The Ramsey Show - App - How to Prioritize Old Debts vs. Active Debts (Hour 3)

Episode Date: February 28, 2020

Debt, Retirement, Budgeting 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 

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. Open phones this hour as we talk about your life and your money. It is a free call at 888-825-5225. That's 888-825-5225. Sophia starts off this hour in Tampa, Florida. Hi, Sophia.

How are you? Good. How are you? Better than I deserve. What's up? Fantastic. First time caller. Been thinking about this for a while, so I wanted to get a little advice from you.

My husband is coming into a little bit of money. He's kind of changed. We own our own business. He's changed his business. He's gotten a couple good deals. So by June, he'll come home with about $200,000. Wow, wonderful. Yeah.

We don't have a lot of debt. I mean, we do and we don't. So we took a HELOC out to start our business a few years ago. I only have like $50,000 left in that. And then I have another HELOC I took out to do some other things and we have like $60,000 left to pay off. I own four properties. My question is, this $200,000 that's coming in, should I pay off those HELOCs? Yes. And then have no debt? Because we just built our house, and we paid cash for our house. So there's no mortgage on our house.

There is a mortgage on your house. You have two HELOCs on your house. Those are mortgages. Those are mortgages. Right. But it's a house that we left. It's the two other rental houses. So the rental income is $200,000.

You don't have a HELOC on your personal residence. Correct. We built that cash. Okay. Right. So what is your household income in a typical year? See, that's the thing. It fluctuates.

It could be anything. Some years are good. Some years are bad. I had one what I asked. I said, in a typical year, what do you think you're going to make in a given 12 months going forward, not counting big deals that come out of the sky? $80,000 to $90,000. Okay.

And so $200,000 is a big jump. Right. Yeah. Okay. Well, yeah, you use it to clean up your mess, for sure. We knock out the two HELOCs. That still leaves us $90,000 to do something with. You have no other debt except real estate.

Correct. None at all. None at all. No, no, because I make sure if my credit card bill is $500 or $5,000 a month, I pay that off. Like, I don't, the only debt we have, you know, we have cars that we lease, but they're like $300 a month. It's not a big deal. Honey, the only debt we have, you know, we have cars that we lease, but they're like 300 bucks a month. It's not a big deal.

Honey, that's debt. Okay. You have car debt. Yes. How much do you owe on these stupid cars? Both of them together. All right, let me stop. Let me stop just a second.

Okay. The advice I'm giving you is wrong based on the conversation I'm having with you. Okay. Because the advice I give you is to clean up debt, never use debt again, think debt sucks, debt is a bad idea, and you're having a love affair with debt. You've got credit cards coming in and out. You've got cars leased. You've got HELOCs, and it's very nonchalant to you so when i tell you to clean up this debt and then you go back into debt that would have been bad

advice so the advice i give you is based on what i would do which is to get out of debt completely as soon as possible because that is the shortest path to not only financial peace but to wealth building because your most powerful wealth building tool is your income and you're giving it to credit card companies car loans and helox and i want you to stop doing that forever okay so i would use this money i would cut up your credit cards. I would get a debit card. I would try this thing out called a budget where you live on less than you make, so you're not running up debt on stuff every time you get ready to buy something. And I would never have a car payment again.

I would never have a HELOC again. And then I would begin to work on those other issues. So I'm going to send you a copy of the book, The Total Money Makeover. You need one, not only the book, but the makeover. And I'm going to give you the step-by-step plan on where to go, exactly how to get there. But I would not take this $200,000 and pay off the debt unless you're committed to a permanent change away from debt, because there might be, if you're going to live a different way, there might be a better use of that money you know living the way you're living now but i'm my advice is predicated on the idea that i'm always trying to get you towards wealth as fast as i can and the

shortest path there is debt free and stay debt free but um you you've not reached a point where you think debt is bad yet so uh but you called the guy who hates debt more than anybody on the freaking planet so that's what you that's the you walked into the bear cage so the bear is here and so hold on i'll send you a copy of the total money makeover because i want to help you and not just fuss at you and that'll show you exactly what to do and how to do it. Lee is with us in Chicago. Hi, Lee. How are you?

I'm wonderful. Thank you for taking my call, baby. Sure. How can I help? Okay, so I first want to say thank you. In August, you blessed my family with the curriculum for FPU. And since then, we've paid off all of our credit cards, one car loan, and a personal loan. Wow, look at you.

