

What's up? I got a quick question for you. I just finished my undergrad degree at a state college. I'm moving into my graduate degree. I am about $25,000 left in debt. All student loans. I've been following your program here for about a year. Okay. And I'm at this crossroad where I'm trying to figure out between the state school that I graduated from with my undergrad or the private school,

which I really want to go to for my MBA. So what does the MBA cost at each? Well, fortunately for me, my job pays for my MBA, but I have to pay the taxes. So the state school is going to cost me about $10,000 in taxes, and the private school is going to cost me about $19,000 in taxes, close to $20,000, so almost double. Okay. And so it's double the cost to go to school there, obviously. Yes.

Okay, so why is it worth $ ten thousand dollars more to go to that school uh and and that's where that's where i'm kind of you know torn um but the cost i feel um is just for the fact that that's really where i want to go why do you want to go there? It's a more, should I say, well-defined popular prestigious school. Okay, so you want to pay $10,000 for the prestige? That was actually my limit. If you have the $10,000 and you want to spend $10,000 on prestige, that's fine. You realize you're not getting an ROI for that.

You're not going to get a return on investment for that. You're simply buying something for prestige, and it's something you want to do, and you have the money. As long as you say it out loud and don't try to rationalize it and justify it, and you've got the money, I'm fine with that. But going in debt to do that? Not a chance. This is the Dave Ramsey Show. This is big news, guys. You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal.

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That's 888-562-6200 or churchillmortgage.com. Ethan is with us in Alberta. Hi, Ethan. Welcome to The Dave Ramsey Show. Hi, Dave. Thanks for taking my call. It's such an honor to speak to you, sir. You too, sir. What's up? So my wife and I are actually working on Baby Steps 1 and 2. And with my company, I actually get an allowance for using my vehicle for commercial use

because I travel from site to site. My question is, can I use that allowance towards my debt snowball when it comes to it, or do I still have that set aside because I'm using my vehicle for a lot of commercial purposes? No, it's just part of your income. So, yeah, it would be used towards your debt snowball or towards whatever baby step you're on for the rest of your life, for that matter.

But obviously you've got to keep the vehicle maintained, keep gas in it. You've got to keep the expenses rolling, right? Right. But that's part of your budget, and at the top of the budget is the income. And down in the budget will be some expenses associated with that vehicle. But that's all okay. None of that is – there's not a deduction involved anyway. It's just because they're reimbursing you.

Yeah. And further to that, the vehicle that I have right now is just a little $1,500 car to get me to and from. And what I was doing originally was just setting it aside for in case something catastrophically were to happen to it. Should I just roll that into my actual budget and just use that as my death snowball like you suggested? Yeah. And then you've got to make arrangements obviously if something catastrophic happens to your $1,500 car you're going to have to stop everything and get a car that you pay cash for that you pay cash for get another $1,500 car you know but um right uh but but hopefully how much longer are you uh till you finish your baby step two um i'm just starting it so i'm going to be in it for a while well i

mean is that 10 years or 10 months um i'm i'm you know it'll probably be around i want to say five years how much debt have you got um i'm looking at about 130 000 not counting your house? I'm renting. Okay. And what's your household income? Currently $70,000. Okay. Yeah, that is going to take you a while. Well, you may have to, in your budget, make arrangements to replace this car before five years gets around. I doubt that car makes it five years. Okay.

What do you think? I'm definitely maintaining it where I can for right now, but I know it's not going to last me five years. I'm basically putting it to a rule that if the repair is going to cost me more than what the vehicle is worth, I'm just going to get rid of it. Exactly. Exactly. So the point is you've got to be able to fund all of this without new debt. Right. So let's just keep working that through and kind of be keeping your finger on the pulse of this vehicle.

And if you need to push pause on your debt snowball and throw a couple thousand dollars in the bank right quick above your $1,000 baby step one in order to replace this thing, because you kind of see the end is near, the thing ends up being on its last leg. It sounds like you've got some life in it right now. But, I mean, two years from now, you may have used that thing up, right? Yeah, I've only had this thing for about six months, and I've already put 15,000, 16,000 kilometers on it. So I'm putting it through the wringer. Well, you're getting good use of the money that you've spent, for sure. But you may have to do it again before you get through is all i'm saying all right cool up next is going to be danella in georgia hi danella

how are you hi mr ramsay mine i'm good thanks good uh thanks thanks a lot for taking my call sure what's up um okay i'm like i'm starting the your seven step um seven baby steps, but before I started doing that, last year I went back to school to start getting my bachelor's because I couldn't before. Now, I'm $20,000 in credit card debt, and I also have my house. But I'm paying off already the credit card debt. But I don't know if I should stop school until I pay off all the credit cards and then continue or go back to school? Or should I just keep going back to school since the student loans are not due until after I finish school?

