The Ramsey Show - App - I'm New to the Plan...How Do We Pay Off Debt?

Episode Date: April 15, 2022

Dave Ramsey & George Kamel discuss: Tackling your student loans, What to do about job burnout, Navigating vehicle needs for your business. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, 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'm Dave Ramsey, your host. George Campbell is with me as my Ramsey personality, as my co-host today. We're taking your calls about your life, your money, your career, your relationships, your job, your everything in your life. Marriage, parenting, we talk about all of it right here. Open phones at 888-825-5225. Ryan is in Salt Lake City. Hey, Ryan, welcome to the Ramsey show.

Hey, Dave and George. Thanks for taking my call. Sure. What's up? So my wife and I are just about to graduate with our bachelor's degrees. My wife actually has, we'll have two at the end of April and I'll have one. Hers will be in nursing and mine will be in exercise and wellness. And I'm about to start chiropractic school in Texas. Now, my main question has to do with how to tackle the student loans of chiropractic school as they come. I've listened to a lot of your shows on YouTube, especially the ones having to do with chiropractic school. I know you don't have the highest thoughts about chiropractic school, but I am anticipating taking about $100,000 to $120,000 in student loans. And the reason that that's lower than what the average would be for chiropractic students is because I've taken about, I've received about 32,000 in academic scholarships for chiropractic school.

And my wife will have a job of about 60,000 a year as a nurse. And so those are my main questions. Okay. Also, I don't know if it matters. It doesn't matter. My savings is about 35,000. How much debt do you guys have from the schooling so far? Also, I don't know if it matters. It doesn't matter. My savings is about $35,000. Okay. How much debt do you guys have from the schooling so far?

We currently have no debt up until this first semester of chiropractic school. We took out $10,000. Okay. Why, when you had $35,000 in the bank? We wanted to keep it there as a safety blanket if when we got to texas we wanted to get a house or also keep it there if down the road once i start my business um we have it there for startup costs okay um well i disagree with your strategy. Number one, I wouldn't buy a house while you're in the middle of all this.

You're talking about going $120,000 in debt to go to school, meanwhile buy a house, and meanwhile keep $35,000 to the side to build a business later. No. No. And effectively what you're doing is you're borrowing money, not for school, but effectively you're borrowing money to keep money in your savings account and you're borrowing money to, to open your business later. You're borrowing money to butcher down payment on your house. That's effectively what you're doing. So no, if I were you, if I woke up in your shoes and I don't think you're going to do this because I

think you're going to do your plan, but, um, uh, so I'm not real sure why you called, but, um, but I, I would take the35,000 and put it towards chiropractic school. I'd be working while I was in chiropractic school. I continue to work on more scholarships, and I would, you know, your wife's going to be picking up a bunch of overtime to pay for your way through this school, and I'd come out of chiropractic school with no debt and no house. That would be my goal. Yeah, I'm hearing talk about safety and wanting to feel safe. And all of this debt is not putting you in a place of safety. It's putting you at a place of risk. And when you get out, you're going to feel broke, even as a chiropractor, even with a great income,

because you're broke, because you're making payments on $130,000 of debt at that point, while paying a mortgage payment, by the way, and property taxes and insurance costs and home maintenance costs. So now's not the time to be buying a house. I want you to get your career off the, on the right foot, pay cash for this thing. And later down the road, then we can get into a house. So if I could put two of you on two separate tracks and let's see who wins your track or the track I just outlined where you use every dime you can scrape together and you pay cash and you work your way through beans and rice rice and beans and you do anything you can do to create an income to get your way through but you don't have a house and you don't have money to start a business when you come out but you don't have any debt versus the

plan that you've got where you've got 120 000 with the debt 35 000 in the bank and you got a house which means you don't have 3535,000 in the bank anymore, and your expenses have gone up. If I can take either one of those two guys and I fast-forward them 10 years, my guy will win. You'll end up with the house and owning your business. You might have to work for someone else for a season to save up the money to start your business.