So, who to that? Go, go, go. I love it. And so now, we have one more car loan left, and then we have our student loan. Now, we want to get a position, and it's going to be in a couple of years because we have a lot of student loans, but we want to get a position to look good on paper for a home. So, my question is, with the student loans, I'm hearing a couple of things. My husband has his student loans. I have my student loans. They're all divvied up by individual. Some people are

saying combine it and make it one student loan no for me and one student loan for him or combine both of ours i would not combine both of yours there may be a slight interest rate advantage to combine in yours but probably not uh but keep them as individuals do not because if he dies or becomes disabled his student loans his federal student loans are forgiven but if you've got both your names on them that doesn't happen oh so do not combine them as a couple but if you wanted to consolidate yours and him consolidate his we're still treating it as a whole from a family perspective from a relationship perspective we're managing it as one but we're going to keep it legally separate um and if you consolidate the only reason you would do that is in order to save on the interest rate.

And so you'd look at your total interest rates across yours and go, well, you know, all of mine are at 11%, and I can get a 6% if I consolidate. Well, you'd do that, right? But if all of mine are at 5% and I consolidate and I get a 6 percent well that'd be bad okay you went up an interest rate they're able to so they're able to tell me that when i ask about well you need to know the interest rates on your existing loans and then when you talk about consolidating it they can tell you the consolidation and do not do a variable rate if you consolidate where they vary the rate back and forth. Only do a fixed. Fix.

Because if it goes up later, it takes away all the advantage. Okay. So if you take all your sevens and you move them to a five, but it's variable, and it goes up later to an eight, because it's variable, that wouldn't work. So that's why you always do a fixed. You want it to always be locked in at the better rate where you're going. So, hey, good question. You got it on the run, kiddo. Well done.

Well done. 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 health care costs. Christian Health Care 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 other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thanks for being with us, America. We're glad you are here. Adam is in Vancouver, Washington. Hi, Adam.

What's up? Hi, how's it going? Good. How can I help? I have a question just about investing and kind of direction that we should go. My wife has recently changed jobs, and so she had a pension through the state that isn't available anymore, so we kind of have an opportunity to kind of start something fresh and just what direction we should go. Okay. Is she vested in that? Can she roll that to an IRA?

She needs a couple more years, and so she will at some point go back to get vested in the future. But that's not at that point yet. Okay. So they don't release the pension to her in a lump sum as an option? Correct. Yeah, that's not an option. And so we're going to keep that there and try to just do something new from here on and then go back to that later. And the new job she has, do they have a 401K?

No, self-employed. Okay. Contract work. Okay, good. And, well, there's two things she can do there. One is called a SEP, a Simplified Employee Pension Plan, S-E-P-P. Okay. And if you don't have employees, that is a wonderful way to do it. And you're

allowed to put in a percentage. It ends up, the calculation ends up around 13.8% of your net profit on the business into a SEP IRA. And you put that in good growth stock mutual funds. Before I did that, I would simply fund a Roth IRA with the first $5,500. You can do $5,500 a year into a Roth, each of you, into good growth stock mutual funds, and I would do those first before I bothered with the SEP, and then I would do the SEP. Now, if she starts getting employees, the SEP can become cumbersome. Any employees that have been with you more than three of the last five years in your business have to be included in the SEP at the same percentage of their income as you put in as a percentage of your income. So if you put in 10% of your income, you have to put in 10% of all your employees

that have been with you more than three of the last five years. So I did a SEP in the early days of my business, and then I just rolled it to a traditional IRA at the time that I started having team members that had been with me more than three of the last five years. But in the early days when it was just me and then when it was a couple of others that hadn't been there three years, I started with that, and I did traditional IRAs as well. Nowadays you do a Roth IRAs, then do the SEP second.

And it's a really good way to put some money into retirement, get a good growth stock mutual fund. If you need more information on SEP or how to do stuff as a self-employed person like that, just jump on SmartVestor. Click SmartVestor at DaveRamsey.com. Put in your info. It will drop down a list of the SmartVestor Pros investment professionals that we recommend in your area. One of them will sit down with you and walk you through the detail on that.

I'm not in that business, but that's how you find the people I recommend. Brent is with us in Phoenix, Arizona. Hi, Brent. How are you? Hello, Dave. I'm doing good. Thanks for taking my call. Sure.

