The Ramsey Show - App - Its Not a Money Problem, Its a Marriage Problem (Hour 1)

Episode Date: March 5, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. We appreciate you joining us.

Well, as most of you around the nation know, our city of Nashville was hit with a series of tornadoes, and the community around Nashville was hit with a series of tornadoes. Monday evening, Tuesday morning early, and there's hundreds of millions, if not billions of dollars of damage all over the place, lots of families displaced, and sadly a few people actually lost their lives in the middle of it too. Horrible, horrible situation. So a lot of you have asked from around the country,

and our team here has certainly been asking how we can mobilize some help and some assistance to those people that need help. There's certainly lots of ways you can do that. You should be aware of pop-up charities you need to work with if you're going to be donating to something, with something that is a known thing to you, or of course taking care of a family directly if you see them and you have access to them. Our Ramsey Family Foundation always gets involved in these situations, and this is no exception. And so we've been in touch with and are coordinating our efforts with Samaritan's Purse. They do a wonderful job in disaster scenarios and tragedies like this,

and very, very well-structured and run organization. And we've worked with them many times over the different years and different things that have happened to different cities and coordinated that way. And so we're doing that this time as well. There's lots of good Red Crosses out there, obviously. There's other people that you can trust, but we will be working with SamaritansPurse.org, and you can hit their site if you want.

$22 equips and sustains one volunteer for a day's worth of relief work. $400 covers the cost of a protective tarp over a damaged roof, and there's a bunch of those without a doubt. So anybody interested in volunteering can go to spvolunteer.org and be coordinated with these guys. Certainly you can volunteer a lot of different ways. If you want to make sure you're actually putting your hand to something that needs to be done and is not just random, if you coordinate it through something like this, sometimes your efforts are better done.

At Ramsey Solutions, we give our team here, not only do we give them their normal vacation and PTO time, but after you've been with us a year, you get a week extra of time off for ministry work. And so our team will be working with Samaritan's Purse crews using some of those ministry hours and days in the coming days. Lots of them are mobilizing right now, as a matter of fact, to plug into this and use their ministry time here to step out there and take care of helping folks. We had four team members lose homes out of 1,000 team members, and no one hurt, thank goodness, among our team anyway.

So anyway, SamaritansPurse.org or SPVolunteer.org if you want to volunteer, if you want to give, SamaritansPurse.org or SPVolunteer.org if you want to volunteer, if you want to give, SamaritansPurse.org. That's who we are coordinating our stuff here through. Again, there's certainly lots of valid charities and movements and churches in the area that you can work through. Your local church is always a good way to do that. But if you just always get a lot of questions about this kind of stuff, because the problem is, and it's sad that sometimes con artists pop up in the middle of these things. And you have to you have to use some wisdom with your giving. It's an emotional thing for all of us in

the community. And, you know, we want to reach out, we want to help. And you got to be wise about how you're doing that. So that you're not ineffective. You're not, you know, go buy somebody a car and yet their car insurance was getting ready to buy them a car any second because they had full coverage. And so that's an ineffective use of your giving. And so, you know, instead let's just rent them a car for a day or two till they get the other one or whatever. Let's help them out some other way, whatever it is. But you need to be wise about this process and make sure you're not ineffective and or worse yet even getting conned. And so just be real careful.

Again, Samaritan's Purse, Red Cross, your local churches, those are people you can plug into that you are going to have a good knowledge that they're effective and that you're not, you know, your money's not getting scammed and you don't look up two years later and $5 million was raised for something and you have no idea where it went. And that kind of thing does happen around here, around anywhere for that matter, around these types of situations. So thank you for joining us today. Open phones at 888-825-5225. Carol starts off the hour from California.

Hi, Carol. Welcome to The Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? My question is that we have a son and daughter-in-law who work for a religious group, and they're coaches for people overseas.

They receive their salary from supportive family and friends. They went through Financial Peace University last fall. I don't know where they are as far as their baby steps go, but a couple of weeks ago they asked us to cover non-essentials to the tune of almost $17,000 for this next year. And a big part of it is preschool for their three-year-old to the tune of $10,980, which is a lot. And that may go up. So my question is, should we be benevolent and give this money to them, or are we enabling them to live without, you know, not in their means?

