The Ramsey Show - App - How to Prioritize Spending Your "Extra" Money from Tips (Hour 3)

Episode Date: May 1, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Kevin is with us in Scottsdale, Arizona. Hi, Kevin.

Welcome to the Dave Ramsey Show. Hi. Hi. How can I help? Yeah, so I'm going to have a... I got married in Japan last year, and I'm the sponsor, an overseas wife. How do I prepare for that financially? What does it cost?

When I searched online, it cost between $1,200 to $5,000, depending if I want an attorney or not, which I don't plan on getting. Okay. So you are, I don't know much about those laws, but so obviously when you marry an American citizen, you are able to enter the states, right? Yes. Okay. And so that makes you her sponsor? Is that what you're saying?

Yeah, I'm going to be her sponsor. Basically, I want to prepare now for a good life later when she comes over. It should be about end of this year, early next year. Why so long? We're doing a CR-1 visa that takes a long time based on what I read from other people. Oh, it takes a while to get the visa. That's all you're waiting on. Yeah.

Okay. All right. Interesting. I didn't know it took that long if you're married. I don't know that much about it. I'm really pretty ignorant about it. Okay. But basically, you got a $1,200 problem.

What's your income? $40,000 before tax. Okay. No debt. Own my car. Rent house with the two roommates pay 250 a month for rent uh no premiums on health insurance okay so how quick can you save up twelve hundred dollars like a month well i already have thirty thousand saved okay so why do you need to prepare for a $1,200 event? No, I mean, I want to prepare for the future when she comes here and she has no job yet, and I need to take care of her and things like that. Do I throw this money, the $30,000, do I just keep it in this online savings

account I have or throw it in? Well, what i would always tell folks is number one to be debt free and number two to have an emergency fund of three to six months of expenses that is more than a couple living in scottsdale needs thirty thousand dollars is more than three to six months of expenses in your household making forty thousand dollars a year so you've got a super large oversized emergency fund is what you have right now, and you have no investments and no debt. Is that correct? I have a maxed out rough IRA.

Good. My job does not offer any retirement right now. Okay, good for you. Well, I would leave the $30,000 there to cover any possible legal fees or any expenses you've got and obviously when she comes you got to kick your roommates out or you got to kick yourself out of there leave them with that house and go get you a place to rent for you and your bride and so you're going to set up a new household and that's going to take some money maybe a little bit of furniture maybe some deposits

and some stuff like that and then you set yourself up on a budget, and you too can live on $40,000 a year. That's possible. It's very possible. Lots of people do it. And then on top of that is going to be any income she creates as she does get a job when she does get here. So I think you're in fine shape to make the transition. Use the money for emergencies only and only for some of it only

for a transition again transition meaning setting up your own household and whatever legal bills or whatever you've got or whatever fees you have to pay associated with the sponsorship and so on and but it sounds like you're ready financially you got the money i would leave that 30k sit there as your emergency fund and your transition fund. Now, when the smoke clears and everything settles in, I'm probably going to move some of that money towards my house down payment fund and leave the rest of it in as my emergency fund. But that's after everything.

She's here. She's working. We're settled in. We got the rhythm of life going at that point. Alia, I think I said that right, is with us in Jacksonville, Florida. Hi, Alia. How are you? Hi, Dave.

I'm doing okay. Thank you for taking my call. I was calling because I've been needing total money makeover repeatedly, and I've been doing a monthly budget for about six months now, but I really need a little more help making baby steps work I am on a lower income what is your income I'm sorry what's your income I bring home about I bring I'm sorry not about $1,296 each month so that's about $15,500 annually what are you doing working on getting a bigger income yeah what do you do uh i work for the state doing what um essentially data entry okay all right good

so you're looking for a better job yes sir i am okay you have a degree i'm sorry you have a degree yes sir i do in what information technology good you ought to be making four times that Okay. Do you have a degree? I'm sorry? Do you have a degree? Yes, sir, I do. In what? Information technology. Good. You ought to be making four times that. Well, the job market for it in this area is really bad. Really? Well, the better paying jobs, if you don't have the experience,

like coming out of college, most of the well-paying jobs in this area, they want you to have specific experience or specific criteria, like, oh, you need to have five years' experience with a job or something, and I don't have that. Okay, let me stop you for a second. That's simply not true. That's the excuse you've used to stay in this crappy job you've got. Listen, listen, I have information technology people working on our team.

