The Ramsey Show - App - How to Manage Your Money With the Envelope System (Hour 2)

Episode Date: July 3, 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. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Luke is starting off this hour in Omaha, Nebraska.

Hi, Luke. How are you? Hi, Dave. Thanks for taking my call. I really appreciate it. Sure. What's up? So, I'm on Baby Step 2. I'm a fairly new listener to you, and I'm all in. Gazelle Intense, all that stuff. Question about Baby Step 2. I'm a fairly new listener to you, and I'm all in, gazelle intense, all that stuff. Question about Baby Step 2, though. I have some stock options through work that were vested that I could sell. They're non-retirement.

And I was curious about tax implications at the end of the year. Should I, if I sell those to pay off my snowball, should I save X amount of those for end- for end of your taxes or how does that work i have you exercised the options or they're just options uh they're they're exercised so you own the stock correct yes how long have you owned the stock um they've been vesting over the last three years okay because if you've owned if you've owned it more than a year, any gain you have on it will be taxed at capital gains. Now, when you took the options, did you pay taxes on them at that time as income? You should have, right? Yeah.

Say, for example, I had 100 shares, for example. They took out X amount of them automatically through the stock company, from what I understand. And then I was able to sell the ones that were left over. Okay, because when they give you stock or give you a deal on stock, that's ordinary income because that's part of your income package. Okay. When you sell stock at a profit that you've owned more than a year, that would be taxed at a capital gains rate of 15%. Okay. When you sell stock at a profit that you've owned more than a year, that would be taxed at a capital gains rate of 15%. Okay. So it would be less, a lot less, based on your income.

So how much money are we talking about cashing out here? Oh, it was only like $10,000. Oh, okay. So it wasn't a whole heck of a lot of money, but it was enough to get me going on my snowball. Yeah, good. Well, I'm definitely cashing it out regardless of the tax implication the only question is how much to hold back for the taxes and you probably need to sit down with a tax pro and give them the details of your scenario and let them calculate

how much your tax bill is actually going to be okay and then that tells you how much to hold back but no it's not automatically held back for you. You're owning the stock, and the stock is being sold. It sounds like you've owned it long enough that it'll be a capital gains rate. That's what it sounds like. But double-check that with a tax pro and actually calculate it so you don't get in a pinch. You don't want to have a $4,000 tax bill, and you only held back $1,000 or something.

And so calculate it out ahead of time. Know where you're going. and have a clear path, and then that's the route to go. But yeah, do hold something back after meeting with a pro and figuring it out. If you don't have a tax pro, just go to DaveRamsey.com, click on ELP for tax preparation, and one of our tax pros can sit down with you and help you do that. So good question. We appreciate you being here.

Pamela is with us. Pamela's in Los Angeles. Hi, Pamela. How are you? Hi, I'm great, Dave. How are you? Better than I deserve. What's up?

Super. My mom is 85 years old, and we're thinking she can sell her home to get out of her reverse mortgage or pay it off and keep a nice sum for her nest egg. I've talked to an ELP realtor. I've talked to a SmartVestor Pro and her tax preparer, and they all say it sounds good. But I'm wondering if you see any red flags. They all say what sounds good, selling it or paying it off? Selling the house that's right at about $550,000 and paying off the reverse mortgage with that, which is at about $315,000.

And then, you know, after she pays the realtor, she might get to keep maybe, I think it's like $175,000 more or less. And when they did the reverse mortgage in 2006, she and my dad, they got a lump sum of about $200,000 and then the reverse mortgage was set at $250,000. Obviously, the reverse mortgage has gone up, but so has the value of the house. So she's kind of able to get a nice chunk. Does she have any other nest egg? She has about $130, $140 in a savings account 130 dollars or 40 000 130 000 okay all right and she's 85 where is she planning on living after she sells the house uh she's looking at uh renting a two-bedroom in this area so she's near her church and her

hospital and her knitting club. She doesn't want to buy. She hates being a homeowner. Since my dad died, she's wanted to sell this house, like, every year, but it wasn't feasible. Okay. All right. So now it's feasible, and she's not trapped anymore by this reverse mortgage. Okay.