What's up? My question is I'm getting about $40,000, and it's going to be inheritance. I owe $9,000 on a credit card. I'm going to pay off my car. That'll be $12,000. I have no other debt. And I'm going to spend some of the money. There's a few things that need to be done to my house.

So I want to take at least $10,000 and invest somehow. I'm 58 years old, so I'll probably start a little late in life. I don't know whether I should put it in a 401k, an IRA, a Roth IRA. I'm confused. I've studied it, and I'm confused totally about the three. Gotcha. Okay. Well, with that $10,000, I would not do that. I would become debt-free, and I would do the repairs to your home and i would get on good tight written budget that you and your wife start looking at jump on every dollar dot com and get that start doing it it's easy to do because if you don't make the money that you have behave your ten thousand dollars not going to be near enough anyway you're going to have to

do a lot more than that so we teach a thing called the baby steps which we have shown to be the shortest path to wealth debt free first emergency fund is baby step three a rainy day fund of three to six months of expenses i'm going to use the ten thousand dollars towards that okay then i'm going to have you start putting 15 of your income towards retirement which is the questions you're asking okay the roth ira or a roth 401k operate exactly the same way in terms of how taxes are calculated they grow tax free but there's no tax deduction on the money you put in but the growth will be the larger portion of your money anyway and so you put money into the 401k or the roth ir roth 401k roth ira if you do not have a roth 401k at work and it's

only a regular 401k then i would do a roth ira at home that's better unless they match do you have a 401k at work? Yes, I do. I'm only contributing 3% now. I'm thinking about bumping that to 10, and they match 50%. Okay. Bump it up to 10. That's fine. Get that match.

And if they allow you to make that a Roth 401k, do that. Then, in addition to that, I want to get you to 15% of your income, so you can pick up a couple of Roth IRAs as well. At your age, you can put $6,500 a year for you and $6,500 a year for your wife into that, into good growth stock mutual funds, and get that started. And just like I just told the last caller, if you need help with that, just click SmartVestor at DaveRamsey.com to find the folks in your area that will help you get that done that we recommend. Elizabeth is in Raleigh, North Carolina.

Hi, Elizabeth. How are you? I'm great. How are you, Dave? Better than I deserve. What's up? Hey, so we are new to Dave Ramsey, and we just started the Baby Steps.

We just finished Baby Step 1 yesterday. Yay! Yeah, and we are starting Baby Step 2 today. I was listening to some of your stuff on YouTube, and something was about active debts and dead debts. We have one charge-off, two collections, and four active debts that are all current. My question is, do you smallest to largest with the active debts first? Yes. Okay.

The reason is you're actually paying money on those. The others are just sitting there. Gotcha. So you don't gain any room in your budget by paying off the old ones. Because you're not paying on them right now anyway. Yeah. So let's pay off. Yeah, when you pay off an active debt, you gain room in your budget

because you don't have that payment anymore. Okay. Is that logical to you? Yes, sir. Thank you very much. Yeah, so run two debt snowballs, one with the active and one with the inactive. The inactive just lays over there until you clear up the active debt, and you pay your way off the minimum payments on everything but the little debt

and attack the little one. Now, how much debt have you got in the active debt list? We have, don't laugh, we have a leased car at $9,000. We have a care credit at $4,000, Best Buy at $1,000, and Capital One at $1,000. Okay, so $15,000, $16,000. Yes. And your household income is what? $57,000 combined.

So how quick are you going to pay off $16,000? I don't know. Okay. Well, $57,000, $16,000, we've got to eat. I'm saying less than a year. We also have three children. I'm saying less than a year. Yes.

You ought to be able to pay off $16,000, making $57,000 in a year. Would you agree to that? Yes. Okay. Makes sense to me. It's about $1,500 a month out of your budget. Beans and rice. Rice and beans.

Kids aren't going anywhere. We're not going to movies. We're not going out to eat. We're cleaning up this dadgum mess. Then when you don't have any payments but a house payment, is that going to feel good? Yes, sir. Amen. Amen.

