The Ramsey Show - App - If You Don't Believe You Can Get Out of Debt, You Won't (Hour 2)

Episode Date: January 16, 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. You jump in, we'll talk about your life, your money. It is a free call at 888-825-5225. Thank you for joining us. You jump in and we'll talk. Matthew starts off this hour in Salt Lake City, Utah.

Hi, Matthew. How are you? I'm folks in Memphis. Dave, how are you? Better than I deserve. What's up? Okay. I'm sorry. This is really exciting. I'm getting a little anxious here. I'm wondering, how do I know when...

Is there ever a good time to dip into ratios? I know saving, giving, and spending, but I know they also say give 10%, save 15%, and then you spend the rest. But how do you know when it's okay to give a little more, and how do you know when it's good to save a little more or good to spend a little more? Well, when I'm working on the baby steps, I'm focusing on that baby step exclusively. And so in baby step two, we're getting out of debt, everything but the house. We've listed our debts smallest to largest, and we've stopped saving completely. And we tell folks, you know, give 10% as a part of your budget. But any money you can squeeze out of your budget,

other than that, goes on that baby step until that's done. When that's done, then everything goes into the emergency fund except the 10% going to giving. And so, you know, we start there. Then once that's done, then we start putting 15% of our income into retirement, 10% tithe. If you're a Christian, you're giving a tithe, a tenth of your income. Right. Or if you're not, then you're just giving 10%. We just allocate 10% for giving because you always want to be giving at least that. And then that's at the point that you can start to say, well, you know, in addition to that, if I want to do some additional giving, that's fine.

I wouldn't do any additional investing at that point because I'm going to start throwing it at kids kids college, baby step five or six, paying off the house early. When you're in baby step seven and everything is paid off, house and everything, you've got your emergency fund in place. Now we're putting more than 15% into investing, and we're certainly giving more than the baseline of 10%, and we're going to be enjoying some of that money. But, you know, there's not a set guideline after that point. But it's good to have some ratios. Okay.

That's what I thought. So, like, when I'm working, like, when I'm working, go ahead. I'm sorry. Yeah, well, my thing is I'm 18, and I'm hoping to stay out of babysit, too, for the rest of my life. Good. I've never had any debt, and I'm hoping to stay out of Baby Step 2 for the rest of my life. Good. I've never had any debt, and I've never wanted any debt.

Good. So I'm going in. What I would tell you is let's get up to these other baby steps. Get your house purchased. Get it paid off. All that kind of stuff as fast as you can. But, like, for instance, Matthew, when I'm working with a huge income earner, like I was meeting with an NFL player a while back, okay, and the guy's making $10 million a year. Okay. Yeah. a huge income earner like i was meeting with an nfl player a while back okay guys making 10 million

dollars a year okay yeah you know at 10 million dollars a year he needs some kind of a guideline to not just spend it all right he's in his mid-20s and you know um 10 million dollars a lot of freaking money and you can end up broke because the nfl stands for not for long their average career their average career is 3.7 years right so you know you better you better bank some of this while you're at it and so you need to be say what percentage of my income do i need to live on in his case he wisely but against all of his buddies suggestions suggestions, he wisely said, I'm going to live a great life on $500,000 a year. That gives me $9.5 million a year to invest, right, and to give out of that. And he could do a lot of giving out of that half million and still be all right, right? But if he'll just live like that for a few years, he'll come out of there with $30 or $40 million set aside,

and he's set, you know, for the rest of his life. But instead, so you've got to have some kind of a percentage, some kind of a guideline that says, this is how much I'm going to spend, otherwise you'll spend it all. And a saver will save it all. And a giver will give it all. And a giver will give it all. And all is a mistake. You should always be doing some of all three. Always be a giver.

Always be a saver investor. Always be enjoying your money. Now, you can do small percentages of enjoyment if you have a huge income and have great joy. Great. You get to do some pretty cool stuff if you live on 5% of $10 million. I mean, it's not a bad life, you know. It doesn't take much. It doesn't take much percentage to spend on you to have a great life.