Yeah, she feels like it's creeping up on her, and she's going to end up with nothing. It's because it is. That's why she feels like it's creeping up on her and she's going to end up with nothing. It's because it is. That's why she feels that way. So they're a horrible, horrible product. Okay. Well, the good news is she can get out of it and she can not be a homeowner anymore and she's just going to rent a nice apartment where everything's taken care of. Is that the idea?

That's the idea. Okay. And she would have $130,000 plus the $175,000. And so it sounds like we've got about a $300,000 nest egg, and she's 100% debt-free, renting, and 85 years old. Do I have that right? That's right. I don't see any downside to this.

I would do it. How's her health? She's pretty healthy. She's got arthritis and macular degeneration. Her vision's going down, but she's very independent. No one's had to ask for help. So how much does she need a month to live on, and where's that going to come from? She has her Social Security and pension for about $30,000 a year.

And then the investor is going to help her put that into her sale profit into a variable annuity at about 7%. And she can get, I think he's planning to do $300 to $400 a month income for her. Is that one of our SmartVestor Pros? No, the SmartVestor Pro wasn't close enough for her to feel like she could just go and see him anytime. So we found, through our realtor, we found an investor who we interviewed and met with a second time. And he's nearby, so she feels comfortable with him. And I ran whatever he gave us. She's the investor.

He's the investment advisor. Right. Thank you. Yeah, that's okay. 7% must be the floor on the variable annuity. It should not be locked in at 7%. And so I want to make sure, you guys, that it ought to be the minimum of that. And if the mutual funds that are in the variable annuity make more than that, it should make more.

But 7% ought to be the floor, the minimum that she makes. Okay. And if that's the case, the minimum that she makes. Okay. And if that's the case, then what you're describing to me sounds fine. She's paying a little bit more for the variable annuity, but in her situation, it gives her lots and lots of guarantees, and it's a good product for where she's sitting right now for sure. So, yeah, I love it. I love the whole plan.

Let's do it. Great. We love you, too. Thanks. Thanks, Pamela. Appreciate the call. Open phones at 888-825-5225. You jump in.

We'll talk about your life, your money. Eli is on Facebook. Dave, what's your opinion on using the Acorns app after Baby Step 3, not as a primary investment, but just a literal spare change investing. You can do it if you want. Just don't think you did anything. If you invest spare change, you know what you're going to get? More spare change.

If you invest nickels, you're not going to get as much as when you invest dollars. So don't feel like you did something because it's kind of a, you know, it's kind of a little gimmick is all it is, but not it's just a little gimmick is all it is but you need to do real investing this is the dave ramsey show with more frequency than you know i get calls and emails from people dealing with the recent loss of a spouse or a parent you can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money, especially when it's a situation that could have been avoided.

If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you. And yes, this is an ad for Zander Insurance. But since this is one of the most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough. Protect your family.

It's what you're supposed to do. Go to Zander.com or call 800-356-4282. Thank you for joining us, America. Sarah is with us in Branson, Missouri. Hi, Sarah. How are you? Hi, Dave. Thank you for taking my call. Sure.

What's up? I feel like my budget is suffering because of this one piece of the puzzle that I can't figure out. The envelope system. How do you manage doing the envelope system if you pay everything online? Like everything's auto-paying and you do a lot of online shopping and you don't carry cash on you. You don't go to a grocery store? I do, but I pay with my debit card. Okay.

That's not online? No. Okay. So the way the envelope system works is when you're physically in a store, you have an envelope that is marked for a category that has money in it that is in that category from your budget. For instance, food. At the beginning of the month or at the beginning of your pay period,

one of the two, you say, in the grocery stores we're going to spend $200 in the next two weeks on food, $400 in the next two weeks on food. And you put $400 or whatever the number is in cash in an envelope, and when you go to the grocery store, you use the cash out of the envelope to do the purchase, not your debit card. That's how it works. Same thing for clothing in the clothing store.

