The Ramsey Show - App - I Have Credit Cards Because I Can't Find My Scissors (Hour 2)

Episode Date: August 13, 2018

The show about you

Live from the headquarters of Ramsey Solutions, this is the Dave Ramsey Show, where your life and your money takes center stage. I'm Chris Hogan sitting in for Dave Ramsey. But America, we are here for you, so we want to hear from you. So you can give us a call. If you've got a question, you need some guidance, you want to know what to do with money. If you're tired of being stuck and you finally want to chase down some progress, you want to know what to do with money. If you're tired of being stuck and you finally want to chase down some progress, I want you to call us. The number to call is 888-825-5225. Again, that is 888-825-5225. If you're on social media, you can

also tweet us or send us a message on Instagram. It's at Ramsey Show. Well, I'm so excited to be here with you all. I've got a lot of things going on as a company's at Ramsey Show. Well, I'm so excited to be here with you all. I've got a lot of things going on as a company here at Ramsey Solutions. We have so many things that are happening. We've got smart money events that are going on. We also have what's called smart conference going on. And so I want you to be able to check us out. Go to DaveRamsey.com. Look at our events page. We have money events where we walk around and we walk around. We travel around and we teach people about the baby steps. So many people out there want guidance or maybe you've been down the path and you've made a mistake.

Now, I just want to tell you something. If you've made a mistake with money, I want you to raise your hand. Now, if you're driving, keep your hands on the wheel. But you know, and if you've done some crazy stuff or some a mistake with money, I want you to raise your hand. Now, if you're driving, keep your hands on the wheel. But you know, and if you've done some crazy stuff or some stupid stuff with money, it just means you're human. But we have an opportunity to get better. And so you can plug in with us. Dave and I have some events we're going to be doing around the country as well as Anthony O'Neill and I. And we're excited.

We love to see people out there. We love to meet you and to hear about people that are making a change. And so we all have that opportunity. So we've got the events going on October 13th at the Municipal Arena. We'll have an opportunity to teach and guide people on just how do you get smart with your parenting, with your money, in your marriage. I mean, all the way around. You've got a great opportunity to dive in there and to come out and to see us. And we'll all be there. All the Ramsey personalities, Dave, Rachel, Christy, Anthony, Ken, and myself will be there along with Dr. Les Parrott, as well as Meg Meeker.

I mean, it's just it's fantastic. And so we'd love to see you there. But here's something else that we have going on. I have just released my next book. You all know we released Retire Inspired back in 2016, but like a kid on the first day of school, and this is kind of like the second week of school because we launched it last week, but it's out. It's Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. for people to really dive in and to really learn the truth. Because what I have found is that if you hear a lie often enough, loud enough, what happens is we tend to believe it. And so I want to guide people and really give them the truth. Now, here's the deal. Whenever we do new books, we want to involve you as soon as possible.

This book will release in January, but you've got an opportunity to pre-order a copy right now for just 20 bucks i mean 20 is going to get you the book but here's the deal you know us we don't just stop there you're going to for 20 you're going to get the book but you're also going to get the audio book as well as the e-book along with two video lessons where one for me where i'm talking about how to retire inspired but also one from from Dave talking about that it's okay to build wealth. And so this is a great opportunity for a pre-order, and we want to encourage you to do so. You can do that by going to my website, ChrisHogan360.com, or to Dave's website at DaveRamsey.com,

and you can dive in and get that done and know that when the book comes, you will have it coming your way. But it's a it's great. We did not only a study, but we did the largest study that's ever been done on net worth millionaires. And by largest people, I'm talking about the biggest like you'll hear about studies all the time. I read constantly and I hear about that.

They studied 500 people or a thousand or maybe even 2000. And that's cute. Okay. I mean, it is, it's nice. I can, I can respect that, but we went big cause we don't play around here. We studied 10,150 net worth millionaires and we wanted to know what are they doing? What is the truth based on a lot of myths? Because unfortunately we think where you come from dictates where you're going. And we're here to tell you that that's just not the case. So there's an incredible study along with information we found from the study.

But here's what I love about the book, the stories, the stories of these everyday people and what they battled, what they overcame, how they got there, how did they build their net worth? And I love reading these stories and the opportunity to hear them and really, really connect. And so it's a great opportunity. You can get all those stories as well as information on the study because it's all inside the book. So excited to share that with you. I wanted to let you know about that right out of the gate.