You might have to work for someone else for a season to get the house bought, but you won't have any debt hanging around your neck, and every dollar you make will be free for you to plow into your future in cash, and you cash flowed the whole thing. Ten years from today, ready, set, go, my guy will win. Reminds me of the tortoise and the hare. Classic story, but we've got to move slow here. And I think there's a lot of lies that we've believed,

especially the younger generations, that, Dave, we deserve a house. we've worked so hard to get through school and we just deserve the right or i don't even i didn't even hear entitlement in his voice i just heard he was trying to be wise he's trying to do all these smart things and he's trying to do three different things that are smart in his mind and doing them in the wrong order school house start a business and you're trying to do them all at the same time and in the wrong order and hold this money and try to make this 35 000 do all that it's not going to do all that and it's the same guy who will call five years later and say hey dave i got a chiropractic practice and i've got hundreds of thousand dollars of debt because i needed to

start it for startup costs what do i do i'm broke yeah and i don't want that for him so alex or ryan i'm sorry you you you're gonna do what you're gonna do and i got a feeling just from listening to you you're probably gonna do your plan but if i if if i could put your twin brother beside you and he worked my plan he would beat you that that i'm telling you that's how that's how the math will work out and that's how life will work out robert is with us in gilbert arizona hi. How are you? Good, Dave, George. How are you guys? Great, man. What's up? Yeah, I have a question. The question that's on the top of my mind is, and I don't know if there's such a thing like being too gazelle intense, because right now,

like I'm in baby step two and I'm trying to pay off all the debt, but I'm working from four in the morning to about 10 at night and then by the time i get home and fall asleep it's like 11 i gotta wake up by three to go to work so it's like i'm getting four hours of sleep a night like i'm constantly feeling tired my body is feeling the uh the effect of it so it's like there's such a thing as being too gazelle intense and how would i like go around this because i mean if i keep following this plan i still won't be out of debt for about another year year and a half and back your hours back your hours down dude that's untenable that's not that's not sustainable intensity is not a number of hours intensity is focus

right and so what are you making at these jobs uh so one of them i make about 70 grand the other one i make about 35 okay not bad so that that's nice and the good news is you'll be done a year a year and a half but uh i mean two hours three hours of sleep if that's really what's going on if you're not exaggerating that um that's not sustainable the human body can't do that and so i mean i've only been doing it for a month and i can already tell it's not sustainable yeah you're not you're not getting enough you're not getting enough rest you're not you're gonna have a car wreck or something you're not gonna function okay right yeah my only thing was like if i back down the hours uh you gotta back down the hours okay then then just just take on being in debt a little bit longer yeah if it costs you two months and you're alive then that's okay

but i mean you don't have to back them down you But, I mean, you don't have to back them down. You don't have to drop one of the jobs entirely. But you've got to get some more sleep. You've got to have a little bit more rest. If that's really what's going on, if you're not being a drama queen, exaggerating. Because I don't know how you did that for a month ago. That's pretty wild. But if you're really doing that, I would back that off.

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The pre-order ends soon. Get your copy of Own Your Past, Change Your Future at Ramsey Personality is my co-host. Open phones at 888-825-5225. Sarah is with us. And Sarah's in Dallas, Texas. Hi, Sarah. How are you? Hi, I'm great.

How are you doing? Better than I deserve. What's up? I want to thank you, first of all. My husband and I found you a few years ago and didn't realize how much debt we were in with student loans and everything. And in the past four years, we've paid off $160,000 of debt. And except for our house, we're completely debt-free. Way to go. Good for you. Way to go. Yeah. It's really exciting. And with home values, we have a ton of equity in our home now. So it's

great. Good, good. So we're at the point now, so we own a small business. We have a handyman at home, you know, repair home services business. For the first few years, it was my husband. Then we hired a guy. Now we've got two teams with two vehicles. Vehicles are both completely 100% paid off. But we got so busy over the last couple years, we realized we really need to hire admin people. So in the last few months, we hired, you know, one office manager.

He's doing all the invoices, all the stuff we used to do around the clock, answering phones, estimates, invoices, and one person that's handling, you know, marketing and promotions and our website and all that good stuff. Wow. Good for you. Yeah. So it's exciting and it's growth, but it's also the first time we really had overhead where like, you know, even if our aren't in the field working, like we're still paying them salary to be in the office. So it's cutting it a little closer than normal. And we have plenty of business.

