The Ramsey Show - App - I'm 23 and Debt-Free...Now What? (Hour 3)

Episode Date: December 13, 2019

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live from the headquarters of Ramsey Solutions broadcasting 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. Thanks for joining us. Merry Christmas to you, America. The phone number is 888-825-5225. That's 888-825-5225. That's 888-825-5225. Elias starts off this hour in San Antonio. Merry Christmas, Elias.

Thank you, sir. I thank you for your time as well. My question, I am a full-time realtor, and, you know, consistent commissions is always the key, but I got about $51,000 in credit card debt, and that's pretty much the gist of my debt, but I'm trying to get debt free, you know. And what do you think is the fastest track, the best way to accomplish that? Well, it's a ratio of income to debt we call it the shovel to hole ratio how big a hole you're in is your debt you told me that your income is the shovel you've got to get out of the mess right

and so obviously obviously go ahead oh i'm sorry my uh this past year has been my best year to date. I did $4 million, and that equated with after expenses and everything, about $60,000. How old are you? 33. Good for you. Okay. So you made $60,000, and you owe, did you say 50 on credit card, I mean on student loans? Student loan, it's 51, and I have one credit card with about $4,500 on it. Okay. And so you've got $55,000 in debt.

You made $60,000. So if you paid off $27,000 a year, you'd be done in two years. If you pay off, what, $18,000 a year, you'd be done in two years. If you pay off, what, $18,000 a year, you're done in three years, right? Okay. Roughly. I'm just taking 55 and dividing it by years is all I'm doing here. And so the best way to do that, obviously, is chop up the credit cards, not be going into any more debt, get on a written budget, make every dollar that you have behave so that you can throw it at the debt, and pay off your smallest debt first and then your next smallest i'm sure the student loan is not one single loan it's broken

up right uh it's two uh one subsidized the other one's unsubsidized two single loans or two groupings of loans uh it was two and then i I consolidated into one. Okay. Well, then you've got credit cards, $4,500, and then you're just going to be beating on the student loans for that two- or three-year period of time while you knock this out. And, of course, the more you make, the faster you're going to get out, right? Yes, sir. So if you doubled your income this year, you'd be out of debt in a year. That is the goal.

There you go. Hey, man, thanks for calling in chris is in los angeles hi chris welcome to the dave ramsey show hi dave i'm so excited um okay so i just recently got married and my husband and i have uh quite a lot of debt. One of the largest ones that is concerning me right now is a federal student loan that my husband co-signed for when he was 18. And the original balance was a little bit over $100,000 now. And just lately, he got a letter from a debt collection agency wanting to settle it for like $25,000. Now, we have $58,000 in debt, including this $25,000, and it's going to take us probably two years to pay everything off on an income of $72,000 take home. That works.

And I'm just worried if it's safe for us to have joint bank accounts because there's a possibility that they might garnish or levy our bank accounts and just wipe us clean in the process. If you have an agreed amount and you're paying them the agreed amount, why would they garnish your wages? Well, we haven't been making, or he hasn't been making payments. I know, but you're getting ready to cut a deal, right? Well, we don't have $25,000 saved up right now. We're just barely on baby step number two.

I got you. And we're starting off with the lowest. I got you. And that $25,000 is the last. How clean is your credit? It's probably in the $700s, but he has his credit is shot because of this. Okay. But what if you talk to a credit union about borrowing the $25,000

and just put that on payments and be done with the student loans, and then you pay the $25,000 off in the next two years by paying payments. Would that be okay? That sounds hard because the payment, I think the payments would really put us on a super tight budget, especially if we're trying to pay. I'm sorry, you have $58,000 in debt, of which $25,000 is settling $100,000, right? You're planning to pay that off in two years now, right?

$58,000 total. Including the $25,000? Yeah. And you're planning on paying both of those? You're planning on paying off $58,000 in two years, correct? Yes. So why could you not put the $25,000 on a two-year or a three-year or a five-year payment plan and pay it off in two years? Okay.