Then we'll work that other debt list. How much debt is on the inactive debt, the old debt? There is a charge-off from a repossessed car that is $5,700. And then like a gas bill, I think is what it was, is $243. And AT&T, which is... So you'll get that all cleared up very, very quickly. When you get ready to go to that car repo one, make sure you offer them less because they'll settle for about a quarter on the dollar usually

as far as if you're giving them cash on the barrel head. So you offer them $1,000, $1,500, $2,000. You'll settle that $5,700 right in there. This is the Dave Ramsey Show. We'll see you next time. In the lobby of Ramsey Solutions, Cameron and Jonna are with us. Hey, guys, how are you? Doing good, sir. How are you? Doing great. Welcome, welcome. Where do you all live?

So we're just south of Savannah, about an hour south of Savannah. Oh, a bit of a haul up to Nashville. Yes, sir. Well, welcome. Good to have you. And all the way up here to do a debt-free scream. Oh, yes. Love it.

And how much have you paid off? We've paid off a little over $108,000. Very good. And how long did this take? 30 months. Good for you. And your range of income during that time? So we started out around $106,000.

I had a career change right in the middle of everything. Dropped us down to about $80,000. And we've brought it up since then back to $108,000. Okay, cool. What do you guys do for a living? So I work with a family pest control business. And I'm a program analyst for the TSA. Okay, very good. Good for you guys. Very cool.

What kind of debt was the 108? It was a little bit of everything. Most of it was student loans. We had two vehicles in there. We had several credit cards, a TSP loan. You name it, we had it. Wow, very good. Okay, so did you sell any of the vehicles? We did. What'd you sell? Sold the truck. Your truck? Sold the truck. Sold my tractor.

It hurt. Oh, ouch, ouch. And we also sold our home. Yeah. Wow. Yes, so I had called your radio show. We were thinking about buying a family property, and I was really uneasy about that because our mortgage was

going to go up and um you had assured me that um what we were doing and you laid out a plan for us and everything has worked out just the way it we talked about on the radio wow very good very good she got the family property yes but got rid of the truck and the tractor yes sir yes okay and now you're debt free except the house that's right and how long have you two been married 10 years in september have you ever been debt free since you got married no no not even not even close not even before yeah i love it okay so what happened 30 months ago that lit the fuse because you guys blew up man yes we did um dave so we have a um a nephew who is four years old now but at the time he was one and um he was in foster care and uh we could not afford to fight for him and adopt him and we had to let him go back um into the into the system

um but through this we were able to get him back really yes so um bentley is our our fourth child we are still in a fight for him today oh wow yes okay so you've you've got him back but you don't have uh adoption yet not yet not yet you've physically gotten him you're taking care of him he's part of the family but you're having to finish the legal work exactly okay oh and he was a nephew yes uh so of you then then jonah yes okay jonna yeah jonna i'm sorry okay good wow hey that makes it worth it it does that's something to fight for that's worth fighting for that's worth selling a tractor tractor or truck for oh 100 yeah and you'll get another tractor truck there's only one bent. That's right. Exactly.

Yeah. Good. Very good. I'm proud of you guys. That's a big why right there. That gives you a reason to fight and scratch and claw and hustle and grind, doesn't it? Yes. And during the middle of this too, every one of our siblings, except for one, got married.

Of course. So we had to cash flow of quite a few um weddings yeah um but everything worked out and god's timing was just great and it was just perfect and that so whenever we got the call to come pick up bentley in the middle of the night we were there yeah we were able to do it absolutely wow very well done you guys very well Well, that's good motivation. What do you tell people the key to getting out of debt is? The key is to make sure you and your partner are on the same page. The budget, you know, you have to follow all the steps as you lay out. But if one person is, I'm going to do this, and the other one's not so much, it's not going to work.

Did y'all try that not so much part in the very in the very beginning okay um it was it was a little difficult um but once we started you know feeling like we could actually do it and things started rolling a little bit it got a lot easier okay without throwing anybody on the bus, who was dragging her feet? Which one of you? I would say in the beginning, she wasn't dragging her feet. She was just reluctant. No, I'm not really sure that we could actually do it. You're such a smart man.

So, Dave, we have never done a budget before. Right. We didn't even know what that was. And so Cameron had found you on youtube and brought the idea to me and i was like that you know it sounds really good um but i found fpu at our church our church was putting on so then it became my idea oh once it was your idea it was okay yeah i kind of became a budget monster oh it went the other way. And about six months in, Cameron was like, I'm so proud of you. I'm glad that you like doing the budget, but I can't do it every night in the bed.

It was constant. It was just, you know. You're killing me here. You're killing me. I love it. We ended up, you know, just doing a weekly meeting. Good. That's what you're supposed to do.

