The Ramsey Show - App - I Went Into Debt And I Never Want To Do It Again! (Hour 2)

Episode Date: March 28, 2023

Jade Warshaw & John Delony answer your questions and discuss: The best ways to be saving money, from the blog: How Much Should I Have In Savings? "Should we pay off our car before our baby arrives?", from the blog: When to Pause Your Debt Snowball What to do when you're starting at "Baby Step Zero", from the blog: 4 Things You Must Include In Your Budget How to prioritize a mortgage and investing when managing health crises, How being out of debt will set you ahead and bring you peace when it seems like the world is falling apart. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving and storage studio, it's the Ramsey Show, where we help you build wealth, do work that they love, and create actual amazing relationships. That's what we're helping you do today. Give us a call. The number is 888-825-5225. We're here hanging out. We're talking about whatever it is

that you want to talk about as long as it has something to do with money, relationships, careers. Give us a call and we'll chop it up with you. Let's take a call. We got Elizabeth from Nashville. What's going on, Elizabeth? How can we help today?

Hey guys, how are you?, guys. How are you? Doing good. How are you? Good. Okay. I hopefully have a simple question. Okay. So me and my husband were talking last night about the budget, and we were just, we're a little stumped on something. Should we be saving any of our money just to save money? Like we do have some things we'd like to save for and we're putting money aside for that. But should we be saving money just to save money? Are you on baby step three or baby step one? So we have the emergency fund, $15,000. Our monthly expenses are about three. We have a thousand dollars in a separate fund, separate funds that like all the bills come out and we, that thousand is basically

like zero. We're investing 6% and we're only doing that because we are technically at baby step three B and we're trying to save somewhere between $1,500 to $2,500 a month for a down payment. Cool, cool, cool, cool, cool. Very cool. So this is outside of the emergency fund, outside of like sinking funds. Should we just, should we be saving some money just to save money? Well, no. And then also, would it be wrong, like if we had money saved up up would it be wrong to use that money if something

came up when we were like oh I'd like new kayaks or shoes or something okay yeah I hear what you're saying um so I do want to call out the fact that you're you guys have got your own system that you're working um it's not the baby steps and that's fine if you want to work whatever system that you Elizabeth and your husband want to work whatever system that you elizabeth and your husband want to work but most what are we doing wrong okay i'm glad you asked thank you for asking oh elizabeth i love that no that was good because if if she had it was choose your own adventure there for a minute john if she had chosen to be like what no what do you mean then we would have been we would have gotten gotten into it but Elizabeth is like I want to learn help me I love it Elizabeth okay so here's what I'll call out um you really only need that

thousand dollars saved starting out that's baby step one your starter emergency fund that's a barrier between you and life 56 percent of Americans don't have anything they can't cover a thousand dollar emergency so by you just having that thousand dollars, you have set yourself up so far ahead of society. So that's thing one. Thing two, do you guys have debt? No. Okay. Baby step two is done. Number, that's wonderful. Baby step three, it said that you, you said you had 1500 set aside somewhere. Oh, 15,000. Oh, sweet. And then you said you had another fund of a thousand dollars. Okay. So we're getting there. Okay. And then you said you had another fund of $1,000. Okay, so we're getting there. Okay, and then 3B. Just like if we have the thousand in there, it's just like a buffer between like if something happens and we don't want to touch the emergency fund. So it's an

emergency fund for your emergency fund. Yeah, it's just that's where all the bills come out. And so like if something happens, I see. Yeah, it's just like a little cushion. Yeah. I'm not going to yell. I'm not going to yell at you for that. I'm not. I get it. Some people do it. I probably wouldn't do it. You got $15,000, but I get it. I'm not going to yell at you about that. Are you guys saving up for a house? I got you. Yeah, that's where we're at. We're at Baby Step 3B. Okay, so technically you're not at Baby Step 4 yet, so I don't know that I would be contributing to, you know, investing just yet if you're in 3B and you're trying to like kick this thing out. I thought Dave said you could do like a little mix of both. You could. It just depends on what your goals are,

