The Ramsey Show - App - I'm Afraid I Won't Be Able To Cash Flow School (Hour 2)

Episode Date: March 30, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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 am Dave Ramsey, your host, Anthony O'Neill, Ramsey personality, number one bestselling author, is my co-host today. Thank you for joining us. The phone number is 888-825-5225. That's 888-825-5225.

Austin is in Gainesville, Florida. Hi, Austin. How are you? Hi, Dave. I'm doing good. How are you? Hi, Dave. I'm doing good. How are you? Better than I deserve. What's up?

Yes, I've just got a quick question for you about if it would make sense for me and my fiancé to kind of swap around Baby Steps 4, 5, and 6. No. Well, right now we're in Baby Step 2. We're about to finish up next month, actually. We're 25 years old. We've been married for coming up on four months now. Congratulations. Thank you.

I appreciate it. At first, she wasn't too keen on the idea of following the baby steps and living on the ice and beans, but I got her talked into it. And like I said, we're almost done with that. And if my math is right, we should be done with baby step three in about five or six months, about the end of the year. Excellent. And right now... Your phone's breaking up, sir.

Try again. In here now? Yeah. Okay, yes, sir. Right now, we live in a double-wide mobile home on some family land uh the land is paid for we only owe about sixty nine thousand dollars a house that stands right on the mobile home yes sir oh that's sixty thousand dollars okay um it was brand new i bought it only three years ago oh lord um and. Anyways, we owe about that much on it.

I'm just kind of curious if it would make more sense for us right now, being that we don't have kids. She's in school to become a nurse practitioner. If it would make sense for her and I to go ahead and kind of pay off the house once we get done with baby step three and kind of hold off on investing for, you know, their two and a half, three years or so. Or if we should just kind of follow them as it's written and then just pay off the house once we get there. No, no, Austin. No.

Dave said in the beginning, and we both laughed, but we were both very serious. The baby steps work for a reason, man. And for me, I actually want to say I like the way you're thinking. You're like, hey, let's get 100% debt free. And I love that thought process. But I also want you to think about if you can start investing at 26 years old, man, you're setting yourself up for wealth down the road. Now, I will definitely say I would get an extra job and be investing my 15% while also going after this because that's a depreciating, and I could be wrong, but that's a depreciating

and not as fast as an actual brick home. So I would definitely be working very hard to pay it off, but I'm not going to do that at the sake of skipping over Babysit 4 and not investing at all. Okay. Here's a problem you've got. What did you pay for that? Whenever I bought it three years ago, the total I financed was $74,000. Okay. And so you'veced was $74,000. Okay.

And so you've already lost $15,000. Yes, sir. And 10 years from now, what's that mobile home worth? Probably not very much without the land, and it's family land. But the land is going to be there whether the mobile home's there or not. Yeah. You're not paying off the land. You're paying off a mobile home.

Right. So you have $60,000 in the middle of your kitchen table on fire burning. Mm-hmm. Right? Yes, sir. So I think we're going to do something else with this trailer is what I would do. I want to try to get out of it as fast as i can because it's going down not up yes sir and that's kind of i guess kind of where my uh questions

stem from um longer like i said we live we live on family land that's been in my family for for a long long time and that's where we that's where we intend to raise our family. Is it deeded to you? Yes, sir, it is. It's in your name. Yes, sir, it is. How many acres? Right now, altogether, we've got six. Good for you.

And it's kind of our dream. There's some vacant lots around us, and it's kind of our dream to be able to pay cash for those lots and then build a house on that to increase how increase how much land we have what is your household income right now we're at about 103 000 i'm a i'm a firefighter and okay and uh this this was not on your radar so it's going to be really really hard for you to swallow but i'm worried about you burning sixty thousand dollars over the next five years or ten years. And so I would want to cut this fire short if I were you.