Because you're going to pay it off anyway. Yeah. Okay. That doesn't change your budget situation. It's just participating. Okay. Because you're going to pay it off anyway. Yeah. Okay. That doesn't change your budget situation. It's just participating. What we're doing here is getting them out of your life and getting rid of the threat of a lawsuit and locking in this wonderful $75,000 plus discount. Yes.

That would be very cool. So, yeah. Yes, you ought to have joint accounts. I don't think you're about to be sued. I think you're about to work your way out of this really fast. You think we'd get notification beforehand if there was a lawsuit? Yes. Yeah, you would.

Okay. And, you know, even if you didn't, if they hit your account one time, then split them. But they're not going to hit you. As long as you're messing with them and you're sending them money, big chunks of money like we're talking about, you're going to be able to work your way through this. And if you can borrow that $25 and lock this in, I surely would, as fast as I possibly

could. So, hey, good question. Thank you for joining us. Open phones at 888-825-5225. If you've just joined the Dave Ramsey Show for the first time, Merry Christmas. This is a show about common sense. How to build wealth and how real people have built wealth,

not what your broke brother-in-law's theory is. Real people build wealth by living on less than they make. By being on a budget, a written plan. That's your map to the land of wealthy. You do not visit a land that you're not in now without a map. No one randomly just shows up in Florida. You get the map out, pop it into your iPhone or whatever you're going to do, do your gps whatever it is but you're going to wander your way down through there until you land where you wanted to go it's an act of intentionality people who build wealth don't have payments and they use their most

powerful wealth building tool which is their income they get out of debt people who build wealth save for emergencies and invest long term to build wealth and change their family tree, their 401k, their Roth IRA. People who build wealth are generous. Uber generous. This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and a struggled to make ends meet, but they're starting to make headway with their budgets and smarter decisions with money.

They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance, and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is.

Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. Free samples, free shipping, great company. You can put window blinds up for the holidays do some kind of window covering these guys are the best use the promo code ramsey when you go because that's where the best deals are micah's in ohio my 100 owned llc has a cash flow negative of 250 000 this year

can i ask my church for a refund of my tithe since there were no first fruits this year? Well, you can if you want to cause your pastor to laugh out loud. That's absurd. What in the world? I mean, that can't be a serious question. Really? what in the world i mean that can't be a serious question really so if you have a cash flow negative your business is losing money you shouldn't there wouldn't be a tithe your tithe if you give a tithe a properly calculated tithe to your local church, that's just, this is just bull. This guy doesn't really, nobody does this. If you get a properly calculated tithe, if you understand what Deuteronomy says,

it says you tithe on your increase. What is your increase? Your increase is not your gross revenues. Your increase is your net profit. If you have no net profit and you have a net loss, you would not have a titheable nor a taxable income. And so thereby you would not be due a refund because you would not have paid anything in. This is just nuts. All right. Open phones at 888-825-5225.

Shane is with us in Raleigh. Hi, Shane. How are you? Good. Merry Christmas, Dave. Merry Christmas to you. How can I help? I have a question tailored towards job direction or possibly how to ask my boss for a direction.

I feel like I haven't reached the edge of what I can do, but I'm kind of trying to look for my next. It's something I'm kind of learning in the Marine Corps. You know, you're always looking for that next thing and trying to emulate that. And right now I do a lot of training and teaching for heavy equipment, and one in particular is cranes. It's kind of a hot topic now. And right now we teach it internally and it's a,

it's a federal license, kind of like a CDL license. And a lot of people are looking to have it. And I kind of want to take it instead of being an internal thing and take it public where instead of it costing us money to do it, it would, you know, we create some type of income off of it. The company itself is about 200 people, and right now I'm the only one doing the training. And I kind of want advice on how I should approach my boss about it, if it's even something that he would be interested in. Well, he may or may not.