Same thing for... Sometimes you can get a better deal online, though, with certain objects. If you are buying something online, it's difficult to use cash. Hello? You're going to use your debit card there. I'm talking about when you go to a store. But if you're going to buy, if you put $500 in your clothing budget and you spend $250 or you spend $300 online,

then you would only put $200 cash in your clothing envelope to physically go to the store with. Okay? Okay. So you've just got to decide. The thing is, when you are out and about making purchases, then you will spend more if you are using your debit card or a credit card particularly than if you use cash tons of research says that so the number one impulse location in the world is the grocery store

they are the best merchandisers of all retailers they do an excellent job, shelf positioning, color coordinations, store design. Everything is designed to cause you to walk past more things than you have to in order to have an opportunity to impulse. People impulse their butts off in grocery stores. Okay? It's designed for that. And so you spend more there. If you don't go in with a list, if you go in hungry, and if you don't go in with cash.

Those are the three things that will help you with your grocery spending. But if you're buying something online, then you just reduce that category. So what you may want to do, for instance, if you're buying clothing online, okay, you may want to have an online clothing budget and a separate in-store clothing budget. Two different categories, online and in-store. The in-store goes in cash in an envelope. The online does the other. Now, you need to realize, too, that when you're purchasing online, for instance, Amazon Prime, people impulse their butts off there, too, because they don't even think about what they're buying. They just click here, and it's delivered to your door in a few hours, right?

And that's called, in the Internet world, that's called friction. The harder it is to purchase something, if a website makes it difficult for you to purchase something, that's higher friction, and their sales go down, and your impulsing goes down. Amazon Prime is one of the lowest friction purchase points out there, so people spend their brains out on Amazon Prime. And they don't know what they don't because they don't watch what they're doing because it's very, very, very easy to purchase stuff quickly and easily and very convenient. It's a nice feature, but it causes you to spend more. You have to be very, very careful because their job is to get your money, and they're better at their job than you are at yours.

Do you suggest that at the end of the week I take out so much cash and then leave whatever I know I'm going to spend online in the bank account? Do it that way? Divide it? Yeah, that's what I just said. You need a separate category in your budget for online purchases that stays in your account, and the other category is your in-store purchases comes out of your account in cash and into an envelope marked for that category,

for instance, clothing or grocery store or entertainment. Sharon only carries about three categories now in envelopes. I think we've got four categories in envelopes total. We've got she does clothing and entertainment and grocery stores these days. That's the only three we personally use. And then I have one called GEM, which is Gas Entertainment Miscellaneous, G-E-M. And that's in my front pocket. That's my envelope.

It's my wallet. And so it's taking care of odds and ends that I'm going to do. But it's got my redneck emergency fund, which is three $100 bills, and in addition to that, my miscellaneous spending, which 90% of my gem goes to tipping these days when I'm going somewhere because I love the tip. And so valets are working hard in the sun and the rain, right? People waiting at a table are working hard. And so that's one of my favorite things to do now

so you just you decide how you're going to spend it but just keep in mind if you can set systems in place like the envelope system that cause you to handle cash you're much more aware when you're spending it creates emotional friction is what it's called and it makes you have an ouchy moment when you're spending and if you have an ouchie moment when you're spending and um if you have an ouchie moment you spend less when you lay a hundred dollar bill on the table and uncle benjamin franklin is crying as he looks at you because he's leaving because you're putting him out for adoption with someone else you realize you spent money when you hand the plastic to to them they hand it back to you you ever thought thought of that? When you hand money out, it doesn't come back.

When you hand plastic out, it comes back. So it's interesting. You hand money, you trade that piece of paper for an item. When you hand plastic, you give them the plastic, they give you the plastic back and the item. There was no trade. There's no visual trade. See what's not activating in your psychology?