And I don't know exactly how to do this, but I think I'm going to get that trailer sold now. I might move into an apartment and then get a construction loan and build a house. Yeah, I like that, Dave. Because every day you keep that thing, your money's going the wrong way right yes sir that's that's the problem so i just i don't i don't know what we're doing there but um that that's not that's not what you're thinking because you were thinking you're going to ride this thing all the way into the dirt and i just wouldn't burn 60 000 bucks up yeah it's too hard

to come by you've done a great job you've made a lot of progress you've got a game plan by the end of the year you're going to be in good shape and it might be that next spring uh you start trying to get this the mobile home sold and you may have to put some money with it to sell it you may end up owing more on it than it's worth yeah and um so uh uh i mean you you very well could be upside down in it. And so I'm I'm going to limit my losses by getting rid of it. And that but then you got a place to live. So I'm thinking move into an apartment and get you a construction loan and build a house on the family land because homes go up in value.

The land is an independent part of this you have a free gift of land that's wonderful but that you got that whether you put a mobile home on it or whether you put a stick built home on it that's going up in value yeah and so i just um yeah it's a problem you've got because you bought a very expensive depreciating asset. Yeah. And, Dave, I'm still new in the whole mobile home areas. Will it be more difficult to sell a mobile home? Yes. It's very difficult. Wow.

Because there's no land under it. He's not going to sell the land. Yeah, yeah. I got you. He would just be selling the mobile home. Wow. A used mobile home is hard to sell. Okay.

And if you're not a mobile home dealer, you know. I mean, so it can be done. And obviously, it's a nice one. I mean, you got a lot of money tied up in it. Right. But that's the problem I've got. So anyway, you handle it however you want, sir. I think you've made really, really good progress.

And I think that thing is going to be a boat anchor around your neck while you're trying to go swimming as you go forward because you've got this blessing of this fabulous piece of land, six nice acres there without any, and you know, if you get a house built on there and then you start saving money like crazy and one of those lots comes available, you can buy it and add on to your property and buy that with cash, you know, that could be the next 10 years of your life is just kind of building out that farm area there. Yeah. So very cool. It's a good, it's a good plan, but I don't want to wake up 10 years from now and be living

in something that's worth nothing while I watched it burn down. Yep. Yep. This is the Ramsey Show. This time last year, we didn't know how our lives were going to change. We didn't have a clue that COVID, job loss, and homeschooling were about to take over our daily existence. And you may be feeling like last year got away from you. Maybe you lost complete control of your money. Or maybe you had to find a new job quickly to make ends meet.

The bad news is a lot can happen in a year. But the good news is a lot can happen in a year. Which is why now is the time to think about where you want to be this time next year. And if you're looking for a proven plan to get back on track, our number one best-selling book, The Total Money Makeover, will walk you through the seven baby steps for getting out of debt faster, creating a budget you can stick to, building real wealth, and becoming outrageously generous.

Get your copy of The Total Money Makeover today at the online store at DaveRamsey.com or call our Ramsey concierge team at 888-22-PIECE. That's 888-227-3223. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best possible deal. So, Dave, today's question comes from Wilmer in San Diego, California.

I'm 20 years old, make $2,000 per month, and have $11,000 in savings. I live with my parents, but some friends and I want to get an apartment next year. I attend community college and will transfer to a university soon. With rent being so expensive in our area. I'm afraid I won't be able to cash flow school when I transfer. What should I do? I was rocking with you until you said I will not. I'm not sure if I will be able to cash flow school when I transfer before.

I was like, yeah, man, move out if you can pay cash for school and an apartment. But since you cannot pay cash for college and rent, then you're going to stay home. There's no shame in the game of being at home while you're going to school. Yep. None whatsoever. I'll be happy for you. And that enables you to do that without a debt-free. Yeah.

I mean, without any debt. That's just, that's job one. Yeah, yeah. And college students, just, that's job one. Yeah, yeah. And college students, Dave, they get excited for the experience, and they don't think about the cost of the experience down the road. Yeah. And so, man, experience all you can at the crib. Yeah. So, see, what happens here is that people do a switch in their minds.