I don't know about that. I mean, he may say, no, the only reason we're doing this is just for our people. I have no desire to get in the teaching business. Right. But you have bandwidth? You have extra time that you could teach people from the outside? Or is there room in the classroom you're already running that you could put them in there? Well, he's moved me over to this training facility, and, I mean, it's big enough. You could probably stick 100 people in there.

And really the only thing we use it for is, like, safety dinners. Or he has a huge meeting. He brings people over there to do it and it's a great facility it'd be something that could so when you when you do a training on crane operation internally how many are in the class uh about 10 okay and so there's room for another 90 yeah and a lot you want to do that man yeah? I don't know how long I want to do that. In a class that you're already doing. Right. I'm not doing it as frequently as I want to. How often do you do it?

Once every three months. Okay. But, I mean, what could you charge someone to attend this class? You could charge up to $2,000 or $3,000 a piece. Okay. um you could charge up to two or three thousand dollars a piece okay and so if you had 50 people uh extra in the class and you only charged them a thousand dollars that'd be 50 000 extra income for the company uh each time you did it if you did that four times a year it'd be 100 it'd be 200 000 extra income and it's almost all profit right yeah it would be $200,000 extra income, and it's almost all profit. Right.

Yeah, it would be, besides what he would, I guess, pay me. Yeah, if he gave you a little bonus for this great idea. But basically you're yakking in front of 10 or you're yakking in front of 60 or 80 or whatever. Right. You think you can get that many people to come in there? I believe I can get 15 to 20 in there at a time. Okay. Yeah, and if the going rate's $3,000 and you only charge two, you ought to be able to get more, right?

Yeah, if you're undercut like that, I guess you might. Well, I mean, the price I ran was only $1,000 just a minute ago. Right. But I put $50 in the room. So, you know, I just sit down and talk to him and say, I'm already doing this the room so you know i just sit down talk to him say i'm already doing this i think you can make some extra money and um you know i'll run it and help get the people in here and you can pay me some of the money but we're using your building i'm already standing up there teaching it doesn't take any more effort other than to let people know that they can come in here and give you money for this. Right, a little extra paperwork.

Yeah, you've got to certify them or whatever for the feds and the whole bit. But you're, again, already doing most of that. And as long as you don't create problems for the existing operation, which all I'm hearing is that you're not, you've got a big empty room and you're filling it up a little bit more. And, again, I wouldn't recommend teaching more until you've filled that room 100%. If you put 100 in that room every time four times a year, then we talk about raising the number of times you do it. But we're not going to teach it more until then.

But while you're already doing it make some more money and he shares some of that with you in the form of a bonus sure definitely talk to him about that steve is in michigan hey steve welcome to dave ramsey show hey dave great to talk to you you too man what's up uh well um my wife and i went to a financial advisor to buy a will or get a will, and it's called the Estate Plan Navigator. Have you ever heard of it? Nope. It consists of a last will and testament, financial power of attorney,

health care power of attorney, attorney assigned to file, cloud story and sharing, and letters of direction, all for the low, low price of $650. My question to you, is this something that is worth it? Is it something I need? What do you think? Well, you need a will for sure. You need to go to mamabearlegalforms.com and get your will going.

And it doesn't take but about 20 minutes to knock one out, a basic will, $100 or so will knock it out, all the way up to you can spend tens of thousands of dollars on a detailed estate plan if you have a lot of a big estate that's very complicated that you need to work through. So anywhere in there. So what is your net worth? I would say probably half a million. And what's your household income? I'm retired, which is I get a pension and social security for about $50,000. And my wife works full-time.