If you traded, you know, if you were a kid and you traded a toy with another kid, we're going to trade you. You give them a toy. They give you a toy. There's a trade. There's a transaction going on. And that's what happens with physical paper money. There's a transaction.

You're handing them money they keep it they hand you the item or the service and you get to keep that there was a trade but when you hand them plastic they give you the plastic back i understand that they're supposed to you don't want them to keep your card i got that okay but you need to realize what's happening psychologically there was no trade there was no. It's like you left with everything. You got to keep your plastic, and you took their stuff. Wow, what a great trade. See how that works emotionally? It changes everything.

And it's really, really bad online. And stuff like Apple Pay and PayPal, man, when you can just not even see a piece of plastic, now you just pull out your phone and wave your phone around and half of Home Depot lands in your pickup truck. Good Lord, you know, that's a problem. You got tools you don't even know what they do, but you got them, baby. You know, I mean, you can impulse your butt off in there. And, you know, I'm not against Home Depot.

I like Home Depot. I shop there. But the point is you you really can create a mess in these situations so really good question sarah and that's why we still use something as primitive as the envelope system for a few categories and it's all categories that happen when you're not at home you're out in a store, you're on vacation, take your vacation envelope, and you can break your vacation up into restaurant spending.

You give the kids a certain amount to spend in the theme park, right? How many pairs of ears can you buy? But not many if you don't have a lot of money. So there you go. It's a thing. So just, again, a transaction needs to occur. You need to realize the easier it is to purchase, the less steps there are, the less you feel it emotionally, the more you're going to spend. We all do that. Anytime someone says, oh, we're a cashless property, just use your room key.

Yeah, it's because you spend more. That's why they do that on a cruise ship and so on. Think about it. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs.

Christian Healthcare Ministries is the original health cost-sharing ministry, a Better Business Bureau-accredited organization CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each We'll be right back. chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. Mandy is with us in Kansas City. Hi, Mandy. How are you? You're here. Open phones at 888-825-5225. Mandy is with us in Kansas City.

Hi, Mandy. How are you? Hi, Dave. I'm great. And yourself? Better than I deserve. What's up? Wonderful. So I have a dilemma. I have a job offer from another company that I was not looking for, and I don't know what to do or even how to analyze whether or not to take it. And so I called you in hoping you can give me the correct guidance here. We are in baby step two, and that's the biggest of my hesitation is because we're down to

the last, like, $18,000 to pay off, and I'm like, we're so close. But it's about $8 eight thousand dollars more and then it includes a four thousand dollar a year cash bonus and so what would you do so the new job offer offered you eight thousand dollars a year raise plus a four thousand dollar bonus so a twelve thousand dollar a year raise yes okay what do you make now uh forty five thousand okay is it in the same town do you have to move it's actually closer and it's about 20 minutes closer to home that's nice too okay yes um what do you do now? Accounting. For a nonprofit agency, I have, you know, my own office, and I have, you know, just the nice extreme flexible schedule, whereas I'll be going into a cubicle, but I'll still have a little bit of flexibility.

Okay. And doing accounting again? Yes, doing accounting. And how old are you? I'm 29. Okay. When you're 49 and you look back on the 20 years that you're getting ready to roll from 29 to 49 what do you want to have done what do you want

to be doing when you're 49 i want to be close to being a cfo okay um which of these which of these two offers takes you on that path i think the the new one because I know where I'm at now. We just hired somebody new, and so it's just me and this other person, but the pay is nowhere near each other. Right. Okay. So you make more money, you're closer to home, and it is on the track that you want to go on as far as your career goes.

Yes. Are the people bad people at the new place? They're hilarious. I mean, I enjoyed meeting with them. It's just like I've been here. I'm like where I'm at now. I'm comfortable. I've been here, and I know all the ins and outs.

I know. But so far you've given me zero negative about the new place. The people are great, it's closer to home, it's more money, and it's the path to where you want to go. I'd be learning a new job, because it's the next step up in my career. Which is really what you want to do. Yes, absolutely. You don't want to peak at 29. Right? Right, absolutely. You don't want to peak at 29. Right?

