The Ramsey Show - App - I Use Spending to Cope With My Bipolar Disorder (Hour 3)

Episode Date: August 20, 2020

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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, Dr. John Deloney. Ramsey Personality is my co-host on the air today. Open phones at 888-825-5225. That's 888-825-5225. Shelby is in Dallas, Texas.

Hi, Shelby. Welcome to the show. How can we help? Hi, Dave. Hey, ReconTech, Dr. John. That's what I'm talking about. I like it, Shelby. Welcome to the show. How can we help? Hi, Dave. Hey, Reckon Tech, Dr. John. That's what I'm talking about. I like it, Shelby. Yeah, it guns up.

All right. So my husband and I, we're on baby steps four, five, and six, and we're considering immediately paying off our mortgage. Good. have 140,000 remaining on the balance, and we would be pulling the money from roughly 280,000 of non-retirement investments. Why haven't you done it already? Well, okay. I guess our thing was we think that we would make more money on the investments and compound interest than what we would save more money on the investments and compound interest than what

we would save by paying off the mortgage. But, you know, so in addition, my husband's job just announced layoffs last week. So that makes things really fun and exciting. So my head says to keep the investments, but my heart says to pay it off. Okay. Well, you are accurately describing that because what you're leaving out of your formula is risk. And your head does math, and your heart is where risk is measured. Right. And so when you measure risk, you will find that you will actually make more money as a result of having a paid-for house for multiple reasons.

The sense of peace, the sense of well-being causes you to make different decisions with your money in other areas and with your career. Because you don't have to put up with crap if you have a paid-for house, and you have a tendency to prosper in your career field as a result and see that's not measurable in your formula that you used where you thought you would make more on compound interest if you made more on compound interest then you should borrow two million dollars on your house and invest it on the stock market but when i say that that takes your breath away a little bit because that makes you realize there's risk that makes sense yeah yes last last point is this couple other points right quick and there's two other one is when we did the study for chris's book everyday millionaires one of the key data points we found was that not all

of them but the typical millionaire paid off their home was one of the key components of their first one to five million dollars in net worth was a paid for home we almost never i won't say never but almost never found a millionaire with a mortgage and if we did they were in the process of getting it paid off very quickly we might out of 10 000 i can't say we didn't but it might have been two or something who said they built wealth by using borrowing on their home to become wealthy that is not something we ever hear among millionaires they don't say oh i borrowed money and invested it and made the spread by investing in mutual funds and that made me a millionaire never said anyone okay and the last point is this pay off your house and if you really hate being debt-free you can go get your mortgage very true all right we'll pay it off today then have at it thanks

how cool is that that's a that's a that phone call was worth it's worth its roi man she already knew what she was gonna do do. I know she did. It was that old Taylor Dayne song. Listen to your heart. I love it, man. Is that not Taylor Dayne? No. All right.

Whoever it was. Roxette. Roxette. All right. Oh, we're getting help out of the booth here with our karaoke. Great. All right. We need to move along fast.

Mavis is in Portland, Oregon. Hey, Mavis. What's up? Oh, hi, Dave. Such an honor to talk to you. You too. How can we help? Yes, I have one simple question.

We recently purchased term life insurance through vendors, but a friend of mine, she's in the insurance business now, and she highly recommends to get a uh you know a whole life insurance versus term life i know you don't never recommend whole life but wait a minute wait a minute a whole life life insurance agent said you should get whole life i'm shocked well no she just she worked for a different insurance company i told her i said you know i just got um term life with you know vendors through dave and then she's like you know i thought let me tell you all this good thing about whole life it just sounded so

good um drug dealers want you to use drugs too they do yeah and a lot of them are users too they make them sound so good yeah so good yes yeah so okay what can i what can i you obviously know we stand the whole life insurance sucks now how can we help you you're not going to convince your friend because she sells it right i i guess my question is why don't you recommend like what's the that's a the downside for a whole life? That's a good question. That's an excellent question. Okay. Whole life life insurance is somewhere in the neighborhood of 20 times more expensive for the same amount of coverage. So, in other words, if we take a $100,000 policy or a $250,000 policy and it was $5 a month for term, it would be $100 a month for