Jacksonville, Florida is not exactly a low-tech area. It's a high-tech area. That market is booming. And so if you can't get a job based on experience, get a job making half of what you're worth, which is still double what you're being paid now. You're worth $60,000 to $80,000 with a little experience under your belt. And when you start believing that you're in control of your destiny. But right now, I mean, if I can get you making $30,000 or $40,000 and get your foot in the door in technology instead of sitting there in a dead- mess that you're in today uh that's that's what that's what's going to move the needle for

you you got no mr ramsey i've continued to apply to about 10 to 20 jobs each week since i since i've had this position i'm not at all trying to stay here i just needed something to start okay start making money. Yeah, I got you. All right. What I'm going to suggest is that you start thinking about who you know that works in any one of those companies and ask them to help you get your foot in the door and tell them you will work cheap to get in there and get you in the door. Because right now all you're doing is filling out applications and getting rejections.

Yes, sir. And you're getting vanilla standard template boilerplate rejection letters that say we want experience. We want experience that just says I didn't like your application, I'm not hiring you. Instead of you never really got to talk to anybody. I've got to get you in and get you talking to some people. So let's start trying to connect to somebody that actually works there inside that company that you know and say, hey, what have I got to do to at least sit down? I will work cheap just because I'm hungry.

I want to get started, and I'll add value to your organization. And that's where we've got to get you to. You know, I still get lots of questions about ID theft, and now is a good time to delve into this a little deeper. ID theft has become a huge problem, and most people think it's all about financial fraud. But there are so many other areas where people are being victimized. Tax refund fraud, for example, is out of control. Last year, the IRS paid out over $3 billion in fraudulent refunds. Thieves are filing false returns and stealing your refund.

Credit monitoring and prevention plans don't detect this type of ID theft and don't help resolve the problem. That's why the only plan I have for my family and all my team members is through Zander Insurance. They cover all types of ID theft, including tax refund fraud and work with the IRS to get your refund resolved. Go to ZanderInsurance.com or call 800-356-4282. This is the smartest, most affordable way to protect yourself and your family.

That's ZanderInsurance.com. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means even if you mess up, if you mismeasure or you pick the wrong color, they're going to remake your window blind for free. With Blinds.com, you also get free samples, free shipping, and with the new promos they run every month, you're going to save money. Check out the promo code RAMSEY at Blinds.com. Aaron is in Virginia.

Dave, I have two debts left to pay, and they're exactly the same amount. Do I pay off the student loan or the credit card first? The credit card. It has a higher interest rate and more exposure to you. But you're going to get them both paid off anyway very quickly. So it doesn't really matter much but you know when in case of a tie we go with interest rate but otherwise we go smallest to largest the tie would be the balance you have the same balances we go from that to that

um we have a ton like millions and millions and millions of you listening that have come to us in the last 18 months or so. A lot of new folks have joined the tribe in the last little while. So let me kind of walk you through after doing this for 25 years here on the air and working with you. One of the things I have learned to do, I don't always do it right, but I've learned to do is listen to what you're not saying or what, so to speak, reading between the lines. There's a Hebrew word called shama when you're reading scriptures. The question behind the question.

The problem behind the problem. The opportunity behind the opportunity. There's a thing that happens when to your language. The Bible says out of the abundance of the heart, the mouth speaks. So the words that you use, even your sentence structure, reveals oftentimes what's going on in our lives. Me too, in our lives. Whether we're feeling optimistic or angry or afraid, whether we are having the best time of our life or the worst time of our life.

We're terrified. Sometimes people being on the air here, a caller, they're nervous. We've never lost a patient, but it's natural to be nervous to be on the radio in front of 15 million people. I mean, your career position. making broad statements as absolute dogmatic fact, and I'll give you some examples, you can tell that the situation is no longer the problem. The way you're looking at the situation is the problem. Here's an example. Dave, there are no rental properties in our city under X, $1,500 a month.

I have to get a rental property that's $1,500 a month. You don't understand our city. There is no such thing as a rental property. These absolute statements under $1,500 a month. I have to pay $1,500 a month. You just don't understand. That's what it costs to live here. There's no rental properties under $1,500 a month.