if you're trying to hurry up and do this or not because i mean technically the baby steps work in order um but like if you were a person and you were already in a house and you're saving for another house i wouldn't tell you to stop investing to save for another house do you see what i'm saying like i wouldn't have you go backwards in that way so if you want to do a little mix of it i'm not mad at that but if you're trying to move quickly i'd probably hold up for a minute and walk the baby steps exactly in order i hear you you know what i'm saying so um can i can i ask you this elizabeth what what are you scared it's gonna happen what do you mean john you've got you've got layer on top of layer on top you are trying

to insulate yourself from the world fortification um what are you what are you scared is gonna happen john i went in debt and i never want to do it again okay having a little cushion let me just say this in the account that you're paying your bills from having a line item in your budget that's like hey no matter what there's always hey, no matter what, there's always $500 here. No matter what, there's always $200 here. I'm not mad at that. I think if it gets excessive, it could be an indicator of possibly something else. So Elizabeth, yesterday I was talking to, his name is Sal DiStefano. He's a good buddy of mine,

and he is with the Mind Pump guys in San jose they are they basically are doing for the fitness and nutrition industry what dave is doing has done for 30 years for the finance industry i trust the guy and he's brilliant here's what he told me he said most um people fail i think it's up to 90 of workouts and diets fail because people are they don't like what they see in the mirror so much. They are exercising because they hate themselves. And so exercise becomes a form of punishment for how I look, for how I've eaten. And what he said is, if you go into the gym to exercise as a form of punishment, you deserve a hard workout today because of how you look and how you eat and how lazy you are. And these are, these are all things we're saying to ourself that that is going

to fail. It's going to fail. And so what I want to tell you is you went into debt, you did, and you owned reality and you and your husband have worked your butts off. I want you at some point to stop punishing yourself and stop setting up all these curbs for what if I do it again? Because that's not you anymore. And I want you to start going to something, not dragging around this past and trying to create all these imaginary buffers for things that for ways you might do something stupid again, that's not who you are anymore. And go towards something, right? So when people go to the gym because they know they're worth that hour,

when they eat right, because I know how good I'm going to feel tomorrow when I wake up, those people stick to those diets. You're talking about identity change. And that's what I'm talking about here. I want you to give some credit to my new friend, Elizabeth, that that's your past. You've been there.

And we're going to follow these baby steps all the way to the end. And we're going to wake up millionaires in a few years because we started going towards something. We didn't continue to run from things. Does that make sense? I hear you, John. Yep. That's so good. Elizabeth, you're doing everything right.

John, I love what you just said. You're talking to me on that. Elizabeth, he was talking to both of us on that one. No, I appreciate the call. Hey, if you want to buy, Elizabeth, if you want to buy kayaks, save up some money and buy some kayaks. Go kayaking. You're out of baby step two.

Do a little something, something. And you got your baby step three done. You can do a little, you can buy organic diapers. You can buy kayaks. I still don't even know what that means. But get them anyway. Get them anyway. You can spend a little bit of your money. Remember, you can give your money, you can save your money, you can spend your money. And don't forget to have a little bit of fun with this. You know what I'm saying? Guys, this is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever

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And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. You're listening to The Ramsey Show. I'm Jade Warshaw, your host, joined by Dr. John Deloney. And we're taking calls about your life and your money give us a call the number is 888-825-5225 and uh you know we'll talk it up with you we'll chop it up with you we'll give you advice we'll help you out with whatever it is that you feel like you need

help with with let's take a quick call uh from Brady in Orlando Florida what's going on Bradley hey guys uh it's good to hear from you. You too. How can we help today? So my wife and I are expecting our first child in October. Hey, congrats. That's exciting. Thank you. Thank you. And so we have enough cash to pay off our car loan. But I've heard you guys, you know, say, you know, save up just for anything, like expecting anything that can happen between now and then. I was just kind of curious of like my situation. We owe like 9,700 and we have about 14,000 total in savings.

But I know within those six months we could you know grind and get back up to where we are you got go ahead I would I would jade tell me I'm wrong I would do both I would keep that we call it stork mode around here but I would I don't see a problem with keeping that money in your account and working like crazy until that baby comes and then being able to write that check for the car when you find when the when the everything goes smooth with the birth everything's nice and good you got that kid sitting at home everybody's smiling and um then you can just write get online write that check and be done with it and and also you've already it's it's already been

replaced in your emergency fund right it's it's two birds one stone yeah it's already been replaced in your emergency fund, right? It's two birds, one stone. Yeah, it's kind of a wash. Yeah, that's exactly what I would do. Nothing's stopping you from putting that money on the car once everything goes smooth and everything goes well, and you've got it stockpiled there. Is there any other debt to speak of, or it's just the $9,700? Just the house, but that's different.