What does she make? $38,000, $39,000. And how old are you guys? I'm 63. She's 53. Okay. I mean, you can probably get a local attorney to do a will slightly cheaper than that. You know, you might save a couple hundred bucks or something. But that's not an outrageous price that I just freak out and go, oh, they're ripping you off. Right. If you told me it was $2,000 or something, I might say, what? You know, but that's really not completely out of line. Okay. what you know but um that's really not completely out of line uh and you know a lot of attorneys

will do wills from the 400 to the 600 range um and basically a an estate plan the things like you're talking about here uh you know what bothers me about the conversation though you don't trust your guy um actually my wife doesn't trust him oh that's even worse yeah i have a very virtuous wife and i'm wondering if yeah he's saying that she's saying no because of him um i think it's because of the amount of money it's not the amount of money is not wrong but she feels like he's slimy she doesn't trust him huh that's interesting because he's a pretty nice guy. I don't know. I mean, you're 63 years old. You need this set of documents done.

Everybody needs this set of documents done. It's not an unreasonable price, and you guys need to decide if you trust your guy or not because I don't think he's steering you astray. I think that's a reasonable thing. I mean, if you want to try to save a couple hundred bucks, you can. If you want to do it out on the cheap, you can, which is what people, you know, if you don't have any assets. But you guys have pretty substantial assets, so I don't see anything wrong with what you're proposing. Thank you for joining us, America. We're glad you're here.

Open phones at 888-825-5225. Scott is here from Seattle. Hi, Scott. Welcome to The Dave Ramsey Show. Yeah. Hey is here from Seattle. Hi, Scott. Welcome to the Dave Ramsey Show. Yeah. Hey, Dave. Thanks. Hey, listen, I'm 61.

We read your book. My wife and I both read it, discussed it. We have no debt on anything, no credit card debt. We live very simply. We saved and invested everything we've got. And our broker continually pushes us to move to really low-return, low-risk investments, telling us that, hey, you know, now that you're 60 or whatever, I plan to work for a few more years. And I just don't understand why I would want to shift to bonds, T-bills, and other things when actually, you know, if I plan on living for a while, I'd just as soon continue with an aggressive investment strategy.

So I just wanted to see what your thoughts were on that. I agree with you. Basically, the asset allocation model is a model that when you're young, you invest aggressively, and progressively as you get older, you invest aggressively, and progressively as you get older, you get more and more and more conservative to where by the time you reach age 65, you're pretty much in bonds, money markets, and some maybe blue chip type stocks, that kind of thing. That's the standard model that most of the financial planning community buys into.

The problem with the financial planning community is it's often a bunch of lemmings. They just follow each other and sometimes right off the cliff. So I'm a contrarian. I question everything. I'm the little boy that says why. And so my theory is simply this. By the way, I'm 58, and I will be investing what you call aggressively the rest of my life. It's not really aggressively, by the way.

Aggressively is the roulette wheel or the poker table in Vegas. Aggressively is playing single stocks. We're not doing anything with super high risk here. We're buying mutual funds that are good growth stock mutual funds with long track records, and we're riding the market. And here's why I think the asset allocation model is hooey. Like you said, you're going to keep working a while you're going to be living a while you've got enough room in your overall net worth to absorb some volatility up and down not bunches we don't want to lose

half of your net worth but i mean if you have a swing of 10 or something in one year which would be a huge weird year in the stock market. But, you know, you could have that. But here's the problem. If you're 65, statistically, the average death age of a male in the U.S. is 76, a female 78. Okay? That includes infant mortality and teenage death.