We have a great reputation. We have the work, but we need to, in order to get to the next level in our business, we need to have a third team. Hire two more guys, get another vehicle. And then again, that would add about our projections would add about another 80 to a hundred thousand revenue, you know, to add another team on. But our problem lies in the vehicle. Um, right now in the short term, cars are appreciating in this weird market where like supply and demand is all wonky and cars are supposedly going up in value to where we've been searching for months for like a chevy express like a small box truck or a ford transit

and we just bought one in cash two years ago for 25 000 now they're selling for 45 or 50 000 and we don't have that much cash you know just to buy it outright the car market has gone bizarre but it is not doubled for the same exact car it did not 25 to 40 or 50 you were trying to you were trying to get a better car than the last one you bought well no they're exact same so we bought a for Transit, like a 2018, and we bought it right at the beginning of 2020. It had 15,000 miles on it. We've put 30,000 miles on it since then.

And those same exact car, if we sold it tomorrow, like on Facebook Marketplace or on CarGurus, they're selling for $43,000 to $45,000. Like with the extra miles in used condition, they're selling for more. So we're either going to get that car, or we could go up to like a Chevy Express, a little bit bigger box truck, but those are only selling for $48,000 to $50,000. So we could definitely get a smart car because we're looking for used ones. Do you have the money? We have $22,000 in our emergency fund, so not all of it.

This is not an emergency. Exactly. You can't use your emergency fund to grow your business it's not an emergency very true so you don't have the money so you don't have the money okay so you don't buy the truck you don't you don't have the crew so continue to save just can wait you need to make some money to grow your business. Your business should grow with money it makes. Yeah. So you guys don't do any retained earnings or anything like that? No savings?

Savings, like our personal account, you mean? Mm-hmm. Do you have any money saved that is not retirement accounts? Oh, just the $22,000 in our emergency fund and then the equity in our home. So you don't have the money to do this deal. You shouldn't even be talking about this. That's your personal emergency fund, or is this just for the business? I mean, it's our personal emergency fund.

Yeah. They don't have a business emergency fund. They don't have any money. You know, when it's a small business, it's like one and the same. So here's what's happening, okay? You're about to step into the classic trap that small business people do all the time. You're about to. You've gotten so excited about this, and you built it up in your head,

that you're about to step over into stupid to expand your business. Okay. And you're about to go into debt to buy a dadgum truck to add crews, and you're not even going to break even on it for two and a half years. Mm-hmm. No. Well, and the only reason we're not trying to justify it, but we would never do that with a personal vehicle. It just sits on the drive.

This is going to make us money. If we add another crew, that's $8,200,000 in revenue. So we're thinking, well, we have the revenue because we have... That is justifying it. Yeah. That's the very definition of justifying it. Okay. You're rationalizing your butt off.

And even if you work at a budget where... You're rationalizing your butt off. ...we're paying it off in like a year. You're going to do this no matter what I tell you. Please don't do it. Please, I tell you. Please don't do it. Please, I beg you. I've grown a $300 million business with cash that the business made

one year at a time for 30 years. I have not ever borrowed money. I'm sitting in a studio that costs $2 million just for the freaking studio. And I needed the studio to broadcast, but we didn't do this until we could pay cash for it and that way when the freaking pandemic hits and all revenue stops i don't go out of business because i don't have debt hanging around my neck for an overpriced truck please

don't do this okay please now here's what you do need to do. I think your prices are too low. Okay. You haven't raised your prices at all in the last three years, have you? Actually, we have. How much? We have twice. How much? It used to be, you know, like 60 an hour per guy, and then it was 80, and now it's almost 95 an hour. You're doing better than I guessed.

I was wrong. I was wrong. You're doing better than I guessed. I was wrong. I was wrong. You're doing better than I guessed. So your margin should be going up on all this paid-for stuff then, and it shouldn't be that close. It is, yeah. So what's your top line? What's your gross revenues?

It's about $240,000. Okay, and what's your net on that that you paid taxes on? $140. That's a great margin. That's a great margin. Okay, out of $140, I want you to start saving money to buy a used van to add the third crew. And when you have the money, add the third crew. But not until you have the money.