whole life. Okay? Okay. So now we have established statistically, based on your age, with the probability of your death at your age, what it costs to cover your life should you die. We know $5 will do that, so why do they charge a hundred well the other 95 dollars goes into a savings program inside the policy called cash value she probably mentioned that to you it builds up cash value and they say it builds up equity like owning a house where term

is renting well it's not at all that's mixed metaphor, and it's absolutely a lie. Okay, so here's what happens. You got an extra $95 you're being charged. That's going into the inside of the policy with cash value. Now, here's how cash value works. Get any whole life policy out and look at it. The first three years, your cash value build up is zero okay so what happened to your 95 it went to a month by the way not a year what did your 95 go to it went to

commissions and extra profits for them after three years it accrues nationally at an average of 1.2 percent then when you finally get past those three years and you finally get past the idea that the rate of return sucks and it finally builds up some money now your 250 000 policy has a 20 000 cash value in it you have a savings program inside there you die the insurance company pays the face value of 250 000 what happened to your 20 000 you paid extra for they keep it so you have a savings program at a bank the first three years they keep all your money after that they pay you one percent and when you die, they keep your money. That's whole life life insurance.

That sucks. It is the payday lender of the middle class. That's how all the towers in the skylines of every city are life insurance companies and banks. They didn't make that money themselves. Santa Claus didn't build those. You built them, America. This is the Dave Ramsey Show. Folks, I love telling you about well-made, well-thought-out products. Today, I'm talking

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And that means if you no longer like or fit the style of your belt, you can replace them for free. Plus, I like the way these guys do business. Grip 6 is determined to help build and modernize American manufacturing. To learn more and get this month's Dave Ramsey special, visit Grip6.com. That's Grip6.com. when people avoid hard stuff like uh making a will it actually causes more anxiety you got to deal with the important stuff like making a will head on and um if you don't you're going to have a problem because you know you're not going to live don't you're going to have a problem because you know you're

not going to live forever you're not going to have a problem you're actually going to leave problems behind is what's going to happen so think what would happen if you died without a will your family would be in and out of probate court paying big legal fees the state will decide what happens to your kids you don't decide uh you a will. Making a will also lets you be generous beyond your family. More and more of our listeners are creating their wills and giving like no one else from 10 to 20 million dollars a month in estate gifts are going to churches and charities and ministries in their wills just from listening to the show. It's pretty cool. So we've made planning and giving both super easy and super simple. Start with the free will preparation checklist.

It covers the seven most important things you need to think about, plus all the stuff most people forget. Get the checklist. It's free. Text WILL to 33789. Text WILL to 33789. Text WILL to 33789. Dr. John Deloney is answering your questions today. If you don't get through today to talk to him, you can email John at askjohn at ramsaysolutions.com.

Askjohn at ramsSolutions.com. Ask John at RamseySolutions.com. And also be sure and check out his latest videos on YouTube, Divorce, Coronavirus, and the Titanic. That sounds like I don't even know. I haven't seen it. I have a sinking feeling. It has. Ooh, well played. Hasn't been nominated for an Oscar yet, but I'm just waiting for the call.

Okay. We're sitting by the phone.. Hasn't been nominated for an Oscar yet, but I'm just waiting for the call. Okay. We're sitting by the phone. Do what? I said, who's Oscar? He's also, his latest article is blowing up. I have read this. It's absolutely incredible on DaveRamsey.com, how to deal with anxiety. All right, let's go to Jeff in Panama City.