Okay? So, he moves out, and then he gets student loans and he says i got student loans to go to college yeah no you didn't you got student loans for an apartment right because you could have gone to college free yes our debt free yeah while living at home yeah so you really borrowed money to be in an apartment yeah now we're talking dumb yeah well david just called me dumb because i i've done i've done dumb i've been very very vocal about all the stupid things i've done but that's you know that's what happens is we're that we're financing lifestyle very often yes sir with these things indirectly and so but we oh well education is expensive well it is expensive when you move in an apartment with a skylight, a jacuzzi, and a racquetball court.

It gets expensive then. That's exactly what happens. So, Anthony, you nailed that. Perfectly done. Open phones at 888-825-5225. Jamie is in Evansville. Hi, Jamie. Welcome to the Ramsey Show.

Hi. Thank you for taking my call. Sure. All right, so my husband and I are in Baby Steps 4, 5, and 6, and we are currently looking at refinancing our home. We currently have a 30-year VA loan at 4%. We're almost eight years into that loan. Our current loan value remaining is $200,000, and our home is worth about $300,000. And so as we're looking at our refinancing options, I've been really surprised that our current lender has given us all the data points we've asked for, and the VA 30-year loan has actually had the lowest rate and closing cost. And I hear you say all the time that the VA loan is generally one of the most expensive. It is.

So I'm calling to ask, are there other questions or is there a gotcha? Like, what should we be asking because it seems almost too good to be true? There's just something wrong in the equation because a VA loan is more expensive. The rate is slightly higher than a Fannie Mae loan. And have you got a credit problem? No, we have excellent credit. No, and so the rate we're getting is 2.75 for a 15-year conventional or a 30-year VA loan. Okay, so the same rate, but the closing cost.

Closing costs for the VA loan are $5,200, and for the 15-year, $8,200, and then a little over $10,000 for the 30-year conventional. They include the funding fee i i listen you need to get a um a second uh bid so to speak get in touch with churchill mortgage and have them run numbers for you and and and then then you can smell out what's going on here because uh the va loan when you come to the closing table is just it should be i mean it has more fees associated with it it's in order to to do the underwriting unless somehow they're piggybacking on your existing loan and not having

to hit a funding fee that may be what's happening but call churchill mortgage and talk it through with them and see if they can figure out what's happening here i'm not mad about you getting a va loan if it's the cheapest one take it yeah but Yeah. But do a 15-year fixed and take the 15-year fixed with the best rate and the best closing costs. I don't care if it's a VA loan in your case, but it just normally isn't. Right. It's just normally not as expensive. Now, the only thing I can think is somehow you're getting some credit for some of the

VA fees from your original loan, and they're moving them over to this, and so you're not getting charged as much as if you'd walked in off the street to do a VA. That's possible, and I don't know the nuances of that. But that's the only thing that comes to mind, because if you just walk in off the street to get a VA loan or FHA, you're going to find that much. So it's that easy. Hey, thank you for the call. We appreciate you joining us.

Open phones at 888-825-5225. You jump in. We'll talk about your life. We'll talk about your money. Hunter is with us in Texarkana, Texas. Hey, Hunter, how are you? Hey, Dave, how's it going? Better than I deserve.

What's up? Hey, I was calling to say I recently became debt-free, and I'm working through the baby steps. Way to go. Thank you. Thank you very much. My company offers a Roth 401k with a match. Great. My question was, should I put all 15% into the Roth 401k, or should I just do the up-to-the-company match and then put the rest into a Roth IRA?

How much is their match, real quick, Hunter? It's 4%, up to 4%. I put in 5, they put in 4. That's wonderful. Well, the non-matching portion of your Roth 401k is exactly equal to an individual Roth IRA if you're investing in exactly the same thing. So the only reason you would do an individual is if you don't have good mutual fund options or great mutual fund options, and you could get better ones on your own

because the ones in your 401k are a little weak okay yeah that's what i i met with a with an advisor a few weeks ago and he was talking to me about how he could probably build me uh kind of like an all-star portfolio whereas kind of the the company that my or the service that my company uses may be limited well that would be true because you know you've got eight or ten options to pick from your 401k and you've got 8,000 mutual funds to pick from in the open market for your individual IRA. So you should be able to find something that will perform.