Listen, here's the thing. The businesses that stay open don't run out there on the edge of thin ice borrowing money in order to expand, expand, expand as if there's no tomorrow because there is a tomorrow and it might have a pandemic in it. And then you get yourself in a crack. And just don't do this. Don't do it. You guys, you paid off $160,000 in four years. And that tells me you're not scared of doing the hard work.

And so how quickly could you save up $40,000? If you did that, that's $40,000 a year they did it. So, you know, $40,000, $50,000 you can save in a year based on that ratio. And you can go pay cash for this van. I got to tell you, I mean, she sounds like she's done the research on the van. I'm having a real hard time believing that. But it may have happened. I may just be that much out of touch.

I am aware cars have gone up considerably on the short term here. But I was not aware. You know, maybe the construction business is completely booming out of control, too. And that's running those types of vehicles, doubling the pressure on the vans more than just normal. And I'm wondering, can you get a cheap pickup truck for now that'll do the job? Just for right now. I don't know what you need, really need, to do this. I don't have any idea, but I pay cash for whatever you're going to do.

And, you know, you do not justify this. You just worked to get out of debt, and then you called me trying to get back in debt. What did you expect me to do? And what happens is they go, well, if we got got two trucks dave then we could have 200k more because we and then it's you got eight trucks but then you got eight hundred thousand dollars in debt you know start to get starry-eyed about the potential revenues without looking at the risk there's this thing you don't know what you don't know until you're there and then you're going to learn please you're just adding so much risk and they've worked so hard to get out of this debt on their personal side.

Go back in. Well, it's all personal debt. Believe me, they're not loaning that little business any money at the bank. They're loaning that woman money. She'd be signing personally. Don't do this. Please don't do it. Please don't do it. Please don't do it. You got Dave crying now. It's a bad situation. Don't cry,

Dave. It'll be okay. No, just whining. Just whining. There's a difference. Yeah. This is The Ramsey Personality, is my co-host today. Thank you for joining us, America, in the lobby of Ramsey Solutions on the debt-free stage. Andy and Nikki are with us. Hey, guys, how are you? Good.

Yeah, doing good. Welcome. Where do you guys live? St. Louis, Missouri. All right. Well, welcome to Nashville. It's. Where do you guys live? St. Louis, Missouri. All right. Well, welcome to Nashville. It's good to have you guys. So fun.

How much debt have you paid off? We paid off $30,000. Cool. How long did that take? It took us five months. Good for you. And your range of income during that time? $110,000.

Okay, good. What do you all do for a living? I'm a teacher. And I work in human resources. For who? Manufacturing company. Good. Good for you guys.

Wow. Excellent. So what kind of debt was this $30,000? It was primarily student loans and a water filtration system for our home. Of course. Of course. I love it. All right.

Good for you guys. How long have you been married? 12 years. Okay. So what happened five months ago? You go, okay, we're not doing this anymore. We're cleaning this up. Boom.

Just like that. Yeah. Yeah. So we, in probably the first year of our marriage, somebody told us about, you know, the Dave Ramsey plan and actually let us borrow a book and everything. And I kind of like on my own I didn't read it I just went to the how do I make a budget and so I used an excel spreadsheet I made us a budget um and that was kind of it just stayed on the excel spreadsheet

and we actually did the envelope system yeah we, we did the envelopes a little bit here and there. We were not tracking all of our purchases. We weren't counting all of our receipts. And so we were loosely sticking to the budget and paying extra on our debt. We always had debt. We had student loans. We had cars. Our entire marriage, we've had debt. And so last summer. So you were pretty much ish. Yes, exactly. And ish is a wish. But I mean, I was doing it by myself. So what happened that flipped it five months ago?

I was mowing the grass, and I wanted to listen to a new podcast. And so I started searching for something new. And obviously, we knew who you were growing up in church and everything. We've heard the name Dave Ramsey. I just didn't know a whole lot about it. I found the podcast just scrolling. I started listening to these debt-free screams and just all the advice and what your future can look like if you take hold of it.

It was just very, very eye-opening and i was convinced i just became very convinced that you know we can be free of this he was like we can be millionaires yeah she didn't believe me i don't think so where's the guy that just went to cut the grass i was like we're already doing it i'm paying extra on our student loans when i can so right so and And she has been the number person. I'm not a numbers person at all. And I brought this to her. We started listening to the podcast together, decided that we were just going to do this.