Again, you can preorder by going to DaveRamay.com or go to ChrisHogan360.com. All right, we're going to the phones because that's what we do, and we want to hear from you. I'm starting off with Barbara in New York. Barbara, how can I help you? Thanks for taking the call, Chris. Yes. I have a very simple question. Do you treat – I have a deferred principal on my mortgage.

Okay. And I'm on step two, and I'm paying off my other debt. Do I lump in the deferred principle as step two debt or do I categorize that as mortgage? Okay. Now with your deferred principle, the way that it's structured, are they having you pay it annually? No, no, they tacked it on to the end and I have a balloon mortgage, which I will refund. I know, I know. I'm a late bloomer. Oh my. Don't judge me. I'm not judging you. Hey, I'm not, but I'm here to help. But for those listening out there, a balloon, what that means is, is that you pay a set amount, but then there comes a time

where there's a massive amount that's due. How many years do you have left on this balloon? It was a 20 year. I have 18 left. I have $167,000 mortgage to which they attach the $74,000 balloon payment, which will all be due in December of 2036. Okay. All right. So Barbara, here, here's the deal and see these mortgages were designed for people that, uh, essentially would not be in a home a very, very long time. But here's the thing. You know, nobody's going to have a set dollar amount like that just sitting around when the time comes. So they end up causing you to refinance.

Okay? So right now you tell me you're on baby step two. So what debts do you have that you're trying to attack? I'm very fortunate. I am 57 years old, and I don't have any credit card debt. Paid them off. Okay. So I have zero balances on my credit cards.

I did not cut them up yet. I don't know. I can't find my scissors. But anyway, I only have a HELOC of $10,000, but it has a lot of interest. I had a little medical setback in my family, and I didn't pay it, so now it's accrued almost $4,000 in interest. So it's like $14,000 for that and a personal loan of $2,000. Okay.

All right. So in looking at this, so essentially you have two debts. You have a personal loan for $2,000, then we have this HELOC, which is a home equity line of credit, which is a mortgage on your home. Okay? And so what that means is it's a revolving, it's like a big credit card that's attached, all right, to your house. So, Barbara, I want you to hang tight because you've got a few things going on that we need to talk about, and we're going to deal with it as soon as we come back. All right?

Thank you. All right? So hang tight. All right, everybody. She's got a lot of stuff going on. What am I going to do with Barbara? She tells me she can't find her scissors. I think she's lying to me.

We're going to deal with it when I come back. This is The Dave Ramsey Show. Can you believe this real estate market? Home shopping has become so competitive. There's a ton of new buyers in the market, and bidding wars are the new normal. Folks are under a lot of pressure to offer more money to get into that house. Don't do that. Get certified instead. The Churchill Mortgage Certified Home Buyer Program is a game changer.

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NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Hello America, you are listening to the Dave Ramsey Show. I'm Chris Hogan, filling in for Dave. And we want your calls. Prior to taking the break, we had Barbara on the phone. And Barbara was telling me about a situation that she has with her mortgage.

She's in a balloon mortgage. Barbara's also attacking her debt. She's on baby step number two. And so she's got a personal loan of $2,000. And then she has a HELOC, a home equity's got a personal loan of $2,000. And then she has a HELOC, a home equity line of credit that's $14,000. Now, Barbara, the personal loan, was that used for debt or for health related issues or something else? That was used to fund a party for my daughter graduating college. Okay. You didn't use any of the other credit cards?

Yes. See, all right, Barbara, let's attack these things one at a time. Okay. Those credit cards, I want you, you've paid them off. They have a zero balance right now, correct? Yes. Okay. I want you to cut those things up.