And it's been much better since then yeah wow well you made huge progress and for a very very good reason and uh you did such noticeable things people around you friends and family had to notice i mean the truck's gone the tractor's gone jobs are being changed um i mean there's so much that's visible with what you did so did you have more cheerleaders or people saying you were crazy i would say i would say nobody really said you guys are crazy um but they you know you can tell that they're like yeah okay that's that's nice i just don't think this is going to work for you um but i wouldn't say that anybody told us, you know, no, you're doing the wrong thing. Right. Everybody seemed to be open to it, but just kind of.

Our sack lunches got picked on a lot at work. I bet. That'll do. But I had some really good friends. Who were your biggest cheerleaders? My three girls at work. There you go. Were our biggest cheerleaders and some friends girls at work were our biggest cheerleaders

and some friends of ours from back home that we coach baseball with. Okay. All right. Cool. FPU group, too? Yes. Hopefully. Yeah.

Good. Very good. And how about these two guys? Have they been involved? Oh, yes. Yes, sir. And their names and ages? So this is Bo.

He's 10. And this is Gunner. He is 8. Okay. And Bentley is how old? Bentley is 4. And Bentley's 4 now? Yes.

Okay, all right. I thought maybe when you started this he was 4. Okay. Wow, wow, all right. So he was a baby. He was. He was 1 years old when we started. Wow, wow, what a journey.

What a journey. And 4 years old, good. Well, we hope we get to see him one day around here soon. Good stuff. All right, guys, We're proud of you. Way to go. Very well done. You're heroes.

We got a copy of Chris Hogan's Everyday Millionaire's book. You will be one. You are on your way. You're debt-free. Paid off $108,000 in 30 months, making $106,000 to $80,000 to $108,000. Cameron, Jonna, Bo, Gunner, and Bentley, count it down. Let's hear a debt-free scream! Go ahead.

3, 2, 1! We're debt-free! We're debt-free! That's how it's done! I love it. That's the sound of a family tree being changed. You know, I was with a buddy of mine the other day that's got just a huge heart for the foster care system, and he was telling me that there's only 100,000 kids in foster care today that are eligible for adoption.

There's 16 million of you listening right now, only 100,000, and we would wipe out, eradicate foster care adoption needs domestically. That would be a pretty cool thing. And you know what? If you got out of debt, if you lived like no one else later, you could live and give like no one else. See, they weren you got out of debt if you lived like no one else later you could live and give like no one else see they weren't getting out of debt to buy bling bling

to buy stuff they were getting out of debt to pay the legal bills to get control of this young man's life to be able to be a blessing to him wow wow to get control of this young man's life, to be able to be a blessing to him. Wow. Wow. This is The Dave Ramsey Show. Thank you. Our scripture of the day, 1 Corinthians 16, 13. Be on your guard. Stand firm in the faith.

Be courageous. Be courageous. Be strong. Thomas Jefferson said, In matters of style, swim with the current. In matters of principle, stand like a rock. Ah. Problem with standing like a rock is water just runs all the time you know but otherwise you know what if you don't have principles

you're just a fish i mean you just go with whatever goes along i mean whatever stupid hurtful bad fleshly horrible nasty stuff that people go want to do you just go along with it and you're just one of them and i am too when i'm just don't when i swim with the current it's a good quote i've never heard that from jefferson in matters of style swim with the current in matters of principle, stand like a rock. Well, where's your budget? You're supposed to have every dollar spent on paper before the month begins. Every dollar needs an assignment.

Every dollar needs a mission before the month begins. That's a zero-based budget when you're making a budget, and that's the kind of budget that works. Each month, do a unique budget. Now, there's parts of it are going to be the same, but no two months are exactly the like. So before the month begins, calculate your income and give every one of those dollars an on-paper assignment. We use that principle because we know that people in Financial Peace University that have the best success use a zero-based budget. So we used that principle three years ago, six million people ago, when we designed our budgeting app, which has become the world's best budgeting app.

Well, it was the best one. Now it's the most popular and the best. Growing by leaps and bounds. Over 6 million people are using the EveryDollar app now on their phone, on their computer for free to set up and make your first budget. It's free. 6 million budgeters are using EveryDollar, downloading the app for iTunes or Google Play or sign up for a free account at EveryDollar.com. Every dollar needs an assignment. Nathan is with us in Indianapolis.