Now, what you won't find, what you shouldn't be able to find is something that's substantially different. If you've got good mutual funds in your 401k and you get slightly better than good mutual funds with your individual Roth IRA, that's fine, but it's not like you're going to double your money or something. Okay. So, you know, but I mean, a lot of times in a 401k, you don't like the, you're not wild about your options. You're definitely going to take the match either way and then go to the individual and get options that I'm jumping up and down excited about with your advisor.

That's a fine way to do it. Hey, great job, though, Hunter, getting through these baby steps, man, and asking the right questions. Yeah, understanding what he's doing. Exactly. He's doing a great job of getting his arms around what's happening. I love it. These are the people that build wealth.

Yes. They ask questions. They understand. They think. He's using good critical thinking skills yes he's walked his way through the process he's gotten out of debt now he's ready to do investing and he's he's following a system hours yep that'll make him rich yeah yeah over time over time but not get rich quick not at all so dave i one of the things i'm teaching over on my show uh The Table, is max out your 401k. Once you max that out, then go over to a traditional.

And then for the younger people, max out the HSA. Are you in line with that as well? As long as you're not over 15 percent with the total. Right. Yeah. And if you're a baby step seven, you max out everything. Everything. OK.

Everything in sight because you're trying to keep the government's hands off of it. I max my HSA. I max my 401K. I do backdoor Roths. Anything I can do to keep the government's hands off of something. Right. Because by the time it gets back to me from them, there's not much left. It's a magic formula they have up there.

That's the truth. Man, oh, man. This is The Ramsey Solutions on the debt-free stage, Lee and Michelle are with us. Hey, guys, how are you? We are great. How are you, Dave and Anthony? Absolutely.

Better than we deserve. Welcome to Nashville. Where do you all live? Cartersville, Georgia. Okay. A little north of Atlanta, then. Just a little bit. Welcome all the way up here.

And up here to do a debt-free scream, how much have you paid off? $305,000. I believe it's $968,000. Excellent. Excellent job. How long it's 968. Excellent. Excellent job. How long did this take? 18 months. Good for you.

Wow. To the day. And your range of income during that 18 months? Between 190 and 210. Wow, you guys are killing it. What do you all do for a living? I'm in the insurance business with my brother. We have an insurance agency in Cartersville.

And Michelle? I'm a parish administrator with a church. Oh, great. Yeah. an insurance agency in Cartersville. And Michelle? I'm a parish administrator with a church. Oh, great. Wonderful. Well done, you guys. So what kind of debt was the 306? A little bit of everything. Mortgage. We actually had two mortgages because we are actually celebrating our two-year anniversary today, almost to the minute, with you guys. And actually, we're podcasting with y'all when we decided to do the thing but it's mortgage credit card some tax debt just a little bit of everything wow okay so you paid off your house yes i'm looking at weird people two houses two houses oh double weird with being

newlyweds when we got married i had a house he had a house. He had a house. So we sold my house, paid that one off, and used the profit from my house to do our three to six months. Right. And then threw it into the mortgage of his house. Oh, good. Yeah. Good. Okay. So we're just cleaning up.

Yes. Yeah. Yeah. Very good. Very good. Starting a new marriage the way you want to start one. Amen. We actually started on our honeymoon.

Wow. We were in Chattanooga for our honeymoon, and we stopped to get gas. I was the only one with a credit card, and we cut it up in the gas parking lot and threw it in the trash can. Were you listening to the podcast going down the road or something? Yes. Pretty much. That's exactly right. Oh, my gosh.

Then he ordered the Total Money makeovers while we were sitting there in the parking lot. By the time we got home, no, we did it a couple of days before. But by the time we got home, they were sitting in our driveway waiting for us to start them. Wow. So, yeah, it's been a lot of fun. We've had a great time. Great, great time. So just getting married and being excited about a fresh start and all that said, okay, we've got to address this money thing, and then the podcast just pops up.

Well, no, that's not true. We dated with you guys a lot. Instead of listening to music, we would listen to podcasts on our dates to and from. I really thought he was weird when he looked at me and said, you want to listen to Dave Ramsey and we're coming home from a date? That is weird. I went, who? Yeah, I love Dave, but that's real weird.