See, when you make a statement like that, you are not making an accurate statement about your area. You're making a statement about your view of your area. And somehow you're wanting to get a pass on math, and you're saying, well, I'm stuck, and so I'm just going to go ahead and be stupid. People like me can't get ahead, and you're doing a glass half empty kind of thing. You're being a pessimist instead of an optimist, and in philosophical terms, you've become a fatalist.

Well, you don't understand. The only way you want me to be homeless, it's either homeless or $1,500. And that's a fatalistic viewpoint. It's also wrong. It's stupid. Because everybody listening that lives in that city knows that you can find something under fifteen hundred dollars in that city. Right. So when you make a fatalistic, absolute dogmatic statement like that, what it really means is your spirit is reaching hopelessness.

You're feeling stuck. It doesn't mean there aren't any rental properties that you can get. Find you move a little bit further out of town. You live in a different area than you want to live in, maybe in that town, but you can always find something to rent different than that. You can always do different. And that's why I was jumping on her case a minute ago, the lady that called from Jacksonville, Florida, young lady.

Everyone in Jacksonville, Florida, that is hiring information technology requires five years experience. To which my mind immediately says, well, that's absolutely not true. That is just not true. That's what you've been told, and you've been beat up and rejected a lot, but that's just simply not true. Is there another way to get at your job look okay but you know there's not a single company out of uh what what is jacksonville two three million people you know there's not a single company has ever hired anyone with a four-year degree in information technology without without experience. That's absurd.

It's just ridiculous. Now, that doesn't mean she's ridiculous, but what that says is her spirit in that situation, she's just, I don't know what's happening with her. She's putting in applications, getting rejected. Her job hunt process is wrong. She's not been able to get her foot in the door. I didn't have time to give her full career counseling and all that, but I'm not picking on her i'm just teaching you when you start using statements

like that no one in our town leases a property for under 1500 no one in this city of three million people has ever hired an it person without experience that's just ridiculous. No one has ever hired a person that's bald. No one has ever gotten married that was overweight. You know, I don't know. That's just bull. You know, I mean, you know, but that's just, these are, when you hear yourself turn into a drama queen like that or drama king like that, that says there's something going on inside of you.

It's not reflective of the situation because of the absurdity of your statement and so what i'm teaching you is this i'm not picking on her what i'm teaching you is i do that too i've done it too but when you go to an absolute fatalistic position like that in drama queen mode what you're doing is you're slipping off into the land of victim i'm a victim because no because you just can't get ahead here. A little man can't get ahead. You don't know about the isms, the sexisms and the racisms and the republicanisms and the democratisms and the baldisms and the fat people isms.

You don't know about all the isms. The isms will hold you back. The isms will hold you back. They do. Racism's real. It's you back. The isms will hold you back. They do. Racism's real. It's out there. There's some jerks out there. Sexism is real.

Some people don't think women are as smart as men, and these are really dumb people. You know? I mean, it's real. It's a reality. But do you meet people that make it in spite of that? Yep. In spite of that? Yep.

In spite of their ism. I got a hillbilly ism. I'm a hillbilly. So, you know, it's really difficult to get some radio people in the northeast to treat people with a southern accent as if they're intelligent. They think we're operating this thing out of a double wide. Because I have a southern accent. It's a stereotype. You know, I'm worth several hundred million dollars.

We have 700 employees here. The company does $200 million a year in volume, but we're not real smart over here in the south. You know, isms are real, people. You've got to overcome them anyway them anyway you got to go win anyway you can't slip off into well you can't you know nobody in the northeast will carry a southern guy on the radio well some people won't that's right but they're the ones that are missing out on all the revenue i'm producing for their competitors. And I just go up there and win anyway. We go into California and win anyway with our little southern charm.

Hello? We go win anyway. Is it hard? Yeah, it's hard. But I'm not going to assume victim status and start making drama queen statements that are fatalistic. Be careful what you're saying with your mouth. It reflects the condition of your spirit.

Have the spirit of a victor, not a victim. This is the Dave Ramsey Solutions, Gerald is with us. Hey, Gerald, how are you? Great, Dave. Doing better than I deserve now. I hear you, man. Where are you from? I'm from Fairbanks, Alaska.

All the way to Nashville to do a debt-free screen. Wow. Good for you. How much have you paid off? $180,000 in seven years. Way to go. And your income during that seven years range? 75 to 100, and that included some rental income.

Okay, very cool. What do you do for a living? I'm a fish biologist up on the Yukon River. Neat. Yeah. Very fun. Good for you. A couple fish there.