So what are you studying? Computer programming. Good. And when will you complete your schooling? I still have like three years and a half to go. Oh, so you're just getting started. Yes, I just started. This will be my third semester.

And what is your household income? It's about $2,000 monthly. So you're just barely eating. Are you going to school full-time? Yes. I'm trying to do full-time work as well as full-time school. Okay, if you've done three semesters, why do you have three and a half years left for a computer programming degree?

Well, I mean, the bachelor's degree is usually four years. And that would mean you would have done one semester. You should have two and a half years left. Okay. Yes, two and a half. Is that right? Yes. Okay.

And you're paying for it all right now with student loans? Yes. Okay. And are you single? I am. Okay. How old are you? I'm 42. Okay. Good I am. Okay. How old are you? I'm 42.

Okay. Good for you. Wow. What would I do if I woke up in your shoes? Well, I think you're studying a very good thing. I'm glad for your field of study that you're in. I think it's a great way to get your income up. Are you working 40 hours?

Yes, sir. And sometimes a little bit of overtime when they allow me, as well as I do some side jobs of doing computer repair. Okay. Well, you're not making much at $24,000. No. For working full-time. So I think if I'm you, I'm probably looking for a way to upgrade my income so that I can cash flow the school.

What's the school costing? It's $9,000 a year. That's not too bad. Okay. So $700, $800 a month, more coming in. If you can live on $24,000, if you had instead of $2,000 coming in, if you had a month, more coming in, if you can live on $24,000, if you had instead of $2,000 coming in, if you had $3,000 coming in, you could pay cash. So then I should just stop completely until...

No, I think what we're going to do is really work very, very hard to figure out a way to get your income up on the short term and on the long term. You need to change your income by $1,000 a month, and that pays cash for a $9,000-a-year school because that's $12,000 a year increase in income. So if you could pick up an extra job or a different job that gave you a raise to $36,000 a year total instead of $24,000 a year total, that gives you the money to pay cash for school from this point forward,

and you would add no more debt and if you can tread water and not reduce debt but not add debt and finish this degree that is more than okay because that gets you out and you can you know you can really get after it then so that's what i would do hey thanks for the call open phones at 888-825-5225. August is National Make-A-Will Month. I know that sounds kind of ridiculous, but it really is. So what I'm going to do is I'm going to challenge those of you who don't have a will, that's a current will, to make sure you get this done.

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Make sure you've got your will in place. Because we've done detailed research, and all of us are going to die. So you've got to get ready. I know it's not fun to talk about, but you've got to do it anyway. This is the Daveave ramsey show We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it.

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Post a job today at LinkedIn.com slash Ramsey and get $50 off your first job post. That's LinkedIn. That's linkedin.com. Terms and conditions apply. Kyle is with us in Missouri. Hey, Kyle, welcome to the Dave Ramsey Show. Hey, Dave, it's great to talk to you. You too, sir. What's up? I had a question for you. To get out of our debt, if we should use the equity in our house and sell our house in this market and pay off our debt,

and it would completely pay off our debt and have us a fully funded emergency fund. Well, that sounds tempting. Do you like your house? We do. I mean, it's not our forever house no no house is correct yeah um it's i mean it's definitely something we're not going to stay in forever um yeah i just wasn't sure if we should just use the market right now to try and get ourselves ahead of it how much debt do you have not counting the house about 51 000 what's your household income it's about 100 000 okay and what's your household income? It's about $100,000. Okay. And what's your debt on the $51,000? What's it on? 30s in student loans. I've got 12 on my truck,

about five on credit cards, and about $4,500 in medical bills. What's your house worth? We could sell it for about $ what do you own it about 187 how long have you lived there a little over two years what do you hate about it um the location probably where we're at um if you were debt-free, when would you move? If you didn't sell the house and you were just debt-free, I waved a wand today, where would you move? We'd probably put it on the market. You'd move anyway? Completely debt-free, yeah.