Hi, Nathan. Welcome to the Dave Ramsey Show. Good afternoon, Dave. May I answer my phone call today? Sure. How can I help? Well, I had a what would Ramsey do question that came up in my

week this week. I was like, well, nobody better to call than the man himself. I am currently on baby step two with my wife and my daughters, and am in sales and have been for about eight years after eight years of service in the Army. And I am trying to figure out... Your phone is breaking up. Can you speak directly into it, please?

Sure. Let me get a little somewhere. That's much better. Thank you. I am currently in sales and trying to find out if it's a good idea. I'm looking at a possible career change and changing from sales into public service as a police officer. But while I'm doing Baby Step 2, I'm trying to see if that's a good idea, as it would be a volunteer program and would take any evening time up that I would use to do more sales

and pay off the debt at the time. Okay. How much debt do you have? Right now, it's roughly around $97,000. And what is it on? We have student loans, car, and credit card. Student loans is roughly $50,000. How much is the car?

$19,000. Okay. And how much is the credit cards? It would be the remainder of it, credit card and medical bill. $28,000. Okay. It would be the remainder of it, credit card and medical bill. Twenty-eight. Okay. Hey, and what do you make a year? Right now it's around $50,000 or so.

And what would you make as a police officer? It would start about the same. Okay. And how long would it take you to become a police officer? The reserve program is volunteer, and it would take me anywhere from 10 months to do the training in the evening times and weekends. And if I got picked up by the full-time, that's what it would be, around 50,000 start first year.

Okay, I'm sorry. So how long would it be that you're giving up your evenings? It would be two nights a week and then two Saturdays a month. For how long before you became a police officer? About ten months. So ten months from the time you started, you'll be a policeman making $50,000. Well, no, that's just the reserve. It's a volunteer program.

I got that. That's what I was trying to get at. And so after that, after your reserve after 10 months, now you get to work for free in the reserve. For how long before you become a policeman? They said you can actually be picked up in the process of becoming a reserve. If they have a spot open, they can pull you straight from that. And how long?

Yeah, that's what they can happen, but that's not if they're trying to get people to work for free. So what normally happens and what's your worst-case scenario? How long is the worst case before they pick somebody up? We don't know. It's just whenever. They haven't given any direct answers, but they do have two openings at the police department. But it's a matter of right now that the police academy

has kind of backed up on their training, too. Okay. All right. So you can do the Police Academy training at night and on Saturdays? Correct. Well, it's the reserve program. Oh, I mean, let's say they hired you for one of those two slots. Can you do the training on nights and Saturdays?

For the reserve, yes. No, those two slots. Are the two slots reserved, or are they policemen? The two are active, but those we don't know if they're going to hire, when they're going to hire for those at this point. So that's the problem. It would be reserved until they decide they're going to take somebody over. And how much do you make extra by working at night and Saturdays?

Right now, I have no overtime option, but I can be working on proposals and stuff sent out if I do that at night at home. How much is it going to cost you in money if you pursue this thing? In missed dollars. That I'm not sure of. That is the answer to your equation. Okay? If it's not going to cost you anything,

because you can work on the proposals and stuff during downtime during the day, then you can go forward. If it's going to cost you $25,000 in missed sales, no, you cannot go forward. You need to stick with it and clean this up for the sake of your family. Right. So you need to figure out what this is going to cost you in lost sales to screw around with a free reserve program that may or may not result in you moving into the career that you think you want. Correct. Okay. So I'm with you. I think you need to make the Okay. So I'm with you.

I think you need to make the move that direction. But we've got to do good critical thinking and analyze, okay, I'm giving up this, but is there a 90% chance I get picked up during the time? How quickly are they going to activate these two slots that are open and fund them with the budget? If so, if they can hire you you now subject to you knocking out the police academy and they'll pay you to go to the police academy then you know go and just live your life right because it's a break even and you get to do what you love so i would do all of that but but if you're going to be you know jerking around with this thing for three or four years while they pull you along on a string with

a carrot, you know, and someday, well, maybe when the budget clears, well, maybe the reserves, maybe not. We might hire a brother and all that kind of garbage. And it's going to cost you $25,000 a year while you're trying to get out of debt. Then, no, you don't need to do that. So there you go. That's what I would do. Thanks for calling in.

That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer, and phone screener. I am Dave Ramsey, your host. We'll be back before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify?

For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.