I learned to love Dave even more, though. Actually, all of you guys, I drive an hour to work every day. Oh, okay. An hour to and an hour from. Which means you're a mile from home in atlanta right yeah yeah a little too much but that's changing next week so that's a good thing but you guys really inspired me in the afternoons to go home and find more stuff to sell on ebay more stuff to put on facebook marketplace more stuff to just get rid of so you got rid of this so yeah yeah yeah wow so once we

got to 83 oh and 83 000 i said i need something visual and we did a paper chain that every chain is a thousand dollars and it hung all the way across our breakfast room and our grandkids would come in and see it and our kids would come in and see it and every thousand dollars we um paid off we cut a link and it's a new set of kitchen cabinets or it's going to italy or it's doing something that we knew that thousand dollars would help us do so when we got to that point the last one was freedom and so we have kept all these little pieces of paper and we just start pulling them out and what are we going to do because you helped us get here so thank you so much thank you thank

you so we were just under bondage with a chain yeah and that was just a really good visual for us but it was also a witnessing tool for us to to not only witness about what the lord's done in our life but also witness what your program can do for other people. I mean, we were just talking to a couple off set here just a minute ago, and they're in their 20s. It would have been nice for us to start in our 20s, but we're in our late 50s, and, you know, it's never too late. That's it.

It's never too late. Never, never, never. You guys are impressive. Very, very well done. Thank you. We have a good time. We're an ELP for you guys. Oh, okay.

But I got to tell you, I always wanted to be one, but I knew I did not want to even think about it until I got my house in order. Wow. And once I got our house in order, then I made application and went through the interview process and met some great people. Wow. And our agency is now an ELP for you. So the pnc side on the pnc side very cool yeah well i'm honored to have you as part of the team man that's incredible thanks thank you well done well done how does it feel to have not a payment in the world oh my it's like um nothing i've ever felt before truly i mean i love being married to this man because he

is my leader and he is the head of our household and he got me into this craziness but i don't know of any other way that i will want to live the rest of my life yeah so thank you so much we spent our anniversary in nashville and i told her i said baby the best part about it everything we've done while none of it was extravagant i said there's no bills waiting for us when we get home right and there's no money that we've got to send to anybody else other than just our normal power bill and things like that love it vacation vacation not gonna follow you home never never never never never never never never never no it's so good. Well done. It sounds like your life is a vacation. Much so. It is.

Each day is a breath of fresh air. It really is. To not have that load waiting on you when you put your feet on the floor and know that you're having to go to work to pay that load off is amazing. Or if the air conditioner busts on the way home, no big deal. So you had 18 very intentional, very intense months. What was the toughest part of that? You know, it really wasn't that tough. And I don't mean to say that.

I mean, it was tough. It was a lot of hard work. You didn't do a lot of things.. You didn't do a lot of things. But we did not do a lot of things. And we got a lot of people who said, well, come on, you can just do that a little bit. Or go buy yourself a new set of golf clubs. Or go do this or go do that. And I'm like, nope.

We've got other plans for that. That money's going somewhere else. And I said, I can do that later. Or she would do the same thing. The envelopes, they were my best friends and i would be at lunch with a girlfriend or we'd go shopping and i'd pull out an envelope i'd go nope it's gonna have to wait i can't get those shoes or she'd say where you want to go to lunch well let me look and i'd look and go well i got seven bucks in my meal envelope so let's figure

out where we're going to eat you know so and he handed me this i looked over there earlier and i said i love the new um wallets and i said but i wouldn't give mine i wish i had it it looks like it's just falling apart it's leather it is it's just falling apart and envelopes i'd get to the point that I didn't have any extra envelopes and I'd write all around them. You need to put that in the chain link zip bag and keep it all as a memory for the grandbabies and then go get you a nice envelope system that says Rachel Cruz

on it. She said that a minute ago. She said I really like the new ones over there. You've earned it. You've enveloped like no one else now. You can envelope like no one else. Alright, it's Lee and Michelle from the Atlanta, Georgia You've enveloped like no one else now. You can envelope like no one else. Absolutely. Yeah, yeah, yeah. All right. It's Lee and Michelle from the Atlanta, Georgia area. $306,000 paid off in 18 months, making $190,000 to $210,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo! Woo debt free! Yeah! Wow.