Right, absolutely. You want to put that off a couple decades, that peaking thing. Okay. So it's a little bit uncomfortable is the only downside because you're going to be doing new stuff, new people, new environment. Might be a little stress involved with all that new stuff new people new environment um might be a little stress involved with all that new new new yes and you got you're kind of you're kind of you know you're kind of comfortable where you are yes uh fly eagle okay fly eagle don't sit in the nest

and be a turkey all right you this is're up for this. You can do it. It's everything you were looking for and didn't even go looking for it. I know. That's the craziest part. I call that God. All right. That's what I call that. I think God's showing up and going, hey, Mandy, wink, wink, I got you.

You know? And I don't think you walk past this. If you can find a negative to throw in this discussion, we'll talk about it. But so far I haven't heard anything negative, except Mandy might be uncomfortable a little bit while she grows. Well, get after it, stud. Let's do it. All right.

You got this. You can do it. All right. You got this. You can do it. You got the stuff, kiddo. Stud it, I guess. Yeah, there you go. So, hey, well done, kiddo. You got this. Very cool.

Proud of you. Open phones at 888-825-5225. Sean is in New York City. Hey, Sean, how are you? Hey, Dave. How's it going? Better than I deserve. What's up?

So I just got married a couple weeks ago, and I wanted to ask your opinion on saving for a house. Okay. Congratulations. Thank you. Appreciate that. So leading up to getting married, both me and my fiancé have just been saving money in a brokerage account and investing that in kind of stock market index funds. And so I wanted to ask if that's kind of the best method,

if we don't think we're going to be buying a house for maybe, say, three-plus years. Well, as you know, the stock market has a volatility to it. Whether you're using an index fund or not, it has a volatility to it. And in a three-year cycle, you know, about 70% of the three-year periods make money, and the other 30% don't. About 90-something percent of the five-year periods make money. So you're taking some risk, but it's not a huge risk. How much money is in the account?

Between the two of us now, we probably have about $150,000. Okay, well done. And so why are you waiting three years to buy? Well, right now we live in New York City, and the surrounding area is very expensive. Sure, of course it is. So I think it's just a matter of enjoying city life and then saving a little bit more for a substantial down payment. You're not going to buy in the city? No, I don't think so.

Oh, okay. All right. All right. So leading up to it, would you kind of pull it out of the market? You know, let's say, you know, wintertime, we know we want to buy in the summer. Would you pull it out? So, would any risk in the immediate future? Probably.

But, I mean, the point is, there's no way to know. I mean, people who try to time the market usually lose money. And so, I have no way of knowing. I mean, last year, the s&p closed in the year 2017 up 19 percent and some change she made good money last year and so if you pulled it out and missed that you'd missed it you know but so what you know at some point when you've got enough

money i'm gonna put it on the bench and let it sit there i'm not gonna worry about trying to make more money with the money at some point as you get closer to your goal. But if you want to take some risk with the market and the cycles over the next 36 months, that's fine. But, yeah, I agree with you. When you get about six months out, I'm probably going to start to put some of it on the bench and let it sit. And it's not going to make any more at that point, but you're not going to lose any at that point. You start moving it over. So you've got any debt?

No. Good. What do you guys do for a living? Both of us work in corporate finance for a media company. Very cool. Very cool. So you're making six figures each then? Yes, correct.

Okay. So you're making bank, which you need to do to live in the city. So cool, man. Very good. Well, congratulations. Sounds which you need to do to live in the city. So, cool, man. Very good. Well, congratulations. Sounds like you got a plan. Yeah, I'd get after it. We appreciate you listening.

Thanks for hanging out. Open phones at 888-825-5225. You jump in. We'll talk about your life, your money. Megan is on Facebook, says, Do you consider your three to six months of living expenses emergency fund as your short-term disability plan? My employer does not offer one, or should I get one on my own? I do not have short-term, and I do not suggest you buy short-term disability.