There's a few. So $180,000 worth of what kind of debt? This is $40,000 in consumer debt equally between a truck loan, student loans, a credit card, and a signature loan. And then my home loan of $50,000 and then a rental property of $90,000. So you paid off your house and your rental and all your debt. You're 100% debt free. 100%. I am looking at weird people. It's awesome.

I love it, man. Congratulations. Well, that's a perfect seven-year track, man. Well done. How old are you? I'm 46. And everything is paid for. Everything's paid for.

I haven't been debt-free since college. I love it. Wow. What's the house worth? Well, Dave, it's not worth a lot. I thought I was going to get rich in real estate, so I bought a couple of fixer uppers and realized it was a lot harder than the TV shows make it out to be. You think? Yeah. So what's your home and what's the rental worth each?

My home's worth probably $60,000 and then the rental is probably worth $130,000. Oh, okay. So the rental's nicer than your place. It is. It's a duplex. Oh, okay. All right. Very cool.

So you got a couple hundred thousand dollars and paid for real estate. Yep. Nice. I like it. Congratulations. So what put you on this wild journey seven years ago? Well, seven years ago I was driving driving across town, going to the bookstore, thinking about borrowing more money to buy another rental property.

And I heard this crazy guy on the radio yelling, I'm debt free. And I went straight to the bookstore, went to the shelf, pulled financial piece off the bookshelf, read it in the bookstore. Wow. Put it back on the shelf, grabbed more than enough, bought that one, and read that in a few days. And from then on, I was on, and I looked for a class that spring and took the class. You went to Financial Peace University in Alaska? I did.

Wow. I've taken it four times and led it a couple of times. Well, thank you. Thanks for leading it. That's awesome, man. Well, over the seven years, that keeps your batteries charged, right? It does. That was one of the secrets is I took the class once a year, and I was able to get motivation from the other students

and then also tell the other students that it worked. Yeah, I'm on my way. Yeah. And now for sure you're telling them. Yeah. You got the documented proof right here on YouTube. students that it worked yeah i'm on my way yeah and now for sure you're telling them yeah you got you got the uh documented proof right here on youtube it's gonna be uh the debt-free scream i am not even 50 and everything is paid for yeah and you make 75 to 100 doing that you can make a

dadgum good living man that's beautiful yeah well done so what do you tell people you've been leading the class you've done it. You paid off everything. What is the secret to getting out of debt? The plan works. Have faith in the plan. There was a few times where I thought, well, maybe I should tweak it. The baby steps you're talking about? The baby steps.

And then I would listen to the YouTube, and you would tell people, don't tweak the steps. Just stay on the plan. And that's what I did. I just did the baby steps, and it worked. No ish for you. No. It went straight at it. Yeah.

Perfectly. You submitted yourself to the process. I did. My plan wasn't working. No, I hear you. Well done. Very well done. Well said.

What's the hardest part of this over seven years? The hardest part has been telling myself no. And most of my family lives in Iowa. That's where I grew up. And so I haven't really been able to come back and visit like I want to. So that was probably the hardest part was saying no and not being able to go back to visit family. And now you can. Now I can. Live like nobody else.

Later you can live and give like nobody else. You're in a position to do it. Well done. So what are you going to do? What are you going to splurge on to celebrate? You know, when I was in debt, I would wring my hands over the minorist purchases. I would spend hours looking for a right shirt at the right price. And now I can just go to the store, and if I see a shirt I like, I just buy it.

There you go. That's splurging. Yep. If I want a steak dinner, I just go get a steak dinner. That sounds kind of good. Yep. Good job. Well done, sir.

Proud of you. Did you have people cheering you on, or did you have people detracting? I had people cheering me on for the most part. Again, I took the class a lot, so I got a lot of motivation from the other class members. And most of the any detractors tended to be people who would hear what I was doing, and they'd go, well, I don't think I can do that or that's not possible for me. And so I'm here as an example that you can do it.

Anybody can do it. Anybody can do it if you just decide to. Well done, sir. We've got a copy of Chris Hogan's retire-inspired book for you. That's the next chapter in your story to be a millionaire. Well on your way to do that. I'm looking forward to the millionaire theme hour in my future. There you go.

I'm ready to have you on as soon as you hit there. You're on your way for sure. Yeah. And, of course, outrageously generous along the way. So, very well done. All right, Gerald. Fairbanks, Alaska. $180,000 paid off.