That's some happy newlyweds. Absolutely. Look at that. I love it. That is so fun. That is so fun. Well done. What rock stars, man.

So you're out there at the gas pump, and you're listening. Did you hear what she said? She cut up her credit cards at the gas pump. At the gas pump. Made the decision never again. And you're listening right now, and you're going, well, what about you? When are you going to do it if you're listening to us right now? What's your problem? When are you going to do it? If you're listening to us right now, what's your problem?

When are you going to do it? It's there for the taking, baby. You just got to decide. You can do it. They can do it. It's possible. This is the Ramsey Show. Thank you. When it comes to making big money or life moves, like buying a home or getting married, having a baby,

it's likely the last thing on your mind to make sure you have the right insurance coverage but it should be on your mind big changes are overwhelming what would it what would be even more overwhelming to find yourself in a situation where you didn't have the right coverage because you forgot about the insurance part of this big event if not having the time and energy is what's keeping you from getting the right insurance coverage use one of our endorsed local providers like the guy that just did his debt-free scream they're independent insurance agents who will shop among a gazillion companies free and get you the best price and they do all the work. They work for you.

All you've got to do is text insurance to 33789. Text insurance to 33789 to get connected with an ELP and let a pro help you find the coverage that fits your life. Text insurance to 33789 this is the ramsey show anthony o'neill ramsey personality is my co-host today liza's with us in orlando florida hi liza welcome to the dave ramsey art to the ramsey show what's up hi thank you for taking my call and i appreciate with all you guys do i've been starting to listen now since we've had to stay home. So it's been a little education here, but I still have a couple of questions. Okay.

And my house has paid off. Good. And I have a friend who told me, why are you paying the insurance? I mean, when have you had something catastrophic happen since you bought the home? Well, once when Hurricane Irma came and I was going to put the roof on myself, but Irma helped me along. So the insurance paid for it. So she says, you got a full roof on now. What else can happen? The fire station's about two blocks from you or either lower the replacement value. And I'm just a little bit scared about not having insurance on the house

because this is my only asset, you know, that I have that big-time money. Yeah, I think your friend's kind of dumb. Right? And she has money to back up if she had any problem with the house. I'm not that way. I've got the money to write a check and rebuild my house, but I have homeowner's insurance. insurance okay so i should just continue that because i don't even know if i can not have insurance on the house um should i level the replacement value or should i leave it the way

you know if you're going to pay for insurance pay for insurance that replaces the house if it burns okay well the fire station's two blocks away. I know. But you still have something that will still burn. I mean, the chance you're having a total loss is not there, probably, depending on what happens. But, I mean, I've been to Orlando. I was there last week. You guys have thunderstorms like we have in Tennessee. Yes. So who's to say you don't get struck by lightning?

I don't know. Oh, that's true. Yeah, because we're the capital for lightning strikes. Yeah. But I wouldn't think I would have been able to do it because I have an equity line on the house. No, they're not going to let you. I thought you said you had it paid off. Well, the house is paid off.

No, it's not. You've got an equity line on it. That's a whole different company. It's with my bank, with my checking. I know, but your house is not paid off. They have not you've got an equity line a whole different company it's with my bank with my checking i know but it's they've got your house is not paid off they have a lien on your house yeah oh so and i've been just letting that linger there because i just thought it's like like an open credit card type of thing my husband's passed away so now i'm dealing things on my own he's probably rolling on his grave listening to my conversation now oh yeah no

listen you're doing good because you're asking questions and you're learning that's always good let's leave the insurance in place and let's call the bank and cancel the equity line okay i don't think because i don't have anything hardly on it's probably about 500 or something yeah but the value of it is like 30 so yeah that's the the pre-election it's an accident looking for a place to happen is what it is. Yeah. Let's get rid of it. Absolutely. Yeah.