Okay. Yeah, I'm sitting here thinking, Jade and Bradley, I wouldn't, I don't know if I'd be able to breathe if I had a baby on the way and had $5,000. No, I would not liquidate the savings to do that. I would keep that there. I'd do what John said. I'd continue to work hard, continue to stack up as much money as I can.

And then when baby comes, pay off the car and you'll have some extra money in savings as well. Yeah, that feels right. Yeah, because I know we'll have the car paid off probably within the next five, six months anyways, because we put down, you know, almost triple, quadruple sometimes. Yeah, I mean, yeah, baby step speaking, let's say there is no baby on the way. Of course, you would liquidate this $14,000 and take the $9,700 and pay it. In this case, we don't want to do that for the reasons that John said. It's actually the opposite. You want to stop going crazy and pile up cash. So in that case, yeah, something tells me that in the next six months,

you're probably going to make enough in extra money that you could pay off this car and keep the 14k there something tells me you're going to be able to make that happen am i am i close yeah and the other thing holding me back was just because my wife's planning on taking off a year so oh so you need to stack up even more back our salary which will cut back our salary you know total by how much uh she's a teacher so it's a little over 40 so what's that what's that car note per month yeah uh 500 okay so that's that's that's not not the entirety of her paycheck but it's i want that you know i want that gone before she yeah takes off right so when she stops working and that 40 000,000 is out of your equation, how much are you bringing in?

About $70,000. Okay, so you guys can live off of that. Yeah. All right, cool. Especially with no payments, right? Yeah, I like that plan. I think that's great. Again, a lot of what we teach here is so that you can have options

to do that kind of stuff. It's freedom. It's just you can choose freedom. To be able to say, hey, we can forego your $40,000 income and we can just skate on 70. That's what I'm talking about. And let's be super honest. You may take a year off of getting really, really far ahead.

Right. Yes. And that's okay. You got a brand new baby. Enjoy that baby. Yeah. Help out around the house. Look, let me

tell you i would rather be free and and be on that corolla life then be all day man then be working and need all the paychecks and all the money and to support all the debt so i can drive i don't know the the bmw or drive that mercedes man i would rather just be free i don't know about you i will drive some used vehicles with a hundred thousand miles on it in a second, John, for some freedom out here. All right. Our question of the day is brought to you by Neighborly, your hub for home services. When you need to make repairs, when you need to schedule routine maintenance or find local help, home improvement projects, Neighborly is your source for reliable home service providers in your area. So go to

Neighborly.com to start your search. All right. Today's question comes from Sal in Virginia. Sal writes, I've pretty much dug a hole for myself with so much debt, which I'm barely able to keep up on the payments. I went over my limits on several credit cards and have a few loans and I'm very close to hitting $90,000 in debts. I want to know if it's okay to temporarily stop paying for some of the big payments and focus on the smaller payments first and then focus on the bigger payments. I'm just unable to make all the payments and be able to pay for other necessary things like rent, utility, and transportation. For the past few months, the past couple of months, I've actively tried to sell more of my belongings,

which I really don't need. I've also taken on a couple of weekend jobs, but I'm still struggling to keep up. Please advise on my best option to getting back on track before I try the baby steps. Man, this is... It's a mess.

I'm so grateful for this question, Sal, because on this show, John, we yell at folks all the time. Look at how you're spending your money. You're not doing it right. All this stuff. But this is a real deal right here because this is somebody who they're doing the best they can. They made some mistakes and, you know, they're just trying to make ends meet. Let's be real honest.

There does come a moment when you've dug yourself quite a hole and you can work two or three jobs and you're making a dent in that hole. Man, you're preaching to the choir. It just is, right? And so it's easy for us to be like, you just need to get out there and get another job and a third job. Sometimes you dug yourself a hole and it's a mess. Look, when you read Sal's question, I relate directly to that. And I hope that Sal and anybody else listening knows. Man, back in, gosh, Sam, what was it?