All right. Now, it's not just cutting them up. I want you to call them and shut them down. See, the problem is that psychologically when we have them, we end up using them. And so what I want you to do, I can hear in your voice, you're ready to make some changes financially. And see, the best way to do that is we've got to remove this false sense of security they're giving you. And so with those, I just want you to get them out. Now, if you said you can't find scissors, I'm going to be up there next week doing media. Now, you know, they're not going to let me fly with scissors. So I'm going to pack them in my suitcase with my hair care products and I'm coming. All right. Because I'm going to tell you something, you get those things cut up and you get them closed down. Now, what you're going to do is start to breathe. Like what is your household income right now? Um, monthly 3241,41 $52.41

so looking at this I promise you with that $2,000 personal loan that thing can be out of your life in here in a matter of months right? and so we get that thing paid off these people are still going to mail you some things they're going to want you to come back you know why? you're making them money

but we're going to think different you're going to start to do things with cash and we're not going to fall for it anymore so here's what I want you to come back. You know why? You're making them money. But we're going to think different. You're going to start to do things with cash and we're not going to fall for it anymore. So here's what I want you to do. The balloon mortgage you're dealing with, yes, we do have to get to that issue and we have to deal with it. But right now, I want you to attack this little $2,000 personal loan and then I want you to get focused right on attacking the HELOC, the home equity line of credit. that would be next in your list. And then once you get that done, I want you to build up an emergency fund, and then you can start to walk through and look at trying to really figure out the direction to go on dealing with this mortgage.

You see, balloon mortgages are a little nuance out there in the banking industry people aren't aware of. But what happens is a large chunk of it becomes due at a certain period of time. Barbara, you have some time before you're going to have to walk through that. But I want you to get focused and we start thinking different. And when we think different, we can start to do some things differently. Barbara, I believe in you. We're actually going to send you to Financial Peace University. Now, this is a nine week program that really allows people to start to understand how money works. You see, the problem is, is that nobody teaches us this stuff. Actually, we do, because we're teaching young people with foundations right now. This is a high school

curriculum, and we're also doing it in middle schools to help young people really understand how this money stuff works. You see, the problem is, is that most of us were never taught about this. And so you're trying to find your way around in the dark, looking for a light switch. And the problem is, is that all these little traps out there that are messing with you, that are designed to trip you up, credit cards, car payments, all these things are sitting out there. And the more informed we get, the better we can start to make some decisions for ourselves. So, America, that's what we're doing. If you've got a question, call us, 888-825-5225. Again, that's 888-825-5225. Next up, we're going to Idaho. I've got Rich on the line. Rich, how are you? I'm doing great, Chris. I appreciate your time today.

Yes, sir. How can I help you? I am 49 years old, and I have about $49,000 or so in a traditional TSP from my days in the military. Yes, sir. So it went in pre-tax. Okay. So my question is, do I eat the penalty and the interest now and move it to a Roth, or because of my age, I just let it ride and then pay the taxes when I take it out. Okay.

Rich, how old are you again? 49. 49 years old. And what branch did you serve in? I was in the Air Force. For how long? 26 years. 26 years.

Buddy, thank you for your service. My pleasure. I had an opportunity here recently to go out with the Department of Defense and visit multiple bases, military bases for the Army, the Air Force, the Marines, as well as with Homeland Security and the Coast Guard. And amazing men and women are out there protecting and serving our country. So thank you. But with the time that you've spent in, the TSP, all that is is a thrift savings program. It's like a 401k for federal employees. You asked, do you pull it out and take the hit, or do you try to convert it?

I would not. I would say this. I would leave that money there and allow it to just continue to grow, review how it's invested. So you're making sure you're plugging it in the right way. But then, you know, the opportunity for you to invest right now with a Roth is something you can do outside of your TSP. So leave that there and really, really get focused with a Roth. Remember, you can do up to 5,500 a year. And if you're over the age of 50, it's an extra thousand that,000 that you can do, which puts you to $6,500. So it's a great opportunity.

No reason to surrender or give up that money by taking the hit. Let it sit still and stay focused, and then you can move forward and continue to really get in tune with your money and get to where you're trying to go, my friend. So, Rich, again, thank you for your call, and again, thank you for your service. Next up, I've got Jennifer in Rochester. Jennifer, how are you? I'm great. How are you?

I am focused and not finished, young lady. How are you today? I'm wonderful. Thank you for taking my call, Chris. Yes. I have a quick question. Okay. So my husband and I are in baby step three.