That's his house. That's his rentals. That's everything. Seven years, $75,000, $100,000 paid off. That's his house. That's his rentals. That's everything. Seven years, $75,000, $100,000 income. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free!

Yeah! That's it. I love it. I love it. Man, amazing. Great job, sir. Very, very well done. Very well done.

Man, doesn't get any better than that, does it? Matthew is on Facebook. Dave, how should I make a monthly budget with a commission-based income to focus more on the other? Well, in the back of the Total Money Makeover book or any of our books, the Financial Peace University materials all have the budget system in it, which is just a set of forms. One of the forms is the Irregular Income Planning Sheet, Matthew.

The Irregular Income Planning Sheet works like this. The things that you cannot get to in your budget that you want to do, should do, whatever. They don't make the cut on your regular budget, meaning the amount of money you know you can count on. You do a regular budget on that. The things you can't get to, you make a list of those things and say, I want to do this. I want to do this. I want to do this. I want to do that say i want to do this i want to do this i want to do this i want to do that i need to do that i should do that and make a list of those things and look at them with a dollar amount beside them and say which of these is the most important on here if i make enough above my regular budget to do one thing? Put a one beside that. What if I make enough to do one other thing? What would I do? Put a two beside that. What if I make enough once I've done

those two things to do one more thing? What would I do? You put a three beside that and so on. You keep making your list from most important to least important. Rewrite it in that order from number one through number whatever. Most important to least important. Rewrite it in that order from number one through number whatever, most important to least important. And then when money comes in beyond your regular budget, beyond the amount that you knew you could count on, is you have a better month, a bonus month, a commission month, you know, you're self-employed, whatever it is.

Maybe you're working for tips and you have a great, great tip weekend. What are you going to do? You go down that list of priorities as far as you can. And then mark through it and rewrite the list because now some of those things don't have to be done anymore. You've already done them. So, again, you go, what's your most important thing? Go ahead and do that as soon as you get some money. What's your next most important thing?

Go ahead and do that as soon as you get some money. What's your next most important thing? Go ahead and do that. And a lot of times it will be like your debt snowball. Your next smallest debt, your next smallest debt, your next smallest debt. We're going to throw money at that. It could be getting your baby step one in place, that baby step, that baby emergency fund of $1,000. It could be, you know, I can't afford to buy this item for the house.

We really need it, but I really can't afford it until we get some extra money. And I put that in the budget. Whatever it is, it's in order, and you go down the list in order of importance, in order of priority. This is the Dave Ramsey Show. Our Scripture of the Day, Proverbs 12, 11. Whoever works his land will have plenty of bread, but he who follows worthless pursuits lacks sense. You know what? I have done both. You ever followed a worthless pursuit?

Actually, I did that last week. I actually watched about two hours of television. That was like following a worthless pursuit. It was a complete freaking waste of time. It was like eating two pounds of cheesecake. It was just, you know, you're just sick when you're done because there's nothing good that's gone into your body or your mind. I just completely wasted two hours of my life.

I'll never get back. I followed a worthless pursuit. But whoever works his land will have plenty of bread. But he who follows worthless pursuits lacks sense. So I guess the key to that is spend more time working your land than you do following worthless pursuits and you'll come out ahead because we all do a little of both you know it's just the ratio right is it more working and less worthless pursuits or more worthless pursuits and less working yeah there's your problem bob hope said it this way i've always been in the right place at the right time of course i steered myself there

yep yeah that luck thing it always comes with work doesn't it reese is with us in new jersey hey reese how are you hi mr ramsey i just have a quick question for you um i've been juggling the idea back and forth in my head of getting rid of my current vehicle and downgrading to a cheaper one in hopes of expediting my baby step two. I just kind of wanted your thoughts. What do you owe on it? I owe $14,500. What's your income? $49,000 in my main job and then $5,000 in a side job. Good for you. How old are you?

26. Good. And how much other debt other than the car? This is where it gets kind of sticky. The majority of my debt is student debt, just shy of $47,000. Okay. And that's it. What do you owe on the car? is a student debt just shy of $47,000. Mm-hmm. Okay. And that's it.

What do you owe on the car? $14,500. Oh, you owe $14,000. What's it worth? It's worth, Kelly Blue Book, I just checked, $13,000, so I'm upside down $1,500. Mm-hmm. Okay. All right.