You'd move anyway? Absolutely, yep. Okay, all right. Well, if you're going to move anyway, then let's pay off the debt. Okay. But if you're just going to move just to pay off the debt, your numbers are light enough that you could stay there. Right.

But there's no reason to stay there if you're going to move anyway. Because what you're telling me is if you didn't have the $50,000 in debt, you'd move anyway, right? Yeah. Yeah, we probably would. Because you don't like the location. If I look into it, yeah. Yeah, you don't like the location. If I look into it, yeah. Yeah, you don't like the location.

Well, I would look into it. If you love the house or you generally like the house more than it sounds like you do, location included, then I might sit there and knock that debt out because you've got enough income to debt ratio, you know, your shovel to hole ratio, what your income is versus the hole you're in, that you could clean that debt up pretty quickly. A couple of years, you'll be debt-free. But it sounds like you're moving anyway. If you're going to do that, then I'd make sure I cleared my debt in the process.

Leanna is next in Virginia. Hi, Leanna. Welcome to the Dave Ramsey Show. Hi. How are you doing? Better than I deserve. What's up? Great. Dave Ramsey show hi how are you doing better than I deserve what's up great um so my husband and I are on baby step two and I'm a nurse and have the opportunity to pick up bonus shifts yes you do

yeah but we also have a baby and often need a center in order for me to pick up your phone your phone's breaking up can you speak directly into it oh yes sir um is that better yes ma'am okay um so we also have a baby and i often need a sitter in order to pick up these shifts i don't have any way of knowing when these shifts will be available so we're just really having a hard time making a zero-based budget when i have these extra shifts popping up and sometimes that means i'd need an extra $100 or something for a sitter for an eight-hour shift or something like that. But it's not something I can really plan for.

What kind of notice do you get on being able to pick the shift up? Like the day of, and it'll be extra money. It'll be sometimes $20 extra an hour or something. Yeah, it's worth it. To pick up these, yeah. But I just don't know. So just budget a little bit of excess into a babysitter fund. Okay.

Let's kind of pan back for a second and look at a month, okay? Okay. In a month, how often does this happen? It really depends. No, no, no it really depends no no no no no no on average i know it depends it can be a bunch or it can be a little but what does what's a normal month look like does this happen two times or 20 times i'd say about six or seven times a month. Okay. Let's budget $600 or $700 for babysitter. Okay. In your budget. Extra.

Extra. And then what's that going to do to your budget? It's going to add a bunch of extra income to it. Mm-hmm. Because you're going to get paid for those shifts. Right. A lot more than the babysitter costs. Yeah.

Okay. So what is, you know, but go ahead and kind of have you an envelope with like 500 bucks in it for five of these shifts. And let's not let it get lower than 500 bucks. Just replenish it anytime it does with your budget. Okay. And then you don't have to sweat it. You don't have to think about it. But every time that $100 leaves that envelope, it means that more money is coming into your budget because you're making a whole lot more than $100 on that shift.

Yes. So, you know, this is a net increase in traction, in how fast you're moving. You know, you're doing really good with this. So, obviously, we want to do it. But just, yeah, let's budget for $500 or get $500 into an envelope and then each month budget to replenish it and keep it at that. Okay. That should be enough.

That keeps you moving because you're never going to go through $500 without getting a paycheck. Correct. And you can just change your budget. I mean, you can look at it. If you get down to $100, you did four of those shifts or something, and, you know, you just reach over and change your budget and go, I've got to put $400 in the budget to replenish the envelope.

Okay. To get ready for the next set of surprise shifts. So when you get that shift, what do you make in an hour? Sometimes up to $60. Wow. Yeah. Ding, ding. And so an eight-hour shift on that, huh?

Yeah, but we've got a lot of loans to pay off. I know you've got a lot of mess to clean up, but that's a sweet thing. I mean, you're smart to figure out how to take that, and, you know, that's certainly better than the average part-time job out there, $60 an hour. My goodness gracious, that's wonderful. So that's the beauty of the nursing degree. Wow, well done. Good for you. Open phones at 888-825-5225.

Up next is going to be Griffin in Minnesota. Hi, Griffin, how are you? Hey, Dave, how's it going? Better than I deserve. What's up? I have two years left of school, and I'm lucky enough right now to be on a full-ride scholarship for athletics. I get a monthly living expense stipend check, and right now it's way more than my monthly expenses.