So that's where you get to when you get into the baby step seven and beyond stuff. And you're right on your way. Rhonda's with us in Dayton, Ohio. Hi, Rhonda. How are you? I'm great. How are you? Better than I deserve. What's up? That's awesome. Well, I had a combination question because I, too, have read the Love and Respect book by Dr. Emmerich. And I I just wondering what to do with my life and my husband we've been married for quite a while and we cannot get on the same page financially we've not been able to do this for over 30 years um there's debt out there and most of it is

honestly student loan debt we don't have any car payments I don't even couldn't tell you how much he actually makes right now because we have so many issues with that. And I know it's a marriage problem. I get it. I can't, I don't know what to do to get through the problem. And I need your advice. Okay. Um, well, I don't know that there's one magic pill here because this is these ruts are pretty deep they're 30 years deep and so jumping up out of that rut is not a not an easy thing it's probably a lot tougher than just a guy on the radio is going to get you signed up for um yeah i know but but i think there's two things that go on um one is he um what's your husband do for a living? He's a financial advisor.

Okay. All right. Which makes it even harder because he won't talk to you and he won't read your book. And I actually bought your book for all of my children. This is not about me. Okay. This is about you. I know.

I'm going to be okay whether your husband reads my books or not. I'll be all right. Okay. So don't worry about me but the uh the thing is the point is though that his wife has been um completely discounted and your vote doesn't count your husband's arrogant and uh he doesn't need your input either and that needs to change for your sake because you're going to blow up one of these days and we're not going to be able to get you to land back on this planet it's going to eventually you're going to go there and and i've i've met people 35 years later get divorced i mean and you don't want to do that. So I think, but most of the time, most husbands are good guys, most of them, and he's just not hearing you that this is as serious as it is.

And so I think you need to start explaining it to him that this is very serious and you're not going to be okay with this continuing this way. And I think you guys need to sit down with a marriage counselor. If he won't go, you need to go without him and get some advice on how to deal with him. That's better than advice I can give you. Good, solid marriage counseling is in desperate need here. This is the Dave Ramsey Show. Are high health care costs getting you down?

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It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thanks for joining us, America. Chris is with us in Washington, D.C. Hey, Chris, how are you? Hey, Dave. I'm doing good.

I really appreciate what you do. I've been listening to you for a long time, and I can't say that I follow all the rules, and I hope I don't get taken to the woodshed too badly. But you've definitely changed my family's life for the better. Cool. Cool. How can I help today? Sure.

So long story short, my wife and I sold a house that we had on the market for about a year, and we took all of the equity that we had. We have another mortgage in the house that we live in, but we paid off all of our debt except for the $30,000 of student loans or so that we had. We have another mortgage in the house that we live in, but we paid off all of our debt except for the $30,000 of student loans or so that we have. So we have an envelope budgeting system that we try to adhere to pretty well every month. But we have about $30,000. We could pay the student loans off today, but we would not any longer have like our 90-day slush fund. So I'm trying to decide if I should write a $20,000 check to pay off what I can today and keep another $10,000 or so set aside for our 90-day of emergency fund,

or if I should continue paying what we've budgeted, which is $1,000 a month, and then write a check when I can just pay it off in a single lump sum. I'm basically afraid to let go of the money that we've got right now. So that's kind of my question to you. What's your household income? A little over $200,000. Okay. And so why would you only be paying one thousand dollars a month on this

it's i would say um okay lifestyle that we don't want to give up and we feel that you know paying off the loan and yeah a year to two years is acceptable for us yeah that's that's kind of pitiful in other words yeah yeah and you knew that you knew that i didn't have to i didn't have to point it out you already knew that was coming um part of it is we do we're putting you know about two thousand dollars a month in 401k yeah and that's okay now let's let's. You said earlier in the conversation that you have been listening to me for a good while. Yes, sir.

Okay, so it ought to be fairly easy for you. The only question is, are you going to do your plan or are you going to do the plan I teach? Either one's okay. You're not a dumb guy. You make $200,000. You're going to be all right. You're not going to go bankrupt. But if you're going to work our plan, you know what that plan is, right?