Hey, Jeff, welcome to the Dave Ramsey Show. How can we help? Thanks for taking my call, guys. Sure. What's up? I had the last two years have been pretty a whirlwind for me, and from it, me and my wife have gathered up about $25,000 in credit card debt, and I was wondering, is it ever a good idea to take out a loan on a 401k just to

pay it off nope two reasons one uh you unplug a good investment and pay yourself a lousy interest rate and so instead of making 10 to 15 on some good mutual funds, you're paying yourself back five or six. Reason number two is when you leave your company, and you will leave your company, when you die, when you get a better job, or when they fire you, lay you off, whatever, you will leave your company. When you leave your company, a 401k loan is considered due in full within 60 days. If you do not pay it in full within 60 days, you get penalized and charged taxes, a 10% penalty plus your tax rate. And it's the last time you need a loan coming due suddenly when you're leaving a company.

And so it's a nightmare. It sounds like it's a good idea on the surface when you just go, oh, instead of 18% on the credit card, I'm getting this. And I'm paying myself interest anyway instead of paying them interest. And that's how people think about it. And they get themselves really into some serious pinch. What's your income, Jeff? On an average year, I make about $65,000 to $70,000. Is that your household income or just you? That's just me. On an average year, I make about $65,000 to $70,000. Okay.

Is that your household income or just you? That's just me. My wife makes another $18,000 to $20,000. Okay. So you're like a $90,000 household income, and you have $23,000 in credit card debt. $25,000. $25,000, yeah. $25,000.

What other debt do you have, not counting your house? I have my cars. I think I owe $15,000 left on that. Okay. All right. So $40,000 makes you debt-free, and you make $90,000 a year? Correct. Okay.

So what if we said $20,000 a year for two years? That'd be kind of like, yeah, not really pushing hard on the gas at all i mean instead of making nine instead of you know living on 90 you live on 70 and you're debt-free in two years so i think you ought to do it faster oh should i lower my 401k contribution gotta stop them gotta stop them because i'm putting in 25% right now. Doesn't matter. Stop it. All right. And just temporarily, because for the next year and a half, I want you doing nothing but paying these debts off,

listing them smallest to largest, and attacking them in that order. And you're not allowed to have a life during that year and a half, because all you're doing is getting out of debt. You've got to clean up this mess you made. No vacations, no eating out. You are going to be on beans and rice rice and beans put the cat on craigslist the dog on ebay yeah we've been doing that since the day he was born anyway all right well it's time to get somewhere with it time to get a little traction hey i'll

tell you what hang on i'll have kelly pick up we'll put you in ramsey plus which puts you into financial peace university hooks you up with the every dollar budgeting app all the uh ask a coach apps are in there everything's in there to help you and uh we'll put you in there for a year as our gift you had a bad year last year i want to help you have a good year in the coming 12 hang on we'll take care of you brother but you got to do this stuff okay you got to do it. Preston, or I'm sorry, Keisha is with us in Richmond, Virginia. Hi, Keisha. How are you? I am well.

How are you? Good. How can we help? Well, this is kind of up Dr. John's alley, but I have bipolar disorder, among some other things. And through the years, I've made a lot of bad decisions and mistakes when it comes to money. Um, probably about five or six years ago, I had a really bad episode and, um, I got myself into a lot of debt. Um, and I'm still digging out of it. And basically, I know the things I should be doing, I need to be doing to get out of the debt.

I still have problems with my bipolar where I get impulsive. So that makes it hard sometimes. Are you taking your medication? I'm not on anything at the moment. I'm kind of coming off of something to try something new. Okay, but you're working with a psychiatrist right now? Yeah, I have to find a new one because my insurance just said they're not going to cover anymore. So you've got a bipolar 1 diagnosis and they're saying they're not going to cover it anymore?

They're not going to cover the people I was seeing. Okay. So I have to find somebody new. So that's number one. Number two, do you have somebody in your life that helps you be accountable? My boyfriend helps and my mother. But I am single. I live alone.