We're currently one month into our three to six months of emergency savings. Good. And we're going to start saving for a house after that. that. So our retirement has already been on hold for one year. My husband has about $25,000 in his 401k, and I have a New York State pension, which I'm currently not contributing to. We're wondering how much longer after the six months we should save for a down payment on a house. I'm nervous about not saving more for retirement since we've already put it on hold for a year. And the other piece of my question is that the housing market in here, the prices of the houses have inflated, and we're also afraid to put 20% down on a house that might be worth more than what it is. So can you give us some

direction, please? Yes, yes. You can tell you've had this thing kicking around a little while in your head. Yes, we have. So you're ready had this thing kicking around a little while in your head. Yes, we have. Yeah. So you're ready to save for a house. How does your husband feel? He's ready to save for a house as well. We're on the same page. We both took Financial Peace University. Okay, good. How much debt did you guys pay off? We paid off $19,000 in one year. Oh, what was that? Was that credit card debt or a car loan? It was credit card debt and some residual debt my husband had prior to our marriage. Okay. And so you all sacrificed to attack that, didn't you?

We certainly did. Okay. All right. And see, that's the thing. When you sacrifice to make some progress, you get more focused and intentional. I'm excited you guys are already a month in to saving up your three to six months of expenses because we want to have that cushion between you and life happening. That's right.

Right. But now here's the deal. I don't want you to allow the market to dictate when you buy a home. You make that make sense. Yeah. Because see these commercials out there and this stuff you hear and you go, oh my gosh, if we don't move now, we're not going to have an opportunity to get anything. And then we start to feel like we're going to miss out.

And I want you all to do what you did when you started almost a year and a half ago. You took a stand for your financial self and your futures by getting out of debt. Now I want you to complete the mission. I want you to stay focused, build up your emergency fund, and then you guys start to talk about a time frame that you want to save for a home. It's okay for you to open up a money market account and put that home down payment there. That would be baby step 3B. So you get three to six months of expenses first, then you start to save for a down payment on a home. Now, having the money there doesn't mean that you have to do it immediately. You all are

in control. And so we have to take a deep breath. We allow ourselves to get to these certain stages and feel like we need to do this next thing because that's what grownups do or our parents think we should do or our friends think we should do. And no, I want you to start to make your own decisions. What's the timing for you? What makes sense? You see, you get to live your life. You have to make those decisions. So stay in control. Take a deep breath and get focused. When you guys decide on this window of buying a home, I want you to find the right home. But get plugged in. Get an ELP on your side.

Find somebody that can guide you and to help you make the right decision. Remember, it's about money, but it's also about timing. This is The Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way.

Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. Hello America, you are listening to the Dave Ramsey Show. I am Chris Hogan filling in for Dave, but we want to hear from you. If you've got a question or you need some guidance, give us a call. The number to call is 888-825-5225.

Again, that's 888-825-5225. Now, listen, I also told you guys about, again, my new book, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. But here's something special we're doing. You can actually start reading my brand new book for free by going to DaveRamsey.com. Now, here's what you'll do. You'll enter your email address, and then we're going to send you a free preview of the book. I had to push and battle for this because I'm excited for you all to get this information in your hands. So again, just go to DaveRamsey.com, put in your email address, and we're going to send you a preview of Everyday Millionaires. And so very excited for this. It's an easy step. And then once you start reading, I want you to make sure you let us know what you

think. But here's the thing. One of the things we found when we studied over 10,000 millionaires is that we found something crazy. You know what we found out? Millionaires do what we teach in Financial Peace University. Now, Financial Peace University, this is Dave's number one program. This is a nine-week course that truly helps people understand how money works. And it walks through the baby steps. Now, I know you all have heard us say the phrase baby steps for many, many years, and a lot of people don't understand. The best way

to make progress happen is to take a step forward. And that means you start to learn some things you didn't know. You start doing some things, you know, you need to do and you get started. And what you're going to find is that there are everybody else out there is has that same kind of desire, whether it's questions about budgeting, dealing with debt, insurance, all of these things are contained in this course. And so, again, we found out millionaires do some stuff. They get out of debt. They live on less than they make. They're disciplined and they're responsible.

There are also people that are chasing down progress. And that's what you can do in Financial Peace University. So here's what you can do. You can get Financial Peace University today for 20% off. That's right. I'm slashing prices. You can get it on sale for $119. An opportunity to truly change your financial focus and to get started. Again, I'm telling you, it's easier than you think. We just have to move forward. We work too hard to make money. Now what we want to do is show you how to make your money work for you. So it's a great opportunity. You can also, we have a new bundle that's exclusive as well. This includes Dave Ramsey's number one program, Financial Peace University, as well as my copy of Everyday Millionaires. And you can get both of those, or you can do them individually, but you can do both for $129 and you're going to

get the free bonus items as well. So for $129, you're going to get Financial Peace University. You're going to get a copy of my book when it comes out in January, but you're going to get the ebook, the audio book, as well as the two video lessons from Dave and I. So it's a great opportunity to take a stand for yourself. You, your family, your grandkids, you have an opportunity to make some changes. So I'm going to get back to the phone. I've got Nate on in Wisconsin. Nate, how can I help you? Hey, Chris, thanks for taking my call.