It would be to cut some of our lifestyle choices so that we could pay it off now and save up our money. No. Save up the 90 days as quickly as we could. No, you've linked the test. Okay. Baby step one is save $1,000. When you start getting out of debt, you clean out all non-retirement savings and you throw it at all non-mortgage debt in baby step two. So all of that says we'd pay off the student loan 100% today,

leaving you penniless making $200,000 a year. And oh, by the way, during that time we stop, and we stop putting money into the 401K until we get the emergency fund built and we're debt-free with Baby Step 2 and 3, right? You heard all that before? Yeah. Listen, you get to do what you want to do. You're not going to do it, okay?

But the system is. Well, no. Oh, you're not. I mean, it's okay. I'm not mad at you. And I'm not taking you to the woodshed but here the the process is this what we have found is that you have a weak foundation in your home because you still have debt and you don't have enough savings for somebody that makes

the money you make in your emergency fund and so the foundation in your financial plan is weak it's not necessarily going to fall in because as long as your income stays where it is but uh you know so what would i do if i woke up in your shoes is the first thing i do before i went ahead and finished building my house is i'd shore up the foundation and so i'd write a check today and i'd be debt free that you're not going to do that but that's what i would do and then i would stop my 401k temporarily and you're not going to do that but that's what i would do and then i would take every dollar i can squeeze out of my budget and i'd put thirty thousand dollars making two hundred thousand dollars a year into an emergency fund a rainy day

fund and i could do that in about five months. Okay. Okay. Four or five months. And I'd have, I'd have zero debt except my home. I'd have my $30,000. And so at the end of five or six months or whatever that ends up being, I'm going to restart my 401k and I'm not going to play with it anymore. I'm going to now put 15% of my income into retirement, which are the kind of money you make. That's going to make you very, very wealthy. That's baby step four. Five is kids college. I would start that or restart that at that point.

And six is pay off your house early with any other money I can squeeze out. And what we're finding is with all the millionaires that we've studied, the ones that have followed our stuff or the ones that have followed their own stuff, is they do, there's two things we see them all doing. They steadily invest in their 401k and they pay off their house early and they avoid all other debt like the plague. Some of them have a credit card, much to my chagrin. I don't want them to even do that. I want them to have debit cards, but some of them actually have credit cards, but none of them carry a balance under any circumstances ever and haven't in 30 or 40 years. They pay off their home in 10.2 years on average because they worked some semblance of what I'm laying out here. The problem with your situation is you're trying to do too

many things at once. You make really good money and it covers up your mistakes you know there's enough salve on this because of the income that that you can you know you can limp along and be okay you'll be okay but you're not maximizing the opportunity that's at your disposal so you get to do what you want to do my prediction is you're not going to do any of it but it's's a good discussion to have. It's fine. And again, I'm not calling you out. It's just, you know, you make 200 grand. You don't have to do it, you know, and, and you don't, you know, it scares you to death and your wife will think you're crazy. If you come back in and say, announce that that's what we're going to do and all that's going to happen. And you know, you're not going to do all that and that's okay it's okay i appreciate having you a listener anyway and hope we can continue to entertain you open phones at

888-825-5225 you jump in we'll talk about your life and your money brian's with us in modesto california hey brian how are you hi dave thank you so much for taking my call sure what's up i got um well thanks to you i'm out of debt, and I'm officially weird, so that's awesome. Good for you, man. So thank you for your plan. So now I'm on Baby Step 6, which is a payoff mortgage, and I'm just having trouble figuring out how much and how aggressively I should be putting towards that, towards principal every month.

Currently I'm thinking, okay, if I put $500 towards principal every month, that should be okay, I guess. I don't know. I don't know if I need to be more aggressive or what you think. You know, I'm still kind of. What's your household income? 98. Good.

You married? No, sir. Okay. You got your emergency fund in place? Yes, sir. I got $20, emergency fund in place? Yes, sir. I got $20,000 in there. Good. And you're putting 15% towards retirement?

Yes, sir. My biweekly income is after retirement and health care and all that stuff is $2,100. Good for you. Okay. And what's the balance on the mortgage? Just under $200. Okay. Well, $500 a month is $6,000 a year.