By the time you get to 65, the actuarial tables say you're living into your 90s. So you have 25 or 35 years to outpace inflation. This is like a 30-year-old investing to 65. My point, exactly. And so I am not putting money in something that's not even pacing with inflation plus taxes. Inflation plus taxes equals 6%. You've got to make 6% on your money to tread water long term and break even with a 4% inflation rate

and about 2% of your money going to taxes on your returns. And so you've got to do something aggressive enough in the long term to outpace that. So I think you're exactly right, and I think you need a new financial advisor because you're not aligned with him, and he's going to constantly think you're weird, and you're going to constantly be questioning everything else he brings up because you don't agree with him. Well, you actually triggered one other thought, if I could. Half of the money, half of the cash, in other words, non-real estate investment, is in U.S. equities. And that's split between tech, where I actually just buy stock in that company sounded like mutual funds, maybe some index funds,

things that essentially are where the fund diversifies and then you just buy by sector. I didn't hear you say that exactly, but that's what you said. No, I don't buy by sector. I don't do sector funds. I like real broad diversification because I like the safety of that. I'm not that aggressive. If you do sectors and single stocks, which is what you've done, you're more aggressive than I am because you're taking more risk.

Like, for instance, if you buy a health care fund and Obamacare continues to hammer the health care industry and it continues to take their profits and those funds take, that whole sector takes a dive, well, you're going with it. Versus if I'm in a general growth stock mutual fund, just a regular old growth stock mutual fund, whether it's an index fund or otherwise. I don't buy index funds much. I do a little bit. But in other words, if I'm just in a growth stock mutual fund, it might have some health care in it,

but it's not all in health care. And if health care goes down, auto industry might go up. You know, some of the other industries might catch the slack on it. So I like being diversified across the industries, and I don't buy single stocks because of the risk. So I'm more conservative than you are in terms of my portfolio mix. I'll reevaluate that then for sure. I like that idea. Then you think I'm fine with just sticking with U.S. equities as opposed to taking in... I keep some international in mind.

The mix I use is I use a fourth in growth, a fourth in growth and income, a little more conservative, a fourth in aggressive growth, put some spice in the gumbo, and a fourth in international. And the international category has underperformed the other three categories for the last probably decade or so. But it's overdue to catch up. And if you look back over 30, 40-year track records, you'll see it performing. So that's what I do personally, and that's what I've recommended to folks. And, you know, you can substitute out that international.

Sometimes people put a REIT in there, a real estate investment trust. Some of those have beat the S&P 500. And so you can pick out one of those that's beat the S&P and mix that in if you don't like international, give you a little real estate spice in there or something like that. But, you know, the point is that the all of that because it's equities by the financial planning world's terminology in our late 50s early 60s like you and i are would be considered very aggressive i don't consider that very aggressive

i consider playing single stocks and playing the playing the roulette wheel very aggressive um and i don't do that kind of stuff i don't like losing money and by the roulette wheel very aggressive. And I don't do that kind of stuff. I don't like losing money. And by the way, I don't lose much money. I generally just make money every year on my real estate and on my investments. Sometimes it goes down a little bit in one year, but I don't cash it out, so I don't lose money. I ride the roller coaster back up, and I don't lose money.

It's been a long, long time since I bought something i lost money on like decades because i'm just careful and conservative and i you know again spread out well diversified thanks for the call really good discussion thomas is with us in ruston louisiana hi thomas welcome to the dave ramsey show thomas three two one can you hear me yeah now i can you just barely made it sorry about that that's okay how can i help um so to give you my situation real quick i'm 23 years old uh out of college for a year now i have no debt good for you i was fortunate enough to get through college without any debt cool uh i like to say that i'm a dave ramsay baby thanks to my parents Good for you. Cool. Well, we'll just call you a financial peace baby.

That's safer. Go ahead. Very cool. Well, I'm honored. But I guess to get to my question, I'm currently doing 15% into my Roth 401K between my contributions and my employer match. And I also have some additional disposable income at the end of the month. And I was wondering what I should start doing with it.

Should I start saving up for a house? Yes. Okay. Absolutely. You have your emergency fund in place, I'm sure, right? Yes. Yeah, I'd start saving for a house. Absolutely. You have your emergency fund in place, I'm sure, right? Yes. Yeah, I'd start saving for a house. Okay.