Well, they're raising support for the ministry that they're in, so I don't know that it's enabling. What I would want to do, do though is i probably want to get a little bit more involved i'm not giving somebody seventeen thousand dollars until i know more what's going on um and you don't know what's going on you said that and they haven't told you they should have as a part of the request um the other thing the other thing i want to look at is um you know are some of these things that they're doing reasonable given their income? If they're living on next to nothing as a semi-missionary or in support of missionaries on raised funds,

a $10,000 preschool for a three-year-old is out of line. That's a lot. That's like rich people preschool. Yeah, yeah. And these aren't rich people These are poor missionaries We are already supporting them $750 a month Okay

And that's part of your pledge to their ministry Correct And they have basically told us That when we give them Any kind of amount of money We say you know where is this going? Well, we're adults. We don't need to share that with you.

Okay. Then we don't need to give you any money. Right. Well, that's my thinking, too. I don't give people money that act that way. Yeah. You're adults, then go raise your dadgum money, you know? Get you a job.

You're an adult. You don't need to come to me. If you're such a freaking adult, you don't ask your mommy for $17,000. Yeah. No, that's arrogant. That's arrogant. Yeah, you do what you want to do. I'm not giving arrogant people money that are my kids.

Not a chance. You come in asking me for money, you're going to open up everything, and I'm going to get real involved in advising you, friend or otherwise. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accred organization, CHM members share to pay

each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Tim is with us in North Carolina. Hi, Tim. Welcome to the Dave Ramsey Show.

Hi, Dave. Thanks for taking my call. Sure. What's up? So I have a question if I need more term life insurance. Currently, my wife's in the military. I'm a stay-at-home dad to a three-year-old, and I'm in school at the same time. We both have a $100,000 policy through the military that will end in about eight years

when she retires. Otherwise, we are very financially secure. We don't have any debt other than mortgage. Actually, we have three houses. One's paid off to our rental that we have mortgages on. We have about $250,000 in savings and retirement. And I was just wondering at this point, do we really need it? Also, we save about $3,000 a month after adding to college fund and our own retirement. Well, you're doing a great job. Congratulations. Lots of bases covered there.

Very well done. The idea of life insurance is to have a lump sum, if someone dies, that you could invest, and the income off of that investment would replace their income that you count on. Okay. Okay. And you don't have enough to do that. Okay. What does she make?

Every month she makes about $9,500. Okay. So she's making $120,000 a year. And so, you know, if you wanted to replace that at 10%, you would need $1,000,002. Okay. And so you're pretty short. Now, you've got $250,000 and you've got a couple of rental houses.

Okay. So you probably don't need a full $1,000,002 if you don't want to. How old is she? We're both 37. Okay. So you probably don't need a full million to, if you don't want to, how old is she? Oh, we're both 37. Okay. Is she in good condition? Health condition? Okay. And you know, you pick up a half a million to a million pretty inexpensively. You'd be surprised how little it costs. And then the same thing in your situation, if something happened to you, what kind of income would she need to replace? Right now, you're not creating an income. You're going to school and a stay-at-home dad, right? Correct.

And so they don't have a technical number to work off of, but she would need to replace what you are doing, which is child care, it's certain, right? And so if we want to hire Mary Poppins at $40,000 a year, we'd need $400,000 to do that. So I'd probably pick up a half a million on you or so. Okay. And then when you look up and the 401K is a million and there's zero debt anywhere, house and everything, and everybody's doing really well and your children are grown or almost grown,

then you probably don't need life insurance at that point because you don't need to raise children, number one. Right. But number two, you'd have enough assets to create the income that the person who passed away used to have. Okay. And that's when you become self-insured. So I'd probably pick up a half a million to a million on her, probably pick up a half a million on you, something like that.

Because, again, that sounds like a lot of money, but it doesn't cost much at 35 years old if you're in good shape. So check Zander Insurance, and they'll shop among a gazillion different companies and get you the best possible coverage. Hey, thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Lucy is with us in California. Hi, Lucy.

Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? I found out about a month ago my husband committed financial infidelity to the tune of $200,000, which is about what we make a year. We're going to FPU. We're on baby step two, putting the dog on Craigslist and the cat on eBay.

But I still think we don't have that unity. And I think it's coming from I don't think he's buying into the problems this has caused and where I am emotionally. Have you seen a marriage counselor? We have for other issues, and it didn't work because what I felt was happening was the counselor was being used by him to vilify me. So I feel stuck. Well, you need another counselor because you know what's happened here is you've got a breach of trust and he doesn't understand how deeply you're wounded by that breach of trust. Yep. The reason we call it financial infidelity in our world is because

it activates the same trust button that sexual infidelity activates in a different way. But I mean, it's basically you are a liar. How can I trust you again? That's the button it pushes, right? And so how does he regain that trust? Well, number one, it's going to take some time. Number two, it's going to take a lot of communication. And number three, it's going to take unbelievable consistency on his part to where he becomes worthy of trust after lying to you to the tune of $200,000. Yes.