So I'm asking you, like a boyfriend and a mom, those are often not great. They're good cheerleaders and they're good enablers. They're not great accountability partners. Do you have somebody that you could trust that would hold your debit card for you and just let you have cash? Here's what I'm getting at. You've got to set up some boundaries in your life, some barriers that make it very challenging for you when you get in a manic state to do something that you're going to have to live with for two, three, five, six, seven years. That's what I'm getting at. What I'm wanting to know what I need to do.

So you need to find somebody, probably not a boyfriend. Are you in a good church? Yeah. Not at the moment. Okay. Yeah, you've got to find whether it's a good church and a pastor, whether it is a bipolar group in your community that's got somebody that y'all can meet with regularly. Maybe it is your mom. But somebody in your life that you can sit down and say, I've got these. I lean this way when I'm in a manic state, and I lean this way when I'm in a super low state,

and I need to set up some guardrails for myself. But all this starts, quite honestly, Keisha, you've got to take your medication. And folks with bipolar I are notorious for getting in there and feeling better, feeling a little bit leveled out, and then they quit and they think everything's all good, and then they stop, right, and they go right back to where they were. So that's my big recommendation to you is get with a psychiatrist,ap someone that you trust not that's just going to dope you up and

say all right go on just on your way who's going to talk to you learn about you and then you're going to have to get some accountability in your community that's going to help you when you're about to get off the rails keisha your finances will heal only to the extent you do that's right this is the d Ramsey Personality, is my co-host today here on the Dave Ramsey Show. Open phones at 888-825-5225. Preston is in Dallas, Texas. Hi, Preston. How are you?

Hey, Dave. Hey, Dr. D. How's it going? Great. How can we help? So I just want to thank you first for your teachings. Me and my wife got on board a couple years ago. We'd done some stupid, had some cars, a couple new cars, plowed through those, got them paid off, and we just moved on.

We bought a house. We're on to four, five, and six. Got our 20% down. Everything's saved. So I just wanted to say thank you for everything you're doing for everybody. Way to go, dude. Proud of you. Thanks.

And so today is more of a career question I had. So I guess short and to the point, I kind of have a feeling that I'm undercompensated at work and was kind of curious, one, if it was really wise to ask for a raise during these, especially during these hard coronavirus times. Is your company struggling? So we have back in, it's a larger company large um publicly traded company but back in march or so we did have some furloughs and let some um we were kind of in a service industry so we did let some drivers and things go due to um you know profitability and revenues but but we have begun actually bringing some of those back and hiring them.

What gives you the feeling you're undercompensated? I've been there for a couple years now, and I've taken on a sales role with them, taken on quite a bit more responsibility, brought on new accounts, and I've been hitting pretty much all my goals except for this last quarter. No excuses, but with the coronavirus, I was off a little bit there. But for the most part, I feel like I've been doing a good job. I just haven't seen any compensation increase in the last couple years. That's a different question that Dave asked you.

He asked you, how do you know you're undercompensated? Which to me, Dave, you can tell me if I'm wrong, is what are people in your area doing the same level of work you're doing at the same competency you are? What are they making versus I shook hands with the company and said, I'm going to come to work you for this. I'm going to put in my all. I'm going to be excellent at it. And you're doing all those things, and they're doing what they said they were going to do. Paying you. They're paying you what they said they were going to.

Yeah, yeah yeah definitely i would say just in some research and things i believe that people in my area in the same same position that i am in are probably 10 to 15 percent higher and a little bit more about the role i kind of came in as in more of an inside sales role and that's kind of involved over the last couple years so it's it's more outside of a different role. Here's the way you answer the question, how do I ask for a raise? If you switch places with your leader who's going to make the compensation decision, what would you want a young go-getter like Preston to do if he wanted a raise? Why would you give Preston a raise?