Back in 2012, 2011, we were in exactly Sal's situation. So much debt, so many payments. We literally couldn't pay them all. We had to stop with some of them and just tell the others to take a hike. Be like, hey, you're just gonna have to call my phone. And that's what I, you know, I refer to to that i know people call baby step zero different things for us baby step zero was simply quit creating more debt like if you can just stop stop like not drown and not make

the water any deeper that is successful and that was uh gosh almost two years of the first part of our journey was just trying to get enough footing to where we could just pay all of our bills um so i understand what that means and when you're in that situation you've got to focus on that four walls you've got to focus on hey i got to keep the rent going like i can't default on my rent i can't get evicted that's number one you got to eat you got to make sure that there's food coming in you're eating you got to keep the lights on utilities that's next and you got to eat. You got to make sure that there's food coming in. You're eating. You got to keep the lights on. Utilities.

That's next. And you got to get transportation. It doesn't have to be expensive transportation. I don't care if you're taking the bus. You got to make sure there's money for gas, bus ticket, Uber, ride, whatever it is that you need to do to get by. And if you're able to do that, you can breathe at night. And can we just, this isn't to celebrate us. This is to just provide a picture of what this looks like.

I have rented an upstairs bedroom in my friend's mom's house before. I have driven a $3,500 truck to my dean of students job. Come on. You know what I'm saying? Like I've driven my wife's old used Corolla that she sold and I bought back at a lesser, you know what I mean? Yeah. Like you just, and I know you guys I

mean you and Sam geez man y'all went through it right look I remember on a Friday having no money in the account I would write I would go to the grocery store because we needed food I'd write a bad check on a Friday knowing that check can't clear on Saturday Sunday that gave me two days it gave Sam and I two days I'd teach lessons I'd do anything I could to get money in the account before Monday so it wouldn't overdraw. Sometimes we did it. Sometimes we couldn't get it. Because I had to eat today, right? Got to eat. You got to eat. And it was like, I knew to do that because I'm like, okay, they can't charge this check over the weekend. This is my chance. So I get it. If you're out there and you're struggling, I see that. When I'm out here going on a rail and yelling at folks,

I'm not talking to you. I know that you're scratching your claw and you're out there and you're struggling, I see that. When I'm out here going on a rail and yelling at folks, I'm not talking to you. I know that you're scratching, you're clawing, you're doing whatever you need to do to get by. The folks I'm yelling at is the people who can pay their bills, who are sitting on their hands while the government is holding your student loans off and you're waiting for that single person to pay that bill for you. You're the one that needs to get off your butt and do some work. This is The Ramsey Show. What's up, guys? You're listening to The Ramsey Show. My name is Jade Warshaw.

I am joined by Dr. John Deloney, and we're taking calls this hour about your life, your money, your relationships, what's going on with the government, what's going on with taxes, what's going on with my job, what's going on with my family, whatever it is, give us a call. Triple eight, 825-5225. We are here for you. We're ready to talk about it. We got Carolyn. We got Carol in Edmond. Okay. I got to put my glasses on so I can read a little bit better.

What's going on, Carol? Hi, can you hear me okay? I definitely can. What's up? Okay. I am 67. My husband is 66. I have cancer. My husband has a mess. He is 100% disability retired from VA, with the VA.

Hold on a second, Carol. Hold on a second, Carol. Tell me about your cancer. I'm so sorry. Me too. Oh, well, I had endometrial cancer in 2015. I still am stable, but I had to get off all of my treatment because it was causing too many complications, hypertensive crisis. But I'm stable. I know you're stable, but that's a brutally painful cancer, right?

I'm doing okay. I know, but don't just wipe... You have a right to your pain, too, okay? This is coming from your friend. I'm doing pretty good right now. I have a go every three months for screening. My husband

got in us. He was the cornet soloist for the United States Marine Band and developed multiple sclerosis. Oh, um, my husband got in us. He was the cornet soloist, the United States Marine band and developed multiple sclerosis in 1989 and retired in 1990. He is basically in a wheelchair now. So his disability went up to a hundred percent. Um, he retired, he was a college professor for 25 years. Well, longer than that, really. And he retired in 2020. We refinanced our house to 2.65%.