We're going to get on board and start hearing all these stories of people just getting this intensity and fighting this battle basically just to knock this out. I was like, this can happen. We should be able to do this. There's no reason we can't. So did you just need that bigger why, that bigger vision of like, what are we doing? We're just looking at what's happening next week. We need to look at what could happen 10, 20 years from now.

Well, it was that, and we weren't doing as much as we could. There was no gazelle intensity. It was just like, well, do you actually hear it where we can? I want to retire. Yeah. It was the long-term vision and the intentionality yeah that got you guys fired i mean you went pretty hard at this 30k in five months making 110 i mean this is rice and beans what were you guys doing it it didn't feel that way actually you know i knew that we did have um you know when we first

got married we're combined income 30 grand you know we were on some government assistance you know we had a baby a six-week-old baby hardly any money you know um it was it was hard um we had some in savings too that we were able to pour into it because we really weren't doing the plan we had how much was in savings about 12 000 okay so 12 000 which left you 18 to knock it out in the five months. Yeah, that makes a whole lot more sense. I gotta ask, how much is a water filtration system these days? They range, they range. I think we financed about

it was 7,000, I think. Yeah, it was crazy. Oh my goodness. Those sales pitches are very convincing. They are. Wow. So you never let them into your house. But it's gone now. You got rid of it or did you just pay it out? We just paid it out. Bitches are very convincing. They are. Wow. So I never let them into your house. But it's gone now. Wow. You got rid of it or did you just paint it up?

We just painted it up. I was like, oh no. The debt's gone. We're keeping that good water. Oh man. That's right. It's important. Way to go, guys.

How's it feel? Really good. Yeah, it feels very, very freeing. You did this really fast, but very intense. Yeah. Yeah. Yeah. Yeah.

I think it was really important for me to kind of connect this to a spiritual truth, and that really gave me this oomph behind it. I really like what it says in the Psalms, that God has determined the stars and called them each by name. And I thought, you know, when we and and every single dollar and give every single dollar a name just like the name of the app that's that's what this is all about is taking every single dollar and uh the zero point budget and creating that um you know when we apply biblical principles to our practical lives you know i really feel like we reflect the image of god

amen amen it's well done it's well done. It's well done. That's what it took for me. I had to have the same exact thing because I had all the head knowledge, and I still went broke because I was doing stupid butt stuff. But I finally had to go, okay, this is God's ways of doing it, and the answer to everything else is no. That's the only answer is that way. And it was an act of faith, and that flipped it.

And I think the people that have the fastest it was an act of faith and that that flipped it and i think the people that have the fastest most dramatic turnarounds have an element of spiritual spirituality and psychology and a relational shift in their marriage as well those three things come together it just pours gas on this whole idea and you can go you go right through it and you and you and the thing about this is i don't even have to ask you this, you'll never go back. No. There's nothing.

There's nobody that can sell you anything on debt ever again. It'll never happen. You're done. But the way you described that, that's what goes with that package. So, you know, you're not going to fall off the wagon. Yeah, and we just totally agreed the whole time. I mean, I uh selling plasma i was doing some uber and on the side you know a little bit so i taught summer school for the first time in my career wow you guys got after it yeah

that's awesome we're very proud of you who was your biggest cheerleader outside the two of you yeah so definitely um my wife's parents. They're here with us today. Yay! Way to go, Mom and Dad! Yeah. And we had some other support from just people who have done it, someone from work, and her and her husband had gone through it and got debt-free, and so that was just good moral support,

friends that supported us. Very cool. Good for you guys. How's it feel now that you're free? Awesome. Very, very good. Never going back, that's for sure. Amen.

Amen. And you cash flowed those amazing T-shirts that say 321, we're debt free, too? Yes. She makes them. I made them, actually. She made them. Oh, nice. There we go.

All right. Good. This is cool. It really has enabled us to, you know, I'm going to go back to school for my master's degree, and so just to cash flow that. Yeah. It's not something I ever thought I'd be able to do. Cool.