Right now I just keep collecting monthly payments. I'm just going to my savings account. I'm curious if there's any investments I should be making because I have enough saved up for a whole year's worth of expenses. You currently have enough to cover a year's worth of college and living expenses. Not college, but living expenses because I'm fully full scholarship, so all my tuition is paid for as well. Not if you get hurt?

It's still covered, yeah. All the way through? All the way through, yep. What do you play? I wrestle. Okay. And so if you never get to wrestle again, they're going to pay for the next two years of your tuition?

That's in writing your tuition. Correct. That's in writing. Yes. Okay. All right. That's nice. And you got a year's worth of expenses. Here's the thing. you graduate two years from now 100 debt free with a degree in a field where you can make a

great living then i am the amount of interest you amount of return you could make on an investment during the next 24 months if you invest ten thousand dollars and make 12 on it you made one thousand two hundred dollars yeah okay and if you invest if you don't invest it you made one thousand two hundred dollars yeah okay and if you invest if you don't invest it you made one thousand you mean you made almost nothing so we're talking about a thousand dollars here on a ten thousand dollar investment a thousand dollars does not change your life what changes your life is finishing this degree debt-free, no matter what possible negative thing comes into your life. And that's what I want to make sure of. But you've already got a year saved.

So if you want to do some, that's fine. But I just want to point out to you that you are a better investment than mutual funds are. graduate from school debt-free with a degree in something that's usable is a much greater mathematical rate of return than a stupid mutual fund would be. So don't get in a hurry to invest. You're a better investment. Kristen is in North Carolina. Hi, Kristen. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much for your help.

Thank you for calling. How can I help? Well, my husband and I are wondering whether or not we should be filing for bankruptcy. We just got overhead on everything, and we have a creditor who is now suing us. We just got a notice about that a few days ago. So we were looking at bankruptcy, but then the same day I was looking into things and I found your show and I've seen you help people with numbers that seem to be a lot worse than ours. I just don't really know, you know, what's the best decision for us on

that yeah it just scares the crud out of you when somebody sues you doesn't it yeah it's never happened before and we're just flabbergasted understand okay so tell me about the lawsuit who's it with it's with discover bank okay so credit card uh it was It was a loan. A bank loan, okay. How much was the bank loan? $15,000. Okay, and how long has it been since you paid them? Our last payment we made in April. Wow.

They came after you quick. Are they threatening to sue you, or they've actually filed a court date? There's not a court date on it. What we received was a civil summons and a bunch of papers proving the debt and things like that. Oh, okay. And where is Discover Bank? Where are they located? Oh, no, it's not an actual bank chain.

I'm sorry. I said Discover Bank. It's Discover, the big credit card company, but this was a loan, not a credit card. Oh, okay. Okay, good. Yeah. That's good news. Okay.

And what's your household income? Our take-home is $50,000. Okay. And how much other debt have you got, not counting your house? Well, we don't have a house we rent, and including that loan, our altogether debt is $90,000. Okay. So you've got $75,000 of other stuff.

What is that? Well, that's $7,000 left on the car loan, $7,000 left on a student loan, and then various other credit cards and poor decisions loans, things like that. Okay. All right. And both of you work 40 hours? I work part-time, but that's because the nature of my job is that the work comes and goes i'm in freelance okay and what is your income um mine averages out to about um

24 000 take home okay so he works 40 hours and makes 25 000 makes $25,000? Yes. What's he do? He makes less than I do. He works in IT. Why is he not paid any more than that in IT? Because his company is the worst, and they haven't given him a raise in four years. What does he do in IT? Well, he's responsible for, so he works with the clients at the company

who need to convert their phone lines over to a company-paid program. He's literally the only person who does this, and he's survived five layoffs in the past five years, but they're obviously not giving raises because they're laying people off. Well, I mean, North Carolina in general has got a lot of technology stuff going on. I'm surprised he can't make double what he's making doing something similar somewhere else. Has he looked? Well, he doesn't have a degree.

You don't have to have a degree. Most people in technology don't have a degree. You just have to know how to flip. Yeah, you've got to know how to flip the switches. That's it. You've been looking because, you know. I've got 300 people on my team that are technology people and varying degrees of what they do from software to hardware to whatever, and I don't have a single one of them making $24,000,

and phone line stuff included. So, you know, and I'm not saying that we're necessarily a better employer, although we probably are, but the point is that I think he's underpaid, and I think he needs to look for a job because income will help you guys. Can you kick your hours up and kick your jobs up? What do you do? Well, I do freelance. I teach English to Chinese kids.