I say the problem, I don't know if I'm going to be here where I'm at now for the long term. So should I just, I say wait, wait on buying the house and just keep saving that? Sure. Okay. The bigger the down payment, the closer you get to paying 100% for the house. That'd be pretty cool. I mean, if you save for three years or something and things change around. So what's your degree in? Finance.

What kind of money are you making? This year I should make $75,000. Way to go, dude, at 23 years old. Ding, ding. Proud of you, man. You're killing it. That's awesome. Wow, that's amazing.

This is The Dave Ramsey Show. Thank you. Our scripture today, Proverbs 16, 3, Commit to the Lord whatever you do, and He will establish your plans. Max Licato, my friend, says, Don't put limits on yourself. Not every dream will come true, and not every dream is from God. But when your dreams connect with God's plans, you'll find open doors that you never thought you'd see. Max is one of the nicest guys on the planet.

LaPortia is with us in Atlanta. Did I pronounce that correctly? Yes, you did. How can I help today? Hi, Dave. I'm a super fan of your show. I kind of just got on to it. Cool.

I'm in the middle of my total money makeover. I'm on baby step two. So far, I've paid about $3,000 to $4,000 off. Good. I'm working two full-time jobs. Wow. I recently got engaged so i'm trying to figure out how to get my fiance more on board um i kind of already told him what we're doing i said we're

not kind of doing christmas this year you may get one gift if you're lucky um and he's kind of like oh okay well i'll just kind of let you handle finances. But I know that that could be a big thing if this one person is just handling finances. Yeah, that's not a good thing because you'll end up being his mama, not his wife, doing that. You don't want to do that. You guys want to work together. You don't want to be telling him. You want him to be a man. You don't want to be telling him how to do things.

You'd be working together on stuff. You might be the one that does the numbers crunching or whatever, but he needs to be involved in the decisions with you. You ought to be doing them together. Husband and wife always. So when are you getting married? We haven't decided yet because I have so

many. I have the most debt, so I think that's probably why he's like, well this is kind of your program, not mine. Because I actually recently graduated law school and passed the bar this past October. Woo-hoo! Way to go! So how much debt have you got? With my student loan, sadly, it's about $250,000, and between my credit card debt and my car

debt, it's about an extra $25. Yeah. So have you landed the new job? Well, right now with the two full-time jobs, I'm still working at Best Buy. So that's like my 40-hour job there. And then I work as like a contract attorney doing document review 40 hours a week as well. So I do both of those right now what are you making as a contract attorney i'm making 26 an hour so with a little bit of extra hours

so are you interviewing for a good lawyer position well right now i've only been getting interviews for a public defender oh no You can't be a public defender. You have $250,000 in debt. Yeah, but I'm also interviewing for private firms as well. Yeah, you need to be making $70,000, $80,000 and get started in a regular law firm. On your way to $150,000. Because you've got to make some money, kiddo. You've got to mess.

You can't take a government position. Public defenders pay, what, 50 grand? Well, in the bigger city, it pays a little bit more. It's up between 64 and 75. But that's it. You're not going anywhere from there. If you get that with a private firm, that's just on your way to 152 years later. So you need to get in for some place where you can make some money because you got to clean this mess up.

Yeah. Yeah. As much as you can where you're working a regular law position of some kind. And yeah, as quickly as you can, by the way, we need to get that started because you need the money. Okay, cool. Well, I don't think you have to wait to get out of debt to get married. I do think the two of you need to get on the same page and that you're working together.

I'll help you with that. I'm going to pay for part of your pre-marriage counseling. Part of your pre-marriage counseling is I want you to go through Financial Peace University. If I give you that one-year membership that includes the nine lessons, the nine lessons, can you get him to go with you to the nine lessons? I can get that out of him, yes. I thought you could. All right, I'm going to pay for it.