And we do not have to pay property tax because he's 100% disabled. Okay. So our monthly income is approximately $9,200 a month with Social Security, which we took early because of our health. His VA disability and his pension, which I am entitled to when he passes, that's the way the Oklahoma Teachers Retirement works here. Okay, so the pension is for you. Wonderful. Yeah. Okay, so we are completely out of debt except for our house because we got a PhD in the UMD and went on to do postgraduate work.

We are behind in our retirement. We have approximately $300,000 in retirement. We do not have to touch that right now. Our expenses are about $4,500 a month. I just did our budget and it's $4,000 something without, you know, fluctuating on our electric and gas. Sure. So at any rate, our question is, we don't know, our financial advisor said throw everything at the house, get it paid off. If you really want to get it paid off, get it paid off. But I'm concerned because if I pass first, he's fine. He doesn't lose anything. If he passes first, they slash his VA disability. And how much of the $9,200 is that? Let's see. He gets about $3,900 and it would go down to about $1,451 because he's only been 100% for three years and you have to be at least 10 years to get. So you'd go down to a

little under $8,000 a month? Probably, yeah. And Carol, when that happens, you want zero liabilities. Right. But the thing is, I want to know if we should follow exactly the baby steps and keep putting 15% into investments to catch up and then still pay the house off, because we've been putting about $2,000 a month toward the principal. How much left do you have on that house? The house is worth $365 and we have $151 left as of now when I make my underpayment.

When the new month comes, it'll be a little lower, plus what we throw at the mortgage. I could sell it and still get a good profit, but I'd really rather have it paid off in case I don't want to move. Can I ask you a hard question, Carol? Yeah. What's precipitating this call? Does somebody get a bad diagnosis? No, we've just been thinking about this.

When he retired and we realized we needed to get our affairs in order because of my cancer and his MS, we went to our attorney and our financial planner. We got our estate in order. We got everything, DNR and all that. But each one of you could be 5, 10, 15 more years, 20 more years. Yeah. Okay.

Well, here's the thing. You're in a good position because you've got the $300,000 nest egg, but you're not touching it. All this $9,200 is from social security va and pension aside from that 300k right but we don't and we only spend about with our bills right you're only spending 4500 approximately so it depends on what our electric or gas is if something if it were different if you were like the 300k is all we have and our social security is only 1800 then i'd be like you can't keep this house but because you're not

touching this nest egg it does have the ability to grow i'm with your financial advisor i'd work to get this house paid down carol if you were my mom and she's just south of you uh and across the border in texas if we were sitting down having this conversation i would tell my mom i want no matter what happens to dad i want to make sure you've got a house that nobody can come take that from you and so i would do everything i could because what you're exchanging is this illusion that i'm going to put this money in the market and it's going to replace that amount of money I would technically lose in the VA payments. And why don't you just wipe out your house payment and you get to the same place, but you're more secure. And even if the worst were happening and you did lose that VA payment, you're still making $8,000 a month.

It's not like it's taking you down to $2,000 or something like that. You still have a nice amount of money to live off of. And it's still far more than what you need. And we're not extravagant people. We don't, I mean, you know, we are going to have to get another car soon. We have, what, 2009 Subaru, which I love and I'll keep till I die if I could. Hey, those things will run for a long time. We kept our other one for 17 years until my husband had an accident. And that's when we found out he couldn't drive anymore because he had optic neuritis and didn't know it.

Carol, here's a, here's a common thing. And I'm speaking about something I've only had conversations about i've never personally experienced okay you have had to stare down cancer you have had to watch someone you love who was the picture of strength and the and who led entire um um groups of of men and women as the strongest. You've watched his body revolt against him and take him and fold him up. And so you have seen what most of us only think could possibly happen someday. You've experienced it. and so often when that happens we try to mitigate every single variable in our life and we do that by holding everything really really really tight and what we do is we suffocate the joy and the breath and the laughter out of the last few precious moments

we have and so i want to tell you um jade and i take calls with people who call in in a similar situation and they have zero right and so i want you to see them you've got nine thousand dollars coming in and you've got a nest egg is it a million dollars is it dave ramsey size no it's 300 000 bucks you can get through the end of your life and never ever touch that thing. Yep. Because you got money coming in. I want you to open your hands. Open your hands. Open your hands. Y'all have done so good.