And if he's not getting that, that is not a money problem that's a marriage problem and you need to see a marriage coach and the two of you you know call that out and deal with that okay okay and so i mean i i mean i think that's the front I would attack this battle on. In other words, I wouldn't. It's not a budgeting technique thing, okay? If you do something wrong and you feel badly for having done that wrong thing, you prove it by changing, right? Yeah. And what you saying is is he's not really doing that part of it so it makes you think he's not really sorry exactly yep that's how that's my mind now that's

how it feels and that's you know uh you know if someone says oh i'm sorry i stole your wallet and while they're reaching into your purse and stealing it again, you know, they're not sorry. They're still doing it. And so I'm sorry I got drunk, and, well, you're drunk again. You know, you weren't that sorry about it. And so, you know, that's what repentance is, what we call it in Christianity. Repentance is to turn away from doing stupid stuff, right? And he's not turned.

Did you catch him, or did he come clean i was looking at the numbers i will admit we were doing davish and numbers weren't tying up and i finally asked and he finally admitted it okay so why was he hiding it? Because he was ashamed or because he was just being deceitful? It was, I think, from a shame standpoint. Like the money was used to take care of things for the family, so it wasn't like gambling or anything like that. He just felt he was just ashamed that he wasn't in control with the money and wasn't able to give you guys everything that he thought you should have. Yes. And so he hid it and did it anyway yeah okay well that's not as bad as other options you're right but it is still a breach of trust and he still has to get that the way this has made you

feel even though he was quote doing it for you unquote right, right? Exactly. It's still lying. It's still deception. And it still requires that some effort is made over a period of time with consistency to regain trust, to be worthy of trust. Again, trust worthy. And that's the deal. So, hey, thank you for the call. Open phones at 888-825-5225 you jump in we'll talk about your life and your money this is what we do here so it is vital if you want to win with money and you're married that both of you are involved in the handling of the money. Both of you know everything that's going on.

Everything that's going on. If you think it's cute to lie to your husband and hide your Target bags under the bed, that's not cute. That's lying. And you're not only cutting the throat of your relationship, you're pretty much ensuring that your family's not going to prosper. Because all of our data points of all the families that prosper and become millionaires show that the couples in marriage situations are working together,

open communication, pulling in the same direction. It's absolutely vital. This is The Dave Ramsey Show. Thank you. In the lobby of Ramsey Solutions on the debt-free stage, Lewis and Jacinia are with us. Hey, guys, how are you? Hey, dude, how are you? Welcome. Where do you guys live? Orlando, Florida.

Wow, and up here to do a debt-free scream. Yes, we are. Welcome to Nashville. Good to have you. Thank you. How much do you pay off? All right. I'm the numbers gal, so I'm going to give you the specific details.

$359,833.55. Love it. How long did this take? Five years. Wow. And your range of income during that time? We started at $110,000 and ended right over $200,000, a little over $200,000. Cool.

What do you two do for a living? I work in finance for a large beverage company. And I'm an electrical engineer working in product development for a defense company. Cool. You're both doing real well. Thank you. Great incomes. So with the length of time and the size of this, I'm guessing you two might have paid off your house.

No. No. No. Unfortunately not. You paid off a student loan the size of a house. Yes, we did. Yes, sir. Oh, my goodness.

So what was the $360,000 in debt? So the breakdown was $337,000 was student loans. Ah. And then we had about $9,000 in a car loan, $7,000 was student loans. And then we had about $9,000 in a car loan, $7,000 in credit cards. We actually financed some furniture when we moved in together. That was almost $4,000.

And we had about $2,000 in medical debt. Wow. Okay. So you were just like normal. Yes. Normal, but with student loans on steroids. And on top of all of this, Dave, I do have to say we did have a child, and we also cash-flowed our wedding. All right. Wow.

Unbelievable. Okay, so you come out of school, you get married, and you look at this Mount Everest of student loans. Yes. Did you know it was building up? I mean, had you emotionally accepted it earlier and you were kind of ready for this or did it kind of just slam down on you? I would say it was really a moment of, oh my God, what did I do? Oh crap. Yeah, that's really the best way to say it. It was an oh crap moment and I couldn't believe that we had,

or me specifically, not just any, most of that was from me. Oh, wow. Yes. Okay, so you just got an expensive engineering degree. That's correct. But I do want to emphasize, Dave, Lewis did take out student loans for his education, but he also used it to fund his lifestyle and to also purchase a motorcycle. Oh, well, there you go.