There are times that you can self-insure through some things that you want to. But not a house, though, right? Not a house. But, I mean, you know, like I had a $3,000 Jeep that was at the lake house. It was just a lake house Jeep. Yep. And I did not carry collision on it yeah because they wanted like five hundred dollars for collision on a three thousand dollar jeep and i'm like i'll just take the you know i'll take the risk it's a three thousand dollar jeep i can if i if the thing just explodes tomorrow

into a thousand pieces because you know whatever i hit a wall with it i don't know then then i'll just get another one it's not but because it's not a big deal but you know my nicer cars i still carry coverage on now because i've looked at it i'm going okay i've got this vehicle that's worth this yeah uh i can afford to buy one of those a month right right even though it's expensive but i mean i'm in a financial condition to do that. But I look at the value that I'm covering versus what it costs me to cover it, and I'll let them take the risk for that. It's just a value proposition for me. I see.

But technically, they're making money on me. And technically, it will cost you more money if you didn't have it insured. I mean, you would have to go drop the money. When technically, if you pay the insurance, you come out cheaper if something was to happen. Well, certainly if something happens. But that's when they don't come out. Right. And on average, you know they're going to come out.

Absolutely. So that's the deal. Yeah. But I still carry coverage on the cars, the nicer cars. Yeah. And on other things. And, of course, I carry liability on everything. Lots and lots of liability.

It's the best buy in the insurance world. And Dave is saying he carries full coverage on the nicer cars. Yeah. I want to make sure America hears that. Yeah. But, you know, if I've got a farm truck or something, I don't put a bunch of insurance on it. Right. It's not what we're doing.

That's an easy enough thing to replace. And you have full coverage on your lake house, even though it's not what we're doing it's it's a that's an easy enough thing to replace and you have full coverage on your lake house even though it's not a it's not as big as your house but it's you have full coverage on your lake house absolutely yeah understand that and they're all paid for and i can write a check and build one of those in 30 seconds if something happened to one of them but i'm gonna go ahead and let the uh let the homeowners sit in place it It's just pretty simple. And it starts to add up after a while, but it's a good buy. So good question, Liza.

Crystal is in Harrisburg, Pennsylvania. Hi, Crystal. Welcome to the Ramsey Show. Hi. Hi, guys. Hi. Good to talk to you guys. You too. I started listening to you guys probably about a month ago,

and I am the gazelle, and my husband is not. So we have two car loans. I think one is $700 and one is $8,000. Our house has been paid off for years. And I'm ready to take the money out of the savings and just pay them off. But he's like, you just don't take your capital. You just don't take your capital. You've already taken it.

When you bought the car, you took it. When you pay it off, you just admit it. I did all the numbers. I said, look how much interest we're saving and this and that. And it's just, I just can't. He has agreed that this month we're going to pay off his vehicle, and then we're going to double the payments on my car. Why would you do that?

You're using up the capital. Yeah. Well, we're taking his car payment. I know. It's not logical. Do you all have the money in the savings, Crystal, to go ahead and cut the check? Yeah, she's got the money to pay it all off today. Yeah.

How much do you have in savings? $19,000. Okay. I mean, we're set, like, it's like I'm all over the place with the baby steps. I mean, our retirement is is really good and you know i want to do the six months after you know trying to push that and everything but we have no other bills and yeah yeah i'm paying off both of the cars i don't know how to get him to do it but i would write a check today if i were in your situation and pay off everything i'd be

debt free um uh but you know, the capital's gone. You've already spent the money when you bought the car. When you pay off the loan is when you just admit what you've already done, and maybe that line of reasoning will help him get his head around that. But, I mean, if you use his principle, when you get the car paid off, you turn around and borrow on it again so that you had capital. Yeah. But borrowed money does not represent capital.

That's not proper terminology. And a simple savings account is not using your capital. So now you need to – I don't know how to talk him into it, but I think you just continue the conversation. Tell him what it will mean to you, how it's going to make you feel a lot better. Big gift to you for him to do that. Maybe that'll help. I don't know. Good luck with that.

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