And times 10 years would be $60,000 that you're reducing the principal over 10 years, in addition to what you're paying early. It's not bad. I'd like for you to do a little better, because I'd like for you to get that house paid off in that 10.2 years. That would be my game plan. Certainly, if you get any other money coming in like a bonus or an inheritance or some kind of found money shows up i'm throwing that at the mortgage to

accelerate this um there's nothing here to panic about you're on a good schedule um how old are you uh 31 oh you're young okay you got plenty of time cool well here's my prediction by the time you're i think by the time you're in your early 40s, you're probably going to have worked around and paid the house off. But it's not from the 500 only. Yeah. You're going to continue to concentrate on it. You're going to throw some extra money here and there at it. You're going to get some raises that you throw at it in addition to what we're talking about.

By the time we get you up to your late 30s, you're probably paying $1,000, $1,500 a month by then from various things that are going to happen good in your life because you've been making really good decisions. Man, you are doing great. I'm so proud of you. Very well done. 31 years old, $98,000 a year. Everything's paid for but your house, putting 15% away, and you got your retirement in place. That puts you in the top 3% of americans right there dude you are on your way well done don't stop sir this is the dave ramsey show Okay, I need you to listen to this. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search that you're doing online.

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Over 34 million people worldwide have downloaded CyberGhost VPN. Download it now. Just search CyberGhost on iTunes or Google Play or go to CyberGhost.com. In the lobby of Ramsey Solutions, John and Shannon are with us, and their daughter, Julia. Welcome, guys. How are you? Hi, Dave. Dave, how are you? Good to have you. Where do you guys live?

We live in Spartanburg, South Carolina. Oh, beautiful area. Fun. Welcome to Nashville and here to do your debt-free scream. Yes, we are. Love it. How much did you pay off? We paid off $347,000.

Woo-hoo! And how long did this take? It took us about 16 months total. 16 months? Yes, sir. Wow. What is your household income range during that time? Well, this is the kicker. So we went from about $100,000 to $175,000 and then back down to about $160,000. Okay. What do you guys do for a living? So I'm a National Park Service ranger and I got a part-time gig with Keller Williams doing real estate. And I'm a first grade teacher at a Catholic school. Okay. So lots of work going on. Yes, sir. Lots of work. Very cool. So what's the $347,000 that you did in 16 months? Sure. So

it was a little bit of everything. We had a default rental property. We had a car. We had orthodonture. We had TSP loans. Furniture. So you sold the rental. We did sell the rental. What did it sell for? It sold for $278,000. Ah, okay. All right. So that's a chunk of this. That's a huge chunk. But you still had to lean into it we did so what happened 16 months ago that made you guys get so rowdy well i was having a rough time at my job i wasn't very happy and i went to john i was like i can't do this anymore can i quit and he's like okay but i think once he sat down and like crunched the numbers we We had three children in private school in that tuition, and we had the rental house in California,

and he was like, I don't know how we're going to do this. So I was kind of stressed out about it, and I was listening to the radio, one of our Christian stations in South Carolina, and an ad came on for Financial Peace University, and I thought, oh, you know what? I think I know something about that. One of my good buddies, Dr. Tommy Leong,

had given me a book, the Financial Peace book, a couple years beforehand, because we were just terrible with money. And so I heard that ad, and I thought, hmm. And then literally like two minutes later on Highway 85, I see this giant billboard with this bald-headed guy up there that says the dave ramsey show on the station that i was listening to and i said okay god i hear you i hear you so i just called and i and i um and i got the information for for the class that was

starting literally in two days wow right and so we signed up for financial peace university wow and so shannon you're like i'll go in here and do this because then i can quit my job right days. Wow. Right. And so we signed up for Financial Peace University. Wow. And so, Shannon, you're like, I'll go in here and do this because then I can quit my job, right? Yeah, I was a little skeptical. Yeah. I had been handling all the finances and walking around with a pit in my stomach. We make pretty good money, but we were living really paycheck to paycheck. Yeah, you were. I mean, he would buy a Starbucks and I would be like, what are you doing? Like there's, you know, he's like, well, there's money in the account. Well, I have to pay this bill. You know, this bill is going to hit. Um, so I was skeptical

to be honest. You put the house on the market in California. How quick did it sell? We actually didn't put the house on the market until the end, until the very end, because we had renters in there. And we were like, we don't want to mess this up while we're going through it. So we just leaned into the debt first. We had a $25,000 credit card debt that was in there, too, that was kind of a big chunk. And a car loan. I don't know if we mentioned that.