So good. You're doing better than you think you are. Pay your house off. Yeah. Take off the liabilities. Take off the risk. And then look at that precious husband of yours and say, let's just have fun till the wheels fall off here.

Yep. Y'all are doing so good. Guys, this is why we say, this is why we say, get your money in order. Get your life in order. It may not be raining yet, but at some point it's going to rain. And you're going to wish that you had your money set up. Carol's situation, it's stressful and there's some sad things going on, but her money is not the problem. You're doing great.

This is The Ramsey Show. You're listening to The Ramsey Show. I'm Jade Warshaw, your host, joined by my co-host today, Dr. John Deloney. What's going on with you, John? Doing all... You know, it's a heavy time here in Nashville. It is. I was going to say it's all right, but it's not it's a it's a tough tough tough day here in nashville yeah we got some things going on we got some things going on but um we're here to take your calls we'll talk

about your life we'll talk about your money give us a call the number is triple eight eight two five five two two five in the meantime john we need John, we need a little hope in the world right now. So let's talk about Financial Peace University. I love this topic because it's all about the hope. So with debt payments and now inflation stealing more and more of your paycheck, we know a lot of you feel like you're drowning. I've been there, done that, got the t-shirt, shrunk the t-shirt, and now you're scared to death that you won't have enough money to take care of your family. Man, you shouldn't have to live like that with that kind of stress,

but if you want these things to change, you've got to say that I've had it. I've decided to try new things. I'm doing something different with my money. I'm not repeating the same old cycle. And that means it's time to try Financial Peace University. This is our nine lesson course that'll teach you how to beat debt and build wealth. It's

everything that you wish you'd learned in school, really, about how to handle money. I'm actually teaching an FPU class, a group of, it started with a thousand folks, John. We got one class left tomorrow. And when I tell you, these people are in here changing their lives. So when you hear me say stats like nearly 10 million people have taken FPU and they don't worry about money like they used to. They're in control and you can be too. These are real people sitting in real seats, making real decisions. It's not just like, oh, 10 million people. No, these are real people in daily life. I'm one of them. They're really changing their lives. You've got to decide that you're done stressing out about money. You've got to take control. Start Financial Peace University at ramseysolutions.com slash FPU. That's ramseysolutions.com slash FPU. Hey, let me tell you this. We talk about

they don't worry about money like they used to. Yeah. I've got buddies who don't owe anybody any money at all. None. Yeah. Did you know the last six months, all the conversations are about all the opportunity out there now? Man, yes. It's like you watch the news and it's the end of time. And I walk, we have these big TVs back in the PR area where the media is.

And it's all these red arrows pointing down and all these pundits talking about the end of time. Yeah. All the folks I'm talking to have smiles on their face because it's opportunity time. It's buying season. It's, hey, we could possibly do this and I could possibly get this. This might be the right time to buy this. It's a totally different, everything is different because they don't owe anybody any money. They've taken control of their life. Can I tell you that back in 2008,

2009, when the world was just crashing down on us, That was when Sam and I were just in the thick of, we had just gotten married, student loans coming due. Everything is just, I mean, I can't say the words that I want to say on the radio. It was terrible. And I remember hearing Dave on the radio say, when things like this happen, he's a spectator. He's not participating in it because he's risen above it financially. And I remember thinking, oh my God, that sounds like the most peaceful thing that I can think to write, to not be part of the real estate craze. Cause in my neighborhood, we were trying to sell our house and there were, I don't know, 40 other houses just like ours actually better, you know, for sale and just not being

able to make ends meet. And I'm listening to this guy talk about being a spectator. And I thought, am I ever going to get there? Am I ever going to get that chance? Then 2020 happened. And I was like, okay, this is what it feels like, fully funded emergency fund, even though both Sam and I's job were cut off in 2020. But there's still a feeling of peace that you can have

when you do this stuff and you get your money money um in order and i just i don't know if you're listening today man you want to be a spectator you do not want to be out here scratching and clawing when inflation is up you don't want to be the people that have to take to social media with their rage because because they can't sleep at night and because they're arguing arguing with their spouse and because they just yelled at their daughter for asking for lunch money. Do you know what I'm saying? You don't want to participate in that. And the stats, guys, I got to tell you this. This came through my email and it burns me up for many reasons. It burns me up because I care about you guys. I yell at you, but I care about

you because I know what's possible. But when I see stats about savings that say 36% of individuals have more credit card debt than they have money in savings, A, I get it because I've been there, but it pisses me off because you don't have to live your life like that. When I see that 10% have no cash set aside, when I see that 56% of Americans can't handle a thousand dollar emergency. And so they go into credit cards, John. And they look to credit cards as their savior because culture has told us you can't exist in this world.