Yes, I use my emergency fund for short-term disability. A short-term disability would be called an emergency. Long-term disability insurance, everyone needs to get if you can possibly find a way to afford it. It is based on your occupation more than it is your age and your health. And so high-rise window washers have a lot of trouble getting long-term disability insurance and life insurance for that matter versus people who ride a desk for a living. If you ride a desk for a living, your long-term disability is fairly inexpensive. So, for instance, all of the people that work on my team here,

the almost 800 of them, we furnish long-term disability. But we don't have short-term disability offered, nor do we suggest it. Just to cover that, you're exactly right, with the emergency fund, Megan. Hey, thanks for following us on Facebook. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry, and I learned that you can't sell them and you can't even give them away.

And then we talked about timeshare exit teams process. Every ownership situation is different, which is why they have more solutions than any other company. And that's when they earned my respect. Don't call any of the imposters out there, and there's a lot. The only timeshare exit company I stand behind is timeshare exit team. They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee.

They will get you out or they'll give you a full refund. Call 844-999-EXIT online at timeshareexitteam.com. Thanks for being with us, America. This is The Dave Ramsey Show. I'm glad you're here. I appreciate you hanging out well if you're great at marketing and you're on board with this mission around here that you hear us doing where we give people hope and give them information to be able to win uh we are hiring a lot of positions here at ramsey solutions but some key marketing roles just popped up. A director of marketing role for our whole business-to-business channel, that's a big role, and we're also looking for a marketer for our media team and a paid media marketer

as well. So if you're used to doing any of those things, or if you're a developer or you're whatever, we're hiring in a lot of different positions. Just check Dave's Hiring. It's the little tab on the right-hand side of our website. When you go to DaveRamsey.com, just click Dave's Hiring, and it'll pop up all the different things. You can find out all the jobs we're doing at DaveRamsey.com.

Evan is with us in Bowling Green. Hi, Evan. How are you? I'm better than. Hi, Evan. How are you? I'm better than I deserve, Dave. How are you? Just the same. How can I help? Hey, I just called in.

My wife and I actually are, you know, I just needed some perspectives. And we've gone through the financial peace class, and it just seems that we waver from it. We both have or make, I make $28,000. She makes about $19,000 a year. And we both have a, I say we both because we're married, we have a $70,000 debt. And that's including her bachelor's degree from Daymar College. And then $11,500 in car debt, a Dr. Bell $6,000, give or take, and then a mower, $1,700.

And the Daymar is the biggest one. I think it's around $55,000. So together we make $47,000, and I just kind of wanted to hear your logic on it my logic on what on what we should do and how do we get out of it i feel like that we just we just keep looking at this mountain and it just never gets any smaller that's because you don't climb it yeah i mean if you just sit there and look at it, it ain't going to get smaller, is it? No, sir.

You've got to put one foot up there and start, you know, grab a hold and let's go. And the only reason you would start climbing a mountain, though, the only reason you would start working a plan is if you thought it was going to work. There's something about when you went through Financial Peace University, the switch didn't flip in your head. Somehow you thought, this doesn't work. Or you'd have gone and done it. I think the only thing that I agree with you, and the hard part about it is the application on an everyday basis.

And that's okay, so we have to keep on track on where we're going. And then it's, well, the doctor bill came from where she was outside mowing the yard without shoes. And, well, we had to go to the ER. She fell in a drainage ditch and cut her foot up pretty bad and had to have stitches. And it's those things, and especially with our income, we don't have, we can't, with paying, we're trying to do the snowball,

saying pay the the smallest things first and then and then add up um but we it just seems with that and with certain occurrences throughout life especially the trade this bitch uh was just something that was just unexpected and it's taking us back and it is putting us back into a spot where we can't pay extra or we're just paying the minimums now. And finance a car. We bought another car. So if you bought a $1,700 lawnmower, how did she fall in a ditch pushing a lawnmower?