Yes. So Lewis was living the life. Yes, he was. Living the life. Living, well, there you go. Yes. So Louis was living the life. Yes, he was. Living the life. Living the life on the student loans. Yes. And then the piper came to pay, and you got to do it. Oh.

Yes, correct. Oh, crap moment occurs. Okay. So how long had you all been dating, Jacinta, before you found out that he had this mountain of student loan debt? Well, we actually met in college. So we've been dating for 11 years. We've been married for two. Yes.

Okay. But when did you find out about the student loans? I would say when he was doing his first master's degree. Okay. So back in college, you knew about it. Yes. This guy's got Mount Everest on his shoulders. Well, it was one of those things.

We're like first-generation immigrants. Our family's from the Dominican Republic, they didn't really give us much guidance when it came to going to school. Right. It was more so, you know, take out student loans, you know, get a college degree. That's your key to be successful here in this country. Right. And then you have the rest of your life to figure out the rest. And that was sort of like the mentality we were given. And that's sort of the path we took. Yep. Well, that's not only with immigrants. That's usually first-generation college. So if your parents did not go through the college experience, they didn't know a lot of times how to guide you.

And we've been told the golden key to success is education. Whatever it costs, just buy it! Exactly. That's exactly that. That's the same message. And no guidance on, maybe you should temper this a little bit. None of that ever. No one ever says that.

Correct. But you woke up and found this mess. And then what happened? How'd you decide to attack it with us? Right. So really, Dave, what ended up happening, if I can go back a little bit, actually, when I was going to college and I was racking up all these student loans and funny enough, I didn't know, you know, what I was doing at the time. Yeah, I actually graduated not really knowing anything. So while I was having this great lifestyle in college and doing fantastic, I wasn't really studying or hitting the books.

So I came out of school from my undergrad with one hundred and twenty thousand in student loans. And so I tried to get a job in order to pay back. And literally every single piece of advice I was getting back was, Lewis, what did you learn in four years? Because I wasn't putting in the work. And so my idea was, you know what? I'll go back to school again and learn what I should learn. But, you know, not having the information,

I kind of just struggled through, you know, going back to school again. And this was in my first master's. And I, you know, obviously should know that you need your undergrad work to build on top of your master's. And so I'm in this class and I'm struggling. And I remember I had spoke to my professor and I said, hey, you know, I'm really struggling. And he said, hey, you need to go back to undergrad

and relearn what you need to know. So at that time, I actually had to sign a letter of academic probation and disqualification because I had to get a 3.0 in order to stay in the school. And by that time, I actually invested an additional $20,000 on top. So that put me about $140,000. To audit the classes you should have learned in the first year. Exactly. Wow. So what ended up happening at that point, I had a big turnaround in my life.

So I pretty much lived at school, studied for about 14, 15 hours a day, relearning my undergrad and graduate work at the same time. The party's over. Exactly. The party was over. And I relearned all that stuff and was able to graduate with a 3.0. Yeah. And finally got my first master's.

And that's when I finally had something up here. And then I went to go look for a job. And that's when I was given an opportunity in the current company that I work in. Wow. And when I was in, you know. So you went from fun Lewis to studious Lewis. Yes. That is correct.

That is correct. And so I'm in my first company, or excuse me, my current job, right? And I said to myself, you know, hey, I'm successful now. I got the engineering job. You know what I need? I need a brand new car now. Oh, yeah, of course. Of course you do.

And so I'm looking at, you know, vehicles. I'll never forget it, Dave. It was a 2014 at the time Ford Fusion Energy Titanium that I was going to buy. My manager at the time, Larry, came over and said, hey, Lewis, how are things going? And I said, hey, Larry, I want to buy this car. What do you think? He pulls me into a little breakout room and says, hey, Lewis, I'm going to take off my manager hat and I'll put on my friend hat. He said, you're just getting started. Learn how to manage the income that you have, build a foundation. And if you want that car, you know,

afterwards, go ahead and buy it. And so I'm going to go put on my manager hat back on now and get back to work. So I was like, all right, cool. So I'm walking back to my desk and I say, this guy has no idea what he's talking about. And so I'm on the computer, you know, finishing my lunch and then I'm, you know, finishing the car review. And Dave, I kid you not, the YouTube algorithm, the next video that came on was you randomly. And the video was titled, Are you entitled to a new car? I swear. And here you are ranting about, I'll never forget it, little Jose in California making $24,000 a year, getting ready to finance a $24,000