Yeah. And so we ended up selling the car. It was her car. Oh. Which was really hard to do. But we sold that, but had to pay a little bit out of pocket for that. But everything was just one right after another just was falling into place. And then finally at the end, we figured we were going to have to take a loss on the house in California.

We'd been default landlords for six and a half years. And when we put it on the market, we actually had tried to save up a little bit of money in case we had to write a check to get out from under it. And ultimately, it sold for more than what we were asking. All right. Good. Very good. Well, that's God's blessing on that. That's wonderful, man. Congratulations, you guys.

Well done. I mean, you changed it big time in 16 months. How long you two been married? 20 years next month. You ever been debt free while you were married? No. Wow. Not until now. No. Whole new world. We're changing the family tree. We got Julia right here. I'm certain she's never going to have any debt. She's already talking about how stupid it is. And she's never going to have any debt. She's already talking about how stupid it is, and she's got her own little entrepreneurial business going on. Good. Trying to change her tree as well.

Awesome. Very good. What do you tell people the key to getting out of debt is? I think, Dave, for me, the key, you know, I'm over 50 years old when we started this, and I never thought we could get out of it. I thought we're too old. We're too old to actually do this. We're just going to die with debt, and hopefully our kids won't have to take it on.

So I think the key is believing you can do it. That's really, you know, believing you can do it. That sounds cheesy, but it's exactly true. Because if you don't believe you can do it, you won't do anything. Right. You mean, why do it? You know, why go to all this trouble if it's not going to work? But when you believe and then you start doing it, it starts working.

That's powerful. That's well done. What about you, Shannon? What do you tell people? I think having a dream together and working together and having a plan and a budget and sticking that, and just really working together, I think, for us, is what made it possible. Listening to your story, it sounds like you both kind of hit the wall in different ways at about the same time.

You were both ready. So it doesn't sound like that you were, like, pushing against each other, that it kind of just synced up, and you both went together real hard on this. Is that what happened? Not really. Not really? No? Okay. No. I mean hard on this. Is that what happened? Not really. Not really? No? Okay.

No, I mean, I knew. You were dragging your heels a little. No, she was ready for a long time. I was the one. Oh, it was you. Okay. I like to buy stuff, and, you know, I have some. So what was the biggest budget fight you had during the 16 months?

I think the very first budget meeting that we did. That's hard. It was hard, because I was like, here he comes. You know, all of a sudden he's like, he jumps in and I'd been doing it all along. And so it was hard for me to give up control. And also we just we would be saying the exact same thing, but not hearing each other. So just going through that process, that first time was difficult. Pulling everything together, everybody having a vote. That's a new thing.

It's a new dance and you don't know the steps yet. And so that first budget committee meeting, you kill each other. I was like a bull in the China shop with that budget thing. Cause you know, I, after going to class, we. 20 years later, now you're fired up. Now I'm going to jump in the middle of it. But for me, the toughest part was really the tithing, you know, being convicted and understanding this is all about stewardship. That's what financial peace really did for us. And being able, while you're going through this process of trying to get out of debt, to say to yourself, well, I've got to take 10% off the top and give that back to the church.

Logically, that didn't make sense. How are we going to do this and still do that? And so that was really tough. And those conversations were tough. But as far as the fights go, I mean, I'll be honest with you, they still happen. Almost every time we talk about the budget. Wow. But they're not fights.

They're just figuring it out. It's adjustments now. It really is. It's course corrections because you're $347,000 lighter than you were 16 months ago. Amen. So that tithing thing and budgeting thing works. Amen. And, Dave,id's so nice like you know before when we first started

we had to like each paycheck we had to allocate and we had like down to the penny um and now we i don't worry like we just pay our bills at the beginning of the month and then i know i know that there's not going to be any big purchases coming through without knowing about it. And I also know for the little things, the money's there, whereas before it was not. Love it, love it. All right, it's John and Shannon and Julia, Spartanburg, South Carolina. We've got a copy of Chris Hogan's retired inspired book for you. That's the next chapter for you to be millionaires and outrageously generous.

All right, $347,000 paid off in 16 months, selling a $278,000 rental, making $100,000 to $175,000 down to $160,000. Count it down. Let's hear a debt-free scream. Here we go. Three, two, one. We're debt-free!