Yes, sir. I'm glad to talk with you. Now, it's not snowing out there, is it? No, it's beautiful. It's actually 90 degrees today, believe it or not. 90 degrees in Wisconsin. That's almost like a unicorn. Yes. That's rare like a unicorn. Yes.

That's rare. How can I help you today? Yes, I've been very fortunate. My wife and I just finished Baby Step 2. We're working through Baby Step 3 right now, and we're really excited about our progress. The question I have for you specifically is my mom has recently opened up kind of a few of her financial situations that

she has, and she hasn't been very smart with money. And she's probably, I think she would like to retire in the next 10 to 15 years. But seeing the amount of debt she has and the unwillingness to change, I'm afraid that at some point point she may not be able to work. And I realized that that's are not my responsibility. However, my mom has taken care of my grandmother for a good portion of her life. And I'm afraid that she's then going to come to my wife and I and my family and say, come and help me. I'm just like, I helped your grandmother.

Um, so, so I'm, I'm wondering, you know, should we be saving? I guess is the first question for that hypothetical. And two, if I am supposed to be saving, where should I save? Ah, okay. Nate, you said you all already attacked debt. How much debt did you and your wife pay off? We paid off about $75,000. My goodness, $75,000.

What was that? Student loans. There was a small car bill. And then there was probably $1,200 on credit cards. But the majority of it was student loans. Wow. Now, what caused you all to get focused to be able to attack that debt? Actually, at our wedding, I mean, we started attacking debt at a process. You know,

it's very similar, but not to the gazelle intensity that this program teaches. We started doing this once we got engaged. But once we got married, my cousin actually gave us the Total Money Makeover book for a wedding gift. And that really struck a nerve with my wife, and it took me a little while to read because I don't love to read. But once I read it, we were hooked, and we were ready to get the deck on. Okay. And see, what I like is that you guys just didn't read the book. You got focused, and you started doing some stuff.

And I'm proud of you, you know, paying off $75,000. That's a big step. Now, so you all are moving down the path. You've attacked that. Have you built up your emergency fund yet? We're on our way. Okay, okay, good. Yep.

Okay, good. So I love the intensity. And again, I want you to stay focused. But now shifting gears and talking about your mom, do you have other siblings as well, Nate, or are you an only child? I have one other sibling, and part of some of the things that have happened here is my mom has been out of marriages in and out twice now. So she doesn't really have a companion to help her through this. Okay, and how much debt does your mother have that you're aware of? It's that I'm aware of at least $30,000. And then she tells me she doesn't tell me the amount, which also slightly concerns me.

But she says she has three loans against her 401k. Okay. All right. All right. So you're correct. Your mom has definitely made some decisions about money that can really delay her being able to retire. You know, the big thing is going to be for you and your wife, Nate, to keep working together, to get focused and you all to continue to chase down the baby steps. Now, I know again. Now, do I think you

need to set up a separate fund to get ready to help your mother? No, I think you have an opportunity. Matter of fact, I'm going to do what someone did for you as a wedding gift. I'm going to send a copy of Total Money Makeover, Dave's number one selling book, but I'm also going to send my book Retire Inspired. You see, your mom is going to have to make some decisions for herself. As an adult, you can't parent your mom. What you can do, though, is love her and guide her and share with her information. But the better off you put you and your family, the more able you'll be able to do some kind of help. But that's not your responsibility.

But hopefully, again, as she's talking with you and having these conversations and shedding light about her debt situation, hopefully she'll start to look and understand, you know, does she want to be part of the solution or does she want to be part of the problem? Now, the three loans against her 401k, that really concerns me because if she were to leave or lose that job, those debts become due and payable much sooner than she anticipated within three to six months. And so that's a scenario that she needs to be aware of. And again, this is money that's coming straight out of her check.