Okay. So English is a second language? Yes, English is a second language. So it's something that, you know, they come to me, so I'm kind of at the mercy of who wants classes when kind of thing. Except you could find more people that wanted the classes if you went out and scoured the land a little bit. Because, I mean, if we could change your all's income $20,000 a year, it would change this whole picture very quickly.

You follow me? Yeah. I think you guys haven't concentrated on your careers and on the income side of your equation, and that's part of what, I mean, you're not blowing money out of your, you know, just crazy amounts of money somewhere. You're not just wasted money. You're underemployed. You're not making a ton between the two of you.

And you've been disorganized. And those two things together are no shame or no sin. It's just normal human stuff, right? But those are the two things we can fix. We can get you organized and get your income up and i think you can turn this around really really quickly that would be great yeah let's just place it with some math for a second let's pretend we took 10 000 of your current income and you added 20 to it like i'm talking about by him getting a better job and you're working more and um then all of a sudden, that's $30,000 that we throw at debt.

If I got $90,000 and I throw $30,000 at it, I'm done in three years. Yeah. And in the meantime, I've dealt with these morons at Discover, and I gave them a big check of some kind to settle this debt because I would imagine if you called them and offered them about $7,000 cash right now, they'd probably take it for that debt. But you don't have $7,000 cash right now. They'd probably take it for that debt. But you don't have $7,000 cash. We've got to scrape that together, right?

Right. So let's get you on a written budget on every dollar. Go to everydollar.com and download that. Better than that, I'm just going to put you two into Financial Peace University, and that includes the EveryDollar Plus, which hooks up to your bank. We're going to pay for all of it, and we'll give it to you. Okay? If I give it to you, will you up to your bank. We're going to pay for all of it, and we'll give it to you. Okay? Oh, my goodness.

Thank you so much. Will you go to the class if I give it to you? Oh, absolutely I would. Okay. And him, too. You've got to take him with you. Okay? Now, I'm also going to send you a copy of Ken Coleman's book,

The Proximity Principle on Careers, because the career thing is part of your all's equation. So Financial Peace University is going to show you exactly what to do with money, on careers because the career thing is part of your all's equation so financial peace university is going to show you exactly what to do with money step by step how to get control how to get this wrapped up how to get it in moving in the right direction and then you guys have got to work your butts off and get your incomes up and when you do those two things together we can get rid of this stupid lawsuit in a matter of a couple of months by just saving up some money real real fast by working our butts off living on nothing beans and rice rice and beans you're

not going to see the inside of a restaurant unless you're working there and don't talk to me about a vacation you're broke and getting sued yeah no yeah this is game on the books yeah this is game on okay and i agree you can do it you do it. I know you can do it. And I'm going to be here for you. If you need some more help, you call me back anytime. But you hold on, and Kelly's going to pick up. We're going to give you Financial Peace University for the one-year membership and the nine-week class.

And we're going to give you the Proximity Principle book, which will take care of helping you guys with your careers, both of you, because you need to get these things moving in your life. Congratulations. You're getting ready to change your life. It's going to be a very tough, tough year coming up, but it's going to be a lot. The good news is there's going to be a bright, bright future

on the other end of it. So, hey, good question. Thank you for joining us. Open phones at 888-825-5225. Annie's on Facebook. She could be in Facebook, but she's on Facebook. I live near Sacramento, California. My husband and I are in our 40s.

We'll be here for at least the next 15 years. We'll make $120,000 a year, which seems decent, except that a cheap house in our area is $450,000, which is a payment of more than 25% of our income. We're discouraged because the market here seems to be rising faster than we can save.

Any advice? You're going to have to, you know, what you're outlining there is an average house price in Sacramento. It is actually about $412,000, I think I read the other day. And so you're going to be in a below average house and or you're going to move a little bit out of Sacramento in order to get a cheaper price, in order to get into the real estate market. But you're right. The problem is you don't get a pass on math just because you're in California.

You still have to make things work. And it's hard because housing prices are driving people out of there. I wish I had a better answer for you. Hey, thanks for the follow on Facebook. That puts this hour of the Dave Ramsey Show in the books. This is James Childs, producer of the Dave Ramsey Show. Once again, you made the Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.