I'll give you a hint. You wouldn't give him a raise because he breathes air in and out. No, not at all. Or he thinks he's been working hard for a few years and he should probably just get some more. No, not at all either. I'd say definitely around those goals. I think you want to make your boss look good. So hitting your goals, revenue goals, making the company, you know,

more money is probably one factor in it. And then two other things, what you guys were just saying, right? What can I replace you for? There's someone else out there that is, you know, the same or, you know, what does it cost to fill your role basically or your position and what you're getting paid for. Two examples that happened to me personally as a leader here. Example number one is a guy walks into my office and says, hey, I pulled up a bunch of comp issues off of Google and off of Monster,

and I might be wrong, but here's what I found. I found this and this and this and this, and those are all $10,000 more than I'm making. And unless I did something wrong on the Internet in looking, doing a compensation research here, it appears looking at these data points, not feelings, these data points that I'm off about 10K on my comp, would you look at this with me and consider raising me if it's real? And he got the raise, by the way. Okay? Okay.

Second conversation was a guy walks into my office and says, you know a guy like me that has, I've got 14 degrees, I've got more degrees than a thermometer. A guy like me working in another company makes twice what I make here. And I said, well, honey, I said, the problem is this is a small business, and your raise is effective when you are. And so the number of degrees you have does not make you valuable. What you do, what you kill and drag in here that we share is what is what makes you valuable from an economics perspective as a human being i value

you but but from an economics perspective and so by the way that guy doesn't work here anymore and because he didn't like my answer uh his rate you know so you go in and just do what you said you said i've been effective i feel like i'm doing this and i you go in and just do what you said. You said, I've been effective. I feel like I'm doing this. And I pulled some research, and here's what it's showing. What do you think? Did I do something wrong? Or do you have other information that I don't have that says that this position, because I feel, you know, based on this,

it looks like I might be due for some compensation upgrades. What do you think about that? And that's not belligerent it's not saying slapping your fist on the table and saying i look this up and you're underpaying me you toxic jerks um it's not any of that it's uh going i'm just looking at this and going guys that do what i do seem to be making a lot more than i'm making am i doing something wrong what did i see here and if you just switch shoes when you're thinking about these things and think about the from the leader's perspective what would you want a go-getter like preston to do you don't want to lose a preston you want to keep them you want

them on the team what would you want them to do i would want them to come in with more than i've been here breathing air for two years and so i need money right it's there's a humility to hey i've done my research. I've done my numbers. Here's my performance. I love that approach, Dave. I love the humility of it. I also, man, I've spent years working with young professionals

that was their first or their second job, and there is this expectation, and, of course, I'm generalizing here, but this idea that we shook hands. I've done my job for a year or two, and what are you going to do for me now? And there's this basic expectation that you're just going to keep picking me up, picking me up, picking me up. And I always want to remind folks, when you shake hands with your employer and say, I'm going to come give it my all, and they say, I'm going to give you this, the only time they screw you is if they give you less than that amount of money. Anything other than that, we agreed as what we agreed on,

and be good with that until you can provide data points to the contrary. Yeah. I do run into that. That's kind of an entitlement mentality. I don't think Preston's suffering from that. Not at all. Not even a little bit. He's got a different take on it.

But I think you're right. There's this thing. It's kind of like a union seniority thing or something. Like, you know, I've been here breathing air for 20 years. I have one year's experience 20 times. Right. And so I'm worth more. No, you're not.

Right. You're still doing the same stinking thing you were doing. What do you think about his question, just dig into the global pandemic? Is there a moment? I think about this back at my house right i can look at my wife and she's exhausted she's been packing boxes all day and helping and moving that may not be the time to say i don't like the way you're parking the car in the driveway could you scoot it over two feet right i know there's a season or there's a moment to ask that that's not a good idea right now is that is that ever coming to play in business or is business just business is business well no i mean it's it's everything's personal and so the

the question is you know if you're asking a leader who is barely making their numbers because of covid for more money you know it's just seems insensitive it's not it's not only insensitive it's impractical right you know we don't make hardly any money. We're struggling to stay open, and you're coming here wanting to raise. Right. That's just tone deaf. Right. You know? But on the other hand, there are companies that have done okay.