So we're going to send you that information. Talk with her. If she wants to sit down with a financial coach, she can go to DaveRamsey.com, click on financial coaching, and to really be able to get connected with someone that can work with your mom. We coach people over phone calls as well as there's someone in your area, I know for a fact, that could sit down with her as well. But the key is going to be, Nate, it's when she's ready. You see, that's the thing. You can't make anybody change. But what you could do is have those conversations with her. Get her to open up about her dreams.

What were the things that she wanted to do when she was younger? What were the ideas that she had? And talking about those dreams can help people start to open up a little bit. You see, she may think she's in too deep of a hole to make changes, and that's just not true. You paid off $75,000. Tell her that story. Shine the light on it. You can help her, and you can inspire her as well. This is The Dave Ramsey Show. Hello, America.

You are listening to The Dave Ramsey Show. I am Chris Hogan filling in for Dave, but we definitely want to hear from you. This show is all about you and for you. So if you've got a question, give us a call at 888-825-5225. Again, that is 888-825-5225. All right, I'm going to the phone because I've got Amber on the line in Champaign, Illinois. Amber, how can I help you today? Hi, Chris. Thank you and producer for taking my call.

Yes. And my question is, well, first I just want to say I want to make sure that my husband and I are on the right track. This week we will be legally homeless. And so I'm trying to figure out, should our next move be to buy or to rent? Because we were currently homeowners. We closed this week, and someone bought our house

with cash, so we weren't expecting to have to move out that fast. We want to get... We sold it for $110. We are on baby step number two, and we're working on paying our debt off, which is the reason we sold our house, because it was like 24.9% of our income. And so we're like trying to get a very, very cheaper mortgage,

and we have found one. And we're like, well, Dave says, you know, you need to rent until you can buy 100% down. Or, you know, from the proceeds of our house, we will have 20% down on a $62,000 mortgage. Okay. So let me get this right, Amber. You all sold your

home because you couldn't afford it or you made decisions to kind of downsize? We took STU and decided to downsize is our best option. Okay. All right. See, I like that. So that's you all taking back control, right, of where you are, right?

And now what's happened is you're feeling that urge to do this adult thing and that's buy another house. Okay? And so what I want you all to do is let's take some time here and breathe. OK, let's take some time here to breathe. I know the home sold faster than you were thinking. But here's the thing. Taking the time to be able to breathe and reset. It's OK to go rent.

I don't know why something in society we feel like we're like we're doing something illegal because we rent. No, renting allows us to be able to regroup and be able to save up enough money to do it the right way. So you and your husband sit down together. You all have already committed to being focused and saying, you know what? We probably bought too much home that we could afford to begin with. Let's breathe. I want you to keep breathing. And what I mean by that is attacking the debt, getting yourself focused, and then start to reset some boundaries for yourself, right? And so I want you to get yourself out of debt. I want you to build up the emergency fund.

And then I want you guys to start to think about, hey, if we do buy another home, where are we going to buy? How much are we looking to spend? And then you start to save up that down payment. And so that's how you do that, Amber. I want you all to stay on the same page and just take your time. Don't let society or anybody else push you into doing something. I want you to do it when you have the money, but regroup and reset, and then you all can start to continue down this path. Hope that helps you, Nat. Next up, I got Natalie in Nashville. Natalie, how can I help you? Yes, I am a single mother of four, and I lost my, I had a vehicle that tore up on me completely, and it wasn't fixable or anything, so I went without a car for a long time, but having

four kiddos, I needed a vehicle, so I went and got a vehicle that cost me $350 a month because I have poor credit from my marriage and stuff. That's okay. Where am I trying to get at? I'm sorry. But I really can't afford it because I don't make a whole lot of money, and I'm just wondering what I need to do because my credit isn't that great. And so I'm trying to get out from under this car because I make probably about $10 an hour, and it's not helping anything. Okay.

It's actually making it worse. Right, right. So how long ago did you get this car loan? About a year ago. Okay. So you've been in the car a year. What is your annual income right now? I know that it's less than $20,000 a year.

Okay, all right. And you got this car. How much did you finance when you signed on for the loan for this car? Well, they told me that it would be about $16,000. And at the time, I was all for it because I needed a car. And now that I'm struggling with it, I'm like, oh, that was a bad choice. Right. What kind of car did you end up getting?