What are you going to study? Mental health counseling. Oh, wow. Love it. Good for you. Well done, man. Well done. All right.

We've got a copy of Baby Steps Millionaires for you. That's the next chapter in your financial story for sure. You've done an incredible job, and we've got a copy of Total Money Makeover for you to give away to somebody and stir them up and get them going. You brought the kiddos with you. What are their names and ages? Let's bring them into the shot. Yes, we have Noah. He's 10, and Tenley is 6.

All right. Everybody's got the T-shirts on. Everybody's ready to rock and roll. I love it. Way to go, you guys. Andy, Nikki, Noah, and Tenley from St. Louis. $30,000 paid off in five months, making $110,000. Count it down.

Let's hear a debt-free scream. Three, two, one. We're dead free! I love it! Wow. Look at that. A lot of smiles over there. A lot of dead free faces.

That's a lot of fun. A lot of awesome t-shirts. What a pretty cool couple there. They got a bright future ahead of them. A lot of good stuff about to come their way. Going on for the Masters living the dream, man. It's amazing. And they'll be millionaires, too, before you know it. They will be. They'll hit that goal. You're right. This is the Ramsey Show. We'll be right back. George Campbell, Ramsey Personality, is my co-host today.

This is The Ramsey Show, talking about your life. We're glad you're here. David's with us in Atlanta. Hi, David. How are you? Hey, Dave. Thank you guys so much for taking my call sure what's up hey so um i'm 34 years old um i'm married i have five kids

and we're kind of in a little bit of a tough spot right now okay so uh last year we purchased a house. It was $312,000. We owe $300,000 on it right now. And so the issue is that we have a house right now that is, we have a rental property that is completely um it's completely paid off um what's it worth that house right now it's going for about 225 the rental would sell for 225 yes sir okay okay um the issue is uh right now we're we're in about 46 000 in credit card debt and we're just you know my wife and i were new to the baby steps um and we're to a point where you know like at work assuming burned out you know all the money that would that would come in would immediately leave you know and it

just kind of feels like we're leaving, like, you know, we're living paycheck to paycheck. Because you are. That's why it feels that way. Yeah. Yeah. What's your income, household? So right now, well, last year it was $85,000.

The year before that, we were around $95,000, $92,000. Okay. So about $90,000 do you think you'll do this year? I would say a safe number, maybe like $75,000 to $80,000. Okay. Are you guys doing a budget? I know you said you're new to the steps. Are you doing a monthly budget on paper and tracking it?

Yeah, so we actually just started working on one. So yes, yes, we are. Okay, you're just getting started working on one. So yes, yes we are. Okay, you're just getting started with the budget, it sounds like. Yes. Because we've got to find out where all this money is going. I mean, you guys make a decent income, and it sounds like there's nothing at the end of the month. So we've got to figure out where these money leaks are in the budget, if this is going to eating out, if this is going towards online shopping.

But we've got to batten down the hatchets here and get rid of this $46,000 in debt. We'll worry about the mortgage later on in the baby steps. Right. So, you know, I think a lot of it was eating out. You know, we were eating out just, the money was just evaporating. And so what my wife was doing was pretty much we were living off of credit cards. Yeah. And so, you know, now, you know, we find ourselves in a situation where scrambling around, you know, we're trying to pay down, you know, the debts from small and large. We're doing Instacart, Uber. Well, let me tell you what I think is happening, and it seems pretty looking at it from this side anyway.

You're 34 years old. You've got five kids. You both work. Y'all are running wide open all the time. Your lives are unbelievably busy. It's hectic. It's very hectic. And in the middle of hectic, you do two things.

One is you become disorganized, which never is an efficient use of money and two is you buy a lot of things that are time-saving things eating out as a time saver anything you can do to because you're tired you're exhausted you're frenetic you're going crazy the kids are screaming because you got little kids You haven't got five teenagers. Your house is wild. Yep. And, you know, in the middle of all of that, you're just trying to survive. And so you're not doing anything where you're telling things what to do. You're reactive instead of proactive on everything.