Honda Civic and tying up his whole income and you were ranting and how stupid that was and I felt like you were just ripping me to shreds and I said oh my god, that is me. But the ratios were worse. So I ran home to Yesenia right

away and I said, Yesenia, listen to this crazy guy. He's making a lot of sense. Go ahead and look up his YouTube videos. You know, we need to get started on this. And that's how you and I got connected. I love it. I love it. What a great story. Yes. The YouTube algorithm used by God. Who knew? I love it. Well done, you guys. All right. What's the secret to getting out of debt? I would have to say a budget for sure. Me working in finance, obviously, I love numbers, but a budget is definitely key. Seeing where your money is going. I would have to say having a spouse who's on board and working towards a common goal. Amen. And lastly, I would say you would have to want it.

If you don't want it bad enough, you're not going to work hard enough. You're not going to sacrifice enough. And Dave, I have to tell you, we worked our behind the box. Oh, you definitely did. We did. We had multiple side jobs. Now, did you bring your daughter with you? We did.

Okay, let's get her in the shot before we do our debt-free scream here. All right, it's Louis and Jacinta, and her name is? Amelia. Oh, hi, Amelia. All right. And we know you haveinta, and her name is? Amelia. Oh, hi, Amelia. All right. And we know you have an Amelia. We do have an Amelia. $360,000 paid off in five years, making $110,000 to $200,000.

Count it down. Let's hear a debt-free scream. Ready? Three, two, one. We're debt-free! Love it! Woo! The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The The Catherine is with us in California. Hi, Catherine. Welcome to the Dave Ramsey Show.

Hi, Dave. Thank you for having me. How are you? Better than I deserve. What's up? So my wife and I are about $48,000 in debt. And about eight months ago, we moved out of our apartment on purpose to live in our car for about six months. While doing so, we bought a bus for $1,500 and converted it into our tiny home on wheels. So we don't have to pay money. I mean, so we don't pay rent in California as it is expensive. To pay off the debt quickly, the last month we took a second job. So right now we're working about 100 hours a week until June to pay off the debt, the credit card debt and the payday loans that I stupidly took out.

I'm upside down on my car loan and a co-sign for my wife's car, which has about two and a half years left on the lease. On one of your shows, you talked about closing credit cards after they've been paid off, and I would like to do that in June, but I wanted to know if that was the best idea since I want to eventually buy investment property, such as a multifamily home, and eventually we do want to buy a house, but I wasn't sure if that was the best way to go since I did mess up our credit during that six months of living in a car. Well, the decision you've got to make is do I want to live with credit

and debt or do I want to live without it? And if you're going to live without it, then you can close up everything. Your credit score with a zero, with no accounts open and no activity on any open accounts you will have a zero credit score within a year and then you will qualify on your manual underwriting for a home mortgage uh with a steady down payment a steady job and so forth you'll be set up to win with that but um so So I believe in doing away with credit. I believe in getting out of the cycle of keeping FICO pleased.

The culture in America has worshipped at the altar of the great FICO long enough. The only way you get a FICO score is to borrow money. Why? So you can borrow money. Why? So you can borrow money. Why? So you can borrow money. Why? Sounds like a bank scam to me. And it's worked pretty well. We've got everybody walking around with their chest sticking out, all proud of themselves because they have a 700 or an 800 FICO score. And all that means is you paid bills. That's all it means. You were in debt and paid bills. It doesn't mean you have any money. Matter of fact, it means you paid hundreds of thousands of dollars in

interest. Usually if you have a 800 FICO score, you paid a lot of interest. And so it's just, it's absurd. This dog chasing its tail thing that we get into, we borrow money to run our credit up so we can borrow money so we can run our credit up so we can borrow money so we can run our credit up. And I just got out of the rat rat race i stepped out of the wheel and let the rats do their own thing i pay cash for things i do not buy investment properties unless i pay cash for them and that's what i recommend the only debt i don't yell at you for is a mortgage but i want you to get it paid off as fast as you can and you can get a mortgage with a zero credit score called manual underwriting and that's what we recommend.