Ramsey's done okay. We've struggled during this time, and we had some business units just live events. All that revenue just disappeared. Right. It's gone. Virtually, anyway. Except for virtually. Yeah, no pun intended, Weldon.

But then other areas have gone way up. And so we've ended up at about what we thought we were going to be last year. So our budget projections are about on. And so you know internally we've started giving raises again and started hiring again. And so in that environment, even with COVID, if somebody came up to one of us and said, I think, you know, would you look at this with me? I think I'm off on my comp. And you go, oh, well, no, you're a junior.

You're not a senior. Oh, okay, okay. All right. Well, what have I got to do to be a senior? That's the magic. Now we're talking. The humility question. Love it.

This is The Dave Ramsey Show. our scripture of the day romans 12 to what i sign the total money makeover books with do not be conformed to this world but be transformed by the renewal of your mind that by testing you may discern what is the will of God, what is good and acceptable and perfect. Margaret Mead said, never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has. Dr. John Deloney, Ramsey Personality, is my co-host this hour, this day here on the Dave Ramsey Show. If you'd like to talk to him, we now have a new John Deloney phone number. Yeah, we're working on the radio show, and it is a lot of fun. Now this radio show thing might turn out for you. That's the rumor. You've done all right with yourself, yeah.

So 844, write the number down if you want to talk to John, 844-693-3291. Leave a message and we'll set up a time. Kelly and the production team will set up a time for you to get through and talk to John. So if you want to talk to Dr. John Deloney, 844-693-3291. Chelsea is in Minneapolis. Hi, Chelsea. Welcome to the Dave Ramsey Show. Hi. How are you?

Better than I deserve. What's up? Okay. I have got a question for you guys about, um, my kids daycare. I currently work from home and I have for the last year or so. Um, and my kids have gone to daycare the entire time. Um, I work part time around 20 to 24 hours a week usually. Um, and my kids currently go to daycare. And so I'm wondering if I should pull them.

Like I want to because I want them to be home with me more. And then there's the cost savings too. But I'm wondering if that's making, I don't know, a crazy decision. Can you do your job with them around? No. No, I can't. So that's where it gets really tough is i would have to work like either in the early mornings or in the evenings the late evening

what do you do i can't i'm a medical coder okay so you can code when uh how old are the kids they're one and three oh how many of them so i am, I just have two kids, a one-year-old and a three-year-old. So how long do they sleep in their naps? The three-year-old does not nap. The one-year-old does take like a two-hour nap usually every day. Okay. So I don't want to cut into too much family time, but I'm working. Why do you want to bring them home?

I just, well, one is because our goal eventually is for me to be a stay-at-home mom. That's like what we've always kind of wanted to do, but we just have quite a bit of debt right now that we're working on. So not in the cards right now. So one is just because I want that time with them. Like I want to be the one that gets them up in the mornings. And the daycare days are really stressful when I wake up and it's like, go, go, go, you know, rush them out the door. What about your husband? Does he help?

Yeah, he definitely helps when he's home, but he works a lot more than me. So he is not able to help in the mornings or the afternoons. He doesn't, he can't do drop-offs or pickups or anything. You're asking a guy. And so I am not a part-time working mom and I am not wrestling with that communion with my two little kids. But if I'm you, I would sit down with your husband and see if you could come up with a plan. And I would take him out on Monday and figure out ways that he can help support in the evenings or that he can help support in the mornings my wife gets up before probably before the lord himself gets up in the morning and she she's a writer and so she gets up early early and writes that's the

only time she's got and then she writes again in the evenings and I help with bedtime sometimes. So we work together as a partnership. But yeah, you put that cash in back in the pocket. But also, more importantly, you'd be plugged in with your kids. And the ROI on that is just immeasurable, both research wise, spiritually, emotionally, everything. And it's going to come at a cost. It's going to be a zoo and it's not going to be this glorious baby hugging moment that you think it's going to. It is. that's true um but having a one and a three-year-old in a house is always a zoo and so there's there's just a trade on that so i'd pull them out tomorrow i pull them out monday yeah i i uh uh i i've got a we got a six of them, six and under, as grandbabies.