We're debt-free! Love it! Love it! Well well done you guys well done one of my favorite parts of this show is hearing your debt-free screams. You guys are our heroes. You've kicked debt to the curb and you've saved for the future. Now we want to celebrate with you. If you have lived like no one else and are currently in baby steps four through seven, well, it's time to enjoy some money. And the perfect place to do that is on board our first ever Live Like No One Else cruise in March. That's right. Just a couple of months away.

But get this. It's not too late to book your cabin. So don't miss your chance. This Caribbean cruise is going to be an incredible seven days at sea on a stunning new ship with amazing experiences. I'm talking all of our Ramsey personalities and other world-class entertainers. We're stopping in the Bahamas, Puerto Rico, St. Thomas, and Turks and Caicos. It's going to be an amazing, debt-free celebration designed just for you. Don't miss the boat.

Head over to RamseyCruise. We're glad you're here. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Jake is with us in Knoxville. Hi, Jake. How are you? Hey, doing good, Dave. How are you?

Better than I deserve. What's up? I feel a little bit like the prodigal son calling me right now. I did FDdu before i got married about five years ago um did it by myself it was a it was actually extra credit for the class at bible college and uh so i did the class and um i guess in my young immaturity the only thing that i actually implemented was the no credit cards. And so we've got, fast forward five years later now, we've got two kids,

we've got a mortgage, and we financed two cars. So the cars in the house are the only that we have. But I just got an inheritance check, and it honestly kind of kicked me in the teeth because I really felt like I needed to get serious, and I was like, well, I don't want to just use this as a get-out-of-jail-free card, and I want to be wise with this. And so really just trying to get your take on how I should. How old are you? I'm 27. And how long your take on how I should... How old are you? I'm 27.

And how long have you been married? Five years. Y'all had this discussion about the way you're feeling about this check? Yes, absolutely. What's she saying? She's saying we just need to pray about it and figure out what's the most wise decision. Okay, how much is the check for? $27,500.

Will that pay off everything? Not quite, but we do have $8,500 in savings, so we could take I think maybe three of that and be done with everything. Everything but the house, yeah. Okay. Yeah. Good. And then begin your emergency yeah. Okay. Yeah. Good. And then begin your emergency fund.

So who passed away? My grandfather. Okay. All right. Well, there's a couple gauges we want to do. Number one, we want to be biblically wise, which is what she was saying, and pray about this. And then number two, we want to do something with this money that your grandfather would

be sitting in heaven and see you doing this and smile. Oddly enough, these are actually the exact same things, because when you start doing smart things with money, that's going to be honoring to his memory, in other words, right? Yeah. And so paying off the debt would not make him mad as long as you had a process to never go back in. And that's what bothers you a little bit. So what I want you guys to do is I want you to go back through Financial Peace University, and I want you to park this money in a side savings account that is not attached in any way to an ATM card,

a debit card, or your checking account where you can't get to it without a trip to the bank. You have to physically go down there, make it hard to get to, and park it there for nine weeks until you go through the classes together. You've got the one-year membership. I'm going to pay for it for you to go to Financial Peace University, okay? And Financial Peace University is a one-year membership. You've got nine lessons in nine weeks. You've seen some of them.

Some of them have been redone since you saw them. And you go through those. Then when you get done with that, I think you'll know what to do. And you take that money and work the baby steps. But the problem is, as you said, the get-out-of-jail-free card, if you don't change your behaviors and have something more than just a promise to yourself you're going to straighten up, then you could really cause a problem later. And so what you want to do is prove to yourself during this nine

weeks that you have changed your behaviors and when you all are looking at each other going okay we are really doing this we're not screwing around we're not goofing off we're not gonna ish we're really gonna do it no ishing dave ish financial peace university ish wise ish we're not gonna ish it. And so that will get you into a mess. And so, you know, if I'm you, I want to prove to myself that I'm not going to goof this up. And that's what I'm telling you to do. So go to the nine classes in nine weeks and then stay.

You can watch the videos and you can go on and keep going. You can go to the Legacy Journey class online. You can get in the groups online and stay, you know, continue the discussion with the tribe and talking about it. You've got EveryDollarPlus connecting to your bank online, and that's there with you for a year. I'm giving you every bit of that. We sell all that for $129.