So if I just do, I do big number math is the way I do this. Here's how it works, okay? So I got $14,000 and $40, got 14 and 40 is 54 in debt, right? Yeah, 45 for the student loan. Oh, I'm sorry. Okay, so 59, 60 in debt, okay. Okay. And you're making, you said 40 plus the part-time job, right?

Yeah, 49 plus 5 for a total of 54. Okay. So if we pay off $30,000 a year for two years, you're debt-free. Out of 54, you're 26 and single. That's beans and rice. You can do that. Yes, sir. Or instead of paying off 30 in two years, you could pay off,

what would it be if we took that $14 off, right? That would be $7 less a year. And so instead of $30 a year, it would be $23 a year. So it's $2,000 a month if you don't keep the car. It's $2,500 a month if you do keep the car. If you're unwilling to cut your budget that deep, you should sell the car. Okay. Because I would want you to be debt-free in two years.

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

Yeah, I really do like it a lot. Cool. What kind of car is it? Toyota Corolla. That's a good car. Yeah, yeah. It's not bad. They're good cars. Exactly. That's kind of my... Yeah, yeah. It's not bad. They're good cars.

Exactly. That's kind of my – sorry, go ahead. No, it's okay. It's just if I'm in your shoes, and that's the way I answer questions here, I would be willing to cut my lifestyle in order to keep my car. Okay. That's kind of my thought process because it's like I can, you know, sell it, downgrade, gets me out of debt, you know debt maybe six to eight months faster.

Exactly. But I'm out of debt with a hoopty as opposed to eight extra months, and I have a car that should, in theory, last another 20 years. I don't know if you go that far, but it'll last a lot longer than a hoopty, and you won't turn around and move up in cars as soon as you finish that snowball. So your theory is right, except for that last little bit. But the, yeah, and here's the thing. You just got to commit to $2,500 a month.

Okay. That's $30,000 a year. That's $60,002. And so, and until I get to that, we don't eat out unless you're working in a restaurant. You know? And we're not going to the movie unless you're working there. And you're not going to spend any money. You't have any money you're getting out of debt so you're going to sacrifice social life party time whatever it is you do with money that you used to

do with money and you're going to put all your freaking money on this and you're going to be done by the time you're 28 can you imagine what it would be like to have no payments in the world i literally can't imagine you're're on your way, brother. You're going to do it. And I'm going to get to talk to you. You're going to call me back and do your debt-free scream right here. I can tell. I'm coming down to Nashville for that.

I love it, man. I'll give you a personal high five. Love it, man. Awesome, man. Get after it, brother. You got this. Jordan is with us. Jordan's in Bloomington, Indiana.

Hi, Jordan. How are you? I want to be better than I deserve. Good for you. How can I help? I am a 25-year-old husband to a wonderful wife and a three-month-old baby girl that we have. Woo-hoo! Life is good.

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

So we had to have that one for the baby. So how much did you spend that you didn't have to spend? What's this car cost? Actually, we're not doing bad. It's $8,500 is all that we have left on it okay um and we just bought it before the baby came so all right okay number one rule if you're going to win with money no more justification buying stuff for babies fair enough babies have survived centuries without air-conditioned cars.

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

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

I want to be debt-free by 30. Okay, how old are you? 25. Oh, you're going to make that easy. You're going to make that easy. You're just going to have to work like a crazy man, live on beans and rice, rice and beans, get the every-dollar budget going, and get on your phone with your wife, sit down.

Both of you set the goal and say, we're going to live like no one else so that later we can live and give like no one else. But we're going to pay a price. We've made a mess. We've got car debt. We've got student loan debt. We've been sloppy and disorganized. But now it's grown-up land. Now we've got baby.

And now we're going to start being grown-ups. Adults devise a plan and follow it. Children do what feels good. So you're going to sit down, get your budget going, and your budget's just where you make every dollar behave. You squeeze it by the neck until it can't breathe. You make every one of those dollars behave. You list your debts smallest to largest, and you pay them off in that order.

Pay minimum payments on everything, and attack the little one and work your way right down. I'm going to send the baby a gift. It's the Total Money Makeover book for his dad and his mom. So hold on. Kelly will pick up, and we'll send it to you. It'll show you exactly how to do this stuff. That puts us out of the day. Ramsey's showing the books.

We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show.

If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to like to do your Debris Scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.