Yeah, pretty much. Yeah. So what's going to happen is when you go through Financial Peace University and you learn to become proactive, and doing the budget is a step of being proactive, when you put every dollar on paper, you and your wife, put those kids to bed, turn off the stupid television, book a night where you say, we're going to spend two hours on this first budget

because the first budget is really hard. And you're going to put it in the EveryDollar app so both of you can track it. And I'm going to give you a year to Ramsey Plus so you can go through Financial Peace University and run the EveryDollar premium version of the budgeting app, okay? Now, when you start making this money behave, you're getting ahead of it instead of behind it. Then when you're tired and you get ready to buy something, you have to look at the budget and see if you have the money. Right. You're going to get a raise.

It's going to feel like you got a raise when you get on a budget. Now, so here's my question. You know, being so I'm 30, you know, 34 years old, we have nothing in savings. I know. Absolutely nothing in savings. The only equity we have is, well, so the house that we just purchased, it's already gained some equity, about $40,000. And then the house that's paid off, we have, you know, another $225,000 on a conservative side. So my question is, would you guys sell that property i'm not trying

to fix the symptom i'm trying to fix the problem okay just the credit card debt is a symptom of you being out of control and disorganized well let me tell you i'm absolutely done with that i know i cut up all my credit cards like there's no way in the world I'm going back to that. So what I would tell you to do is let's get on this budget, and you two get in this class, and the two of you get a calm money rhythm as a couple where you're behaving for about 60 to 90 days before you make a real estate decision. Okay. Let's start beating on these credit cards, using the debt snowball to begin to pay them

down. You're not going to make a huge progress. But about 90 days from now, I'm going to sell the rental. But I don't want you to do it right now. Because right now, you're scrambling trying to find a way to fix this. And I don't want you to fix this because the this is you. Right. We've got to fix you.

We've got to get you guys in a rhythm and get you guys in a behavior. The rental property then can be used to clean up the credit cards when we know they're not going to grow back because now we're on a new system. We have a new way of doing things, a new life when it comes to money, a new set of principles that we operate by more than is just, I'm done with this. I'm done with this. It's a good place to start. But that's not a principle that will drive you for 10 years. Okay. So then you sell the rental, then you pay off the credit cards, and then we pay off your mortgage.

Yeah, okay. So you're saying go through Financial Peace University, then decide if we're going to go ahead and sell the rental property. Yes. I think you are going to sell it, but I wouldn't until you've done this. Because you're going to be selling it for a different emotional reason than you are today. Okay. You've been flailing around so long that right now selling the rental property is flailing.

But when it's purposeful and intentional and is a part of an overall strategy 90 days from now, it's a whole different way to sell it and a whole different place in your psyche that you're sitting when you're making that decision you're a smart guy david uh you just got you just got a lot of irons in the fire yeah i mean you're juggling flaming swords dude what we're saying is we want to see behavior change so that you have long lasting financial success and right now selling is just a shortcut and you could be back in the same rhythms that you were beforehand and so most people doing this plan dav, they'll be out of debt in 18 to 24 months. And you guys absolutely can do that just based on the numbers without even selling this rental property. And so that's what I want to see is some gazelle intensity. And obviously,

you've got five kids, man, your life is crazy. But we got to find some margin, shave some expenses, bring in some more income, and get creative and get this thing out of your life and never look back. Yeah, and then the burnout will start to go away because you're burnt out because you're a rat in a wheel. You don't feel traction. Once you start seeing some traction from your work, the work takes on more meaning. But you have to have a sense of we're going somewhere with this, not like we're just spinning out. Yeah. And that's where you're headed, dude.

You're going to do fine. Six months from now, if you'll do the stuff we're teaching you, your life is going to be completely different. Your attitude, your heart rate when you're talking about this is going to change. The tightness across the top of your shoulders is going to release. All of this is going to happen. That's why we call it financial peace. Two words that don't go together like Fauci math.

And so, you know, check it out. Ramseysolutions.com, and you can plug into Financial Peace University. We're going to plug you in, though. You hold on, and we're going to sign you up for a year's worth and get you going. Good stuff. Like my new joke, George? I like that. It's a good joke.

You've improved. I'm moving along. It's a little nicer than it used to be back during COVID. I was more nasty during COVID. Now it's soft. Now it's just... It's calm. Now it's just funny.

This is The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.