That's your wedding gift from us, okay? All right, thank you. All right, you hold on, and I'll have Kelly pick up, and we'll get you signed up for that. Merry Christmas. And that will get you started on the right foot. But, kiddo, you've got to that. Merry Christmas. And that'll get you started on the right foot. But kiddo, you gotta go make some money. You don't have the luxury of

taking an underpaid lawyer job. Even if it sounds like it's romantic or something. Ronnie is in Atlanta. Hi Ronnie, welcome to the Dave Ramsey Show. Hi Dave, how are you? Better than I deserve. What's up in your world?

Well, first of all, thank you. Between your show and the EveryDollar app, I finally see a light at the end of the tunnel. Cool. Good for you. And I want to do something drastic to make that light a little brighter. And I wanted to get your opinion on it. All right. Right now, I have a little about $11,000 in debt left. My goal for next year is to get rid of that.

My biggest, I guess, goal monthly right now is my living. So it's about $2,000 a month by the time utilities and apartment. I actually own a 33-foot boat. And I was actually thinking of ditching the apartment and going living on the boat, which only cost me about $300 a month. And that's for docking it? You own the boat free and clear? Yeah. The boat is free and clear. It's just $300 slip rent, and normally it's $10, $15 for electricity a month. Okay. And how old are you? I'm 32.

And you're single? Single, yep. Okay. All right. And what do you make a year? I make roughly around $38,000. Okay. Well, there's certainly nothing wrong with it.

It might be colder than crap right now. But, yeah, it might be more fun in the summer uh but you know you live there for six months or something it would certainly save you some serious money and help you get some progress without a doubt i don't think you have to do that um but if it kind of sounds fun to you you're a single guy it's a little bit of an adventure just live on the lake a little while i would personally want it to be a little warmer. I love the water. I got boats.

I love being on the water. But, no, I ain't living on the water when it's cold. So, you know, you can do whatever you want. The good news is you don't have little kids or a wife or something that, you know, that you'd be dragging on this adventure with you. So you can go do whatever you want. You can live out there in the cold. You can live out there in the summer, winter.

It doesn't matter. I don't think you have to. I think you do have to get on the every dollar budget, and you do have to look at what you can do to get your income up long term and short term to be able to address some of these things. I think you're making progress. You're going to be okay. You'll be out of debt by this time next year, even if you don't do this, probably. It looks to me like you would be.

You only got $ eleven thousand dollars in debt left so i think you can make it but you know hey it's kind of cool if you want to do that there's nothing wrong with it and you do have the boat already you do have the slip rental already and all that so but again even in atlanta that's going to be a bit chilly this time of year and because i mean everything's colder on the water. You know this. I'm not giving you any information you didn't already have. But, man, something else. Jennifer follows us as part of our private Facebook group. You ought to join us on this.

It's called The Ramsey Baby Steps Community. There's one official Facebook group for us, one official one. There's a bunch of them, but we have one official one, The Ramsey Baby Steps community. How do I determine the insurance that I have on a car? In Baby Step 2, I just paid off my car. How do I determine if you keep full coverage or drop it down to liability only? The car is only worth $8,500.

You're broke, and you can't afford to buy a $10,000 car if that car gets totaled, so you need to carry full coverage. If you've got a couple hundred thousand dollars laying in your checking account because you got a lot of money and you could just go buy a car if you wrecked your car, then you can choose to not carry full coverage. I drive really, really nice cars these days, and so I still carry full coverage, even though I could afford to write a check and replace any one of them. And it wouldn't really wouldn't miss the money. But I still carry full coverage in those situations.

But you don't really have a choice in your situation. You've got to have full coverage right now. Now, you can raise your deductible up, $500 deductible, maybe $1,000 deductible. See how much that saves you versus how much premium drop do you get versus the risk you're taking, the extra deductible amount, and measure that out and decide if you want to do that. That's not a bad idea. But, no, I think you need full coverage. Hey, thank you for following us on the Ramsey Baby Steps community. We'll be back with you before you know it.

In the meantime, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know, you can listen or watch Be Anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the app store and download it today.