Right. Well, the lawnmower situation was another thing. We could either let the grass grow or we could have bought a different, I mean, we could have bought a cheaper lawnmower um yeah yeah sorry about that that's a moment but i mean if you have a 1700 lawnmower how does she fall in the ditch well i'm just curious she was a push she was a push mowing out front and the push mower was uh a part of it that you couldn't ride yes sir oh i got it okay i'm just curious i'm just thinking oh yeah yeah well okay for your rinse i guess all right so um you know what what you know here's the thing if you have a big enough why if you say let's just say something bizarre okay something weird okay that's not going to happen but just

to show you an example okay as a metaphor if if i said that you were going to die in 14 months if you did not pay off 25 000 in debt in the next 14 months. You'd go nuts. Yes, sir. You'd work like a crazy man. And you'd sell stuff. And you wouldn't have problems staying on a budget. You would get there.

Because if you don't, you're going to die. That's extreme. And that's obviously weird. But my point is you would have a really big reason that would cause everything to revolve around that reason. And you don't have a big enough why. You're just living life. And, you know, what I would say is this. I want you to get scared of being normal. And you're not scared of being normal yet.

Enough to cut this crap out. I mean, cut your life down to nothing. Take six jobs. Sell so much stuff that the kids think they're next. I mean, the lawnmower's gone. You're pushing the whole thing. You know? Probably the car's gone.

I don't know. Everything's gone. We're not going on vacation christmas is going to be a craft it's time to shock the system here detox you got to detox and you know just clean out everything that's going on here and stop putting anything into the system that's not pure i mean i don't want to hear about fun i don't want to hear about fun. I don't want to hear about anything except sacrifice because you're going to die if you don't do this. Now, again, I'm being melodramatic and crazy, but the point is that if that happened, you don't care what other people think. You don't care about Friday.

You don't care about discomfort temporarily. You will live like no one else so that later you can live and give like no one else that's the why statement you know do i will i pay the price to win so i never have to pay a price again or am i going to pay the price of mediocrity and you got that's what it is you all got to talk about it and you got to go you know we've been doing this stuff ish and ish dave ish financial peace university ish gets you ish results and that's what you've been doing results ish and i'm not fussing at you you're just asking me how to do it and you know when i was a kid no one jogged there was no one was running in the neighborhood I grew up in unless somebody was chasing them. Okay?

Nobody went for a run. There weren't running shoes. I remember when Converse came out with the basketball shoes that were actually cool and would stop quickly on the gym floor. It was the first ones I'd ever seen. Now everybody wears those throwback converse and that's what they look like those you millennials wear you hipsters wear the ones that i used to have when i was a kid but running shoes running shorts sweats that matched we had the gray sweatpants that looked like a balloon that you saw in the first version of rocky okay that's that was it and one day a guy

went running up our street a grown man was running on our street in those gray sweatpants and funky looking little tennis shoes and the kids we were all just amazed we're like a grown man just ran up the street we went and told our parents the next day everybody gathered on the front porch to watch this grown man run up the street and it became the great mystery of the neighborhood that this grown man was out running and finally someone got up the courage to run along beside him and ask him why and he said well i had a little heart attack and the doctor said if I didn't lose 60 pounds, I was going to die. And so you know what he did?

He went for a run. He had a big enough why. And he didn't care that he was the weirdo of the neighborhood because he was. I mean, this is a bunch of rednecks standing around on our front porch watching this weird guy run up the street. We had never seen anybody do anything like this, but he didn't care what we thought. He wanted to live. He had never seen anybody do anything like this, but he didn't care what we thought. He wanted to live! He had a big enough why. He didn't care what other people thought. He didn't care about his temporary discomfort.

He wanted to live. So he paid a price of ridicule by others looking on. He paid a price of discomfort to have a greater life. That's your why. You've got to have a why life. That's your why. You've got to have a why like that.

This is the Dave Ramsey Show. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life.

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