It's about $500 worth of stuff, though. And it's a really, really, really incredible value. And it's all it's yours. And we want you to take care of it. All we ask is, is that you follow the stuff. Both of you plug into this. And someday when you're doing really good, find a guy who feels like a prodigal and you help him out. And that's all I ask you to do. Thanks for the call. Megan is in Chicago. Hi, Megan. Welcome to the Dave Ramsey Show.

Hi, Dave. How are you? Better than I deserve. What's up? So I am a newer listener, so forgive me for my ignorance. That's okay. I am on Baby Step 2. We have our $1,000 savings, and we're currently working on our debt.

We have about $34,000, and that includes our cars. We do not have a mortgage. We currently rent. Now, my question is, we're going to have this paid off within the next two years, maybe even a year. Great. Now, we have a plan that we wanted to take our children into an RV for about two years and travel the country. However, we would have to finance to get this RV and something to tow it with. We feel like time is of the essence since our kids are getting older. So we would not like to wait if possible,

but I just wanted to see what your advice for something like this would be. It's a neat dream. I like having the dream. That's very cool. Very cool. Well, Megan, I don't tell people to borrow money because every time I find people borrowing money, I find broke people. Right. And if you borrow on something that goes down in value as fast as an RV does, I'm going to find really broke people. Have you ever tried to sell a used RV? I've seen other people sell them. Almost impossible to get rid of them. They're hard to get financing on, and they go down in value faster than almost anything

with wheels and motors. They are mathematically horrendous. They're just a mess. And so the other one is a big, a medium-sized boat. If you get a $100 million boat, you can get financing on it. And if you get a cheap bass boat, you can get financing on it. But the middle range of boats, the $50,000 to $150,000 is a difficult product. And so you just about have to have the money to just consume it and be able to afford it. So what I would tell you to do, what's your household income?

It's about $60,000. Okay. I would get myself out of debt. I'd work extra jobs. And then I would save up and pay cash for an RV that would suffice for the two-year period of time. And then if you sell it at somewhat of a loss, at least you don't have any debt on it and you don't get caught in it. It's not a problem. It doesn't ruin your life going forward because if you take a wonderful dream like you have and you finance it you're going to turn it into a nightmare right it's

going to cause a problem for your family because i mean you put 100 grand in an rv by the time you get home it's worth 50 right and you're going to be stuck and owing all that money and you know you're going to you're going to mess up your kid's college plan you're going to be stuck and owing all that money. And, you know, you're going to mess up your kid's college plan. You're going to mess up your retirement. I mean, it could be disastrous if you do this wrong. And so what I'd do is save up and buy one or look for a program where you can rent one for two years. If you can do that for two years and just turn it back in. I doubt there is one.

They're probably very, very expensive. I know you can rent them short term for the weekend, and those aren't bad deals, but a two-year plan is one. They're probably very, very expensive. I know you can rent them short-term for the weekend, and those aren't bad deals, but a two-year plan is different. And when you add all of this up, it might be that you guys could stay in your, you could travel in your car or your SUV or whatever it is you own and stay in hotels cheaper by the time you add it all up because you're going to lose so much money on this transaction and again i'm not trying to ruin your dream i just don't want your dream to be a

nightmare so do it with no debt you do it used and um and do some mathematical analysis on it and you got some nights to do that while you're working to get your other debts paid off right now and then if you want to save up 50 grand and buy a three-year-old or a two-year-old 100 grand thing or something and and then it becomes worth 25 by the time you get home i'm not gonna be mad at you for that that doesn't ruin your life but if you you just go write a check and finance something you're gonna be in a mess kiddo and i don't want that for you i want you to win hey thanks for the call well with 14 almost 15 million of you listening each week we know how valuable the stories

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to iTunes or the Google Store, but check it out, folks. We've got the Dave Ramsey Show app as well, and there's a lot of features there, and it's free. This is the Dave Ramsey Show. Hey, guys. It's Blake Thompson, senior executive producer for the Dave Ramsey Show. This hour's over, but you can find more great content on our YouTube channel. Catch the most-watched Dave Ramsey, death-free screams, and the very popular Everyday Millionaire segment. We'll see you next time.