And so Papa Dave's a big proponent of naps. Yeah, and that's, hey, for whatever it's worth, I've got a four-year-old. She's still taking naps. And I'd get my three-year-old back on a nap schedule and get some sleep boundaries there. You can get a couple hours that way each day. And then you can get some early, early morning hours um you know work when others are sleeping it'll come in and you can pick up some evening hours with your husband picking up some of the thing but one in three is high maintenance they do nothing for themselves you have to do everything except destroy things that's the only thing they do for themselves

anything for themselves it's just you know they're wonderful we love them but they are high maintenance i mean it's it's you know it's it's a lot of work so uh it's real and i had forgotten it until we had a bunch of ones and three-year-olds running around and we do now and um and when they're all at the house oh man when i had a 10 year old and then just six years later we josephine came along and I forgot it all. I think there's a measure of forgetfulness. I don't know if we would do it again if we remembered all that over and over and over. Exactly.

We wouldn't create the human race. But the, yeah, so what you're asking to do is a lot of work. It's a lot of love, and it's a lot of good things but you're really going to have to set some structure where you're running the house they aren't and that's what the nap time thing comes from to allow you to continue to get your work done and you can do that some parents are better at putting structure in place than others and the more kids you got usually the more structure you end up having. And I also recommend having one or two or three women in similar situations

that you can be in contact with because you're going to need a lot of grace. You're going to fall. You're going to need to get back up. You need folks to help lift your arms up when those moments happen. Amen. Adam is with us in Austin, Texas. Hi, Adam. How are you?

Hey, Dave. Hey, John. I'm honored to speak with both of you. I have a great deal of respect for you both. Thank you. We're a little short on time. Go straight to your question, boss. I'll go quick.

My question for you is if I should sell my car. I bought a 2020 brand-new Toyota Prius, which I know is not what you teach. A couple weeks before the pandemic hit, at the time I was living in California and I had a really long commute to work, and I did the numbers between a beater and the Prius and the Prius came out cheaper. So I went with it. Since I bought it, I moved to Texas. I got a new job and gas is crazy cheap out here. I live really close to the office and I'm wondering if I should take the loss and sell it and buy a beater with cash. I know Dave is probably going to say yes, but I just want to qualify by saying that I already saved over 30% of my income,

and my car payment is around $283. What's your household income? $70,000 gross. What do you owe on the car? I put $10,000 down, so I owe about $14,000 now. Okay. So you have a $24,000 car. You owe $14,000.

You saved 30% of your income. Why can't you pay the car off? Yeah, just pay it off, man. I lived in Texas and I drove a Prius. My wife drove a Prius. Pay it off. Pay it off, man. How much money you got in the bank? Okay, so I'm 25 and I just saved up four or five months of emergency

funds. How much do you have? $7,500? $7,500, sir. $7,500, and you owe $14,000. Okay. That's right. And, you know, yeah, do what we teach. Put everything but $1,000 towards the car, and then let's get the car paid off in just a few months here, man, and keep it.

You like the car, I can tell. In year 2030, you'll still be driving that car it's a toyota and it'll be a beater it'll grow to be a beater for you just pay it off man drive it long enough that it becomes the beater you yearn for that's right that's right yeah you're you're right there on the cusp uh the only thing i wouldn't have done in this situation is a i wouldn't have financed it, and, B, I wouldn't have bought new. But you're there now, so you owe $14,000. You've got $6,500 to throw towards it, so you need $7,000.

How quick are you going to get $7,000, $8,000 and knock this puppy out? Fast! 24-year-old making $70,000. Do it tomorrow. Cut your dadgum lifestyle. Stay out of the parties and get the dadgum car paid off. You can do it, man. Yeah.

Good stuff. John, good show. Thank you. That puts this hour of the Dave Ramsey Show in 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. This is James Childs, producer of The Dave Ramsey Show.

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