You are not powerful enough to handle your own money. You need credit. You need debt. You need to borrow in order to make your way through life to the tune of $930 billion. And hey, can we call people out right now? Call them out. I guarantee you the business that I work for

makes less money because we don't accept credit cards here. Oh, come on. You have to spend cash. And so some of you are sitting out there saying, well, I don't use credit cards. I got cash. But your business accepts them.

And so you are participating in the madness. And you can sit on the sidelines on your fancy couch that you paid for with somebody else's debt. And you can say, look at all those stupid idiots. You are a part of the problem too. Until everybody's intellectually honest across the board, those who are propping up their lifestyle with credit cards and those who are accepting them as a way to make their wardrobes nicer while people are drowning. Everybody's participating, man. Look, I saw there's this girl i follow on instagram and she

put it on there she was like i am not she said i sell less considerably less because i do not do buy now pay later i will not accept it as a form of payment for my uh what i'm selling and i i love that kind of integrity because out of the system yeah i'm guys the average credit card balance is almost six thousand dollars i don't know where you come from but where i come from that's a little Yeah, guys, the average credit card balance is almost $6,000. I don't know where you come from, but where I come from, that's a little bag to have $6,000 extra. Come on. And you're wondering, well, I don't. Where's my emergency fund?

There it is. That's it. Times six. That's your starter emergency fund right there. Times six. And the sad part about it is most of us and most of you probably got the credit card to handle an emergency. And now you can't afford to handle an emergency and now you can't afford to fund an emergency fund because of it that is this the sad part of it and the serendipitous part of it now it says delinquencies are up year over year the credit card delinquency

rate is at 2.25 percent now i read a stat that was saying delinquency is not just on credit cards but on cars we're starting to see people get upside down in cars because we car payments they went out of control percent of american consumers pay at least a thousand bucks a month john don't tell me that a thousand don't tell me that john a thousand dollars on a depreciating asset that you drive a maximum of one hour a day that sits parked in on a piece of concrete for 23 and a half hours a day don't tell me you can't get an emergency fund when your car note is a thousand dollars that's a lie jay that gives me hemorrhoids yo that's a lie gives me hemorrhoids it's preparation each time it's a thousand dollars a month look at this the average car payment uh monthly car payment for new cars is 716 look i try to tell somebody look that's the average that's the average that's the average and i tried to tell somebody i tried to tell them and

they didn't want to listen on social media i said do you understand that just investing not even the whole 700 if you had 500 that you put into good growth stock mutual funds and you kept it there and you let it stay for 30 years, you'd have over a million dollars. But we can't tell ourselves no for just a second. For just a second. We have to say yes to the car note and not just any car note to the tune of $717.

I'm here to tell you, you do not have to participate in that. There is a whole life. I feel like the beginning of Let's Go Crazy and Prince is like, dearly beloved, we are gathered here today to talk about this thing called life, a beautiful thing called life. You don't have to participate in debt. Opt out, opt out. You can opt out. You can save up your money and you can get a thousand dollars saved for an emergency and then you can pay off your debt and then you can build that up

and get three to six months saved. You can still invest for retirement. You can pay for your kid's college. You can pay off your house and you can actually do this thing called living and giving. Giving, John. Yes.

You can actually give some of your money because you've been smart with your money and you can actually share some of it without guilt, without shame, without wondering if you're going to be able to pay your bills. You can share it. You can share it with your kids, their kids, a good man. My granddad sat down and talked to me about being a World War II vet. And there's a lot of grandparents are going to have to sit down and explain to their grandkids why they just had to have a new suburban.

Not in this house. That does it for this hour. Be sure to join us next time. And when it comes to changing your life and money, remember this, you can tell me that you ain't going to do it, but don't tell me that you can't do it because with Christ, all things are possible. Hey, it's Dr. John Deloney. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for our newsletter. Again, that's ramsesolutions.com

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