I got a 2009 Hyundai Elantra. Okay. All right. And I had went. Sorry, go ahead. No, you said it was $16,000. Is that how much you ended up going into debt for? Pretty much, yeah, because I gave them $1,000 down,

but somebody told me that that doesn't even go towards it. So they said it just goes to the car company. Okay. So that didn't help me out at all. What's the interest rate they gave you on this vehicle? I'm not for sure, to be honest. Okay. All right, so a couple of things we need to do here.

Definitely need to get the details and find out what the payoff is on this home. Just ask them for a 30 day payoff. That just means if you were to pay it off in 30 days, this is the amount that's owed. Okay. To be able to get out from under it. So you're paying 350 a month. You got four kids. How old are you kiddos? I have a nine year old, a seven year old-year-old, a four-year-old, and a brand-new baby. My goodness. And so you went without a vehicle for how long? Almost a year. Wow. How'd you get around? My soon-to-be ex-in-laws, but they're wonderful people, they helped me out.

Okay. All right. And so when you did this loan, you're telling me your credit was bad. Who else co-signed for you on this loan? Nobody co-signed for me. I went to a friend that worked at Hyundai, and he tried to help me out as most as he could, or that's what he said. And my credit isn't, I guess it's not super bad, but it's not good enough to get a car at a reasonable price.

Right. Is this friend still working there? No, he is not. Okay. So that friend is of no use to you right now. No. Right. So I want you to call Natalie and get a payoff on this car, a 30-day payoff.

You're going to look at it. It's a 2009. You can also go to kellybluebook.com to find out what it's worth, to see if you can sell it. But it sounds like with this, this is one of those scenarios, right, where the fix is really going to be to dig in and to get situated to be able to attack and pay this thing off. You're not going to be able to take it back after a year. That's not going to happen. If you were 30 days out or something, we could have the

conversation, but you've had this for a year. So now it's going to be a matter of how do we get your income up, right? How do we begin to really kind of grow and figure out how to bring in more revenue? Because with your kids, you do need to be able to get around. I would have preferred you saved up and bought a car with cash. But hindsight's always 20-20. So now it's a matter of figuring out what's the fix. I think the income is the thing that you can control. If you've got family around to be able to look and really start to think differently.

And when we're thinking about ways to make money, we naturally automatically go to things we can't do. Right? I'm not talking about can't dos. I want us to brainstorm and think about things we can't do right i'm not talking about can't do's i want us to brainstorm and think about things that you can do what are some ways you can bring in some extra money you said you're making around 20 000 a year i think you can do more i hear it in you you're motivated you've got four kids counting on you and so what we have to do is begin to make some of the decisions begin to go down this path and make some changes.

It's real quick to sign on the dotted line for a loan. It takes a little bit longer to attack and pay it off. But in that process is where we can learn some things. We can start to look at things a little bit different and we can get a little bit more focused. All right, I'm going back to the phones. I've got Rhonda on the line in Tyler, Texas. Rhonda, how can I help you? Yes, thank you for taking my call. I just had a question. My husband and I were debt-free for 10 years, including our home. And then the way that we got that way, we would build a house and sell it, make such a profit that we were able to stay that way for 10 years.

The last house we built, we went way over budget, and we had to end up borrowing money. We ended up selling that house. So now we're renting. We have $300,000 in the bank and my husband has an inerity plus he works and he brings home about $6,000 a month. And we're wondering the house that we are looking at, we would have to go into debt again for about $45,000, and we just hate to do that. So we're wondering, is that okay to do, or would we be better off just rent until we can find something where we wouldn't have to?

Okay. Well, Rhonda, you all are addicted to real estate, okay? I'm going to tell you. If you have never known, I'm just telling you right now. So, no, you don't need to go backwards. You don't need to go into debt for $45, know what you do you save it up like if you get such if you get serious making six grand a month then cut some things back keep renting save up let that money keep growing right that's what you do when you're focused we don't take the easy way

out we get focused and we work hard. All right. I want to thank James Child, the producer and associate producer, Kelly Daniel, and you America for all your calls. This is the Dave Ramsey show. This is Blake Thompson, chief production officer for the Dave Ramsey show. This hour's up, but you'll find more on our YouTube channel where we have over 6 million YouTube views each month. You can find debt-free screams, millionaire hour clips, Dave rants, and so much more. Go check it out.