Sean is with us in Tennessee. Hi, Sean. Welcome to the Dave Ramsey Show. Thank you, Dave, for taking my call. It's so great to talk to you. You too. What's up? So I am 15 years old.

I am a junior in high school, and I have a passion for aviation. My family's been involved in it and my dad was involved in it and I actually have some pretty, a lot of advantages and opportunities in the field. I can probably get my license for less than half of what the normal person does and I'm trying to figure out how to balance saving for college as well as putting money aside for investments. I wouldn't put, you're 15 years old, I wouldn't put any money aside for investments. I'd put it all in college.

Okay, so you would say just wait for college? Pay for college and pay for your licenses if you're going to go into aviation. I mean, you're having to buy instruction and hours, correct? Yes, sir. Yeah. And have you thought about the military to get all the hours where they pay you to get them? Well, I have, but to me, I don't really see that I would go into that. But according to all the advantages I have, it seemed like it would just be the easiest to just not do that.

Okay. Well, if you can pay cash for all the – I mean, the aviation world is just very – as you know, I mean, already at your young age, you already know this. It's very expensive. Even if you're buying it at half, it's a lot of money to become licensed and and uh you probably know this but when you start out as a commercial pilot you don't make anything and you spend a lot of money getting those licenses and you get paid 25 000 a year to fly regional and it's uh you don't make you don't make anything and so it's uh it's a very difficult business to get started in. Now, when you get to the top end of the business and you've got the big jets being flown by experienced pilots with years of hours under their belt,

now they make good money, seriously good money. But that's the top of the business, and it takes a long time to get there. So just be careful on this trek, sir. It's an expensive, expensive trek, and you don't make a ton of money in the early days as a pilot. So it's not like you graduate and boom, you know, you walk into $100,000 a year job. It just does not occur that way. So, hey, thanks for the call. All right, Joey is with us. Joey is in Connecticut. hi joey welcome to the dave ramsey show hey dave it's an honor to be speaking with you you too what's up so i'm 17 i'm a self-employed uh celebrity stylist i'm kind

of like the go-to fashion guy for all pro athletes uh my uh pre-tax income ranges anywhere between 8 000 a month to last month i made about 20 thousand. I'm looking to get my first car, get my license next week. I've been driving, you know, with my permit for a while now. With what I do, you know, I go to the airport a lot. So, you know, I'm very excited to get a car. You know, a lot of my clients and, you know, some of my own friends, you know, you see them driving Bentley's, Rolls Royces, all that kind of stuff. And I know that's way far out for me. But at the same time, I don't really't really you know want to be driving a 2005 honda state i kind of feel like i could get something a little better than that

um so i was just wondering uh your opinion on you know how much car i can afford how i should go about it all that kind of stuff well i wouldn't buy it unless i paid cash for it how much cash have you got i have about 58 000 in the bank you. Okay. And then the second rule of thumb is you know what cars do in value, right? Bentley's included. Yeah, I know. They go down in value rapidly. It's the largest thing that people buy that goes the wrong way. I'm a car guy.

I like cars. I've got a bunch of cars, and i enjoy a nice vehicle i really do so i can relate to you on that but you need to be able to afford to take the hit and you're just getting started you're making an unbelievably good money for your age and you've saved a bunch for your age way to go you're a rock star dude but you are not your clients yeah i know i mean you're making a hundred thousand dollars a. They're making a million dollars a year, apparently. Yeah. Okay. And so, you know, you're not your clients. You're a guy making $100,000. So you don't spend more than half your annual income, even if you're paying cash on a car.

And honestly, if you were my son and you're 17 years old, I would tell you to not spend anywhere near half. I mean, you can get a very, very nice car for $20,000. Okay. If the numbers you told me are accurate, that's a fifth of your income, and you've got the cash to pay for it. Yeah. How does that sound? That's exactly what me and my parents were looking around,

like that $20,000 to $22,000 range right there. I think if you've saved $60,000 and 000 bucks and you spend 20 of it on a car and you're making 100 120 a year yeah i'm fine with that but just always keep in mind you know these things are if you're buying things that go up in value you can stretch a little bit when you're buying things that go down in value you always want to limit that even though they're fun things even though they're toys and i like toys like i said i've got some but just if you want to become wealthy and there are people a lot of your clients possibly that make a lot of money don't have any money because they spend more than they make i mean i meet guys making them you know athletes and so forth making millions of

dollars and they spend every bit of it. And so you can always do that too, and you don't want to be that guy. So that's the trick. Don't just limit the number of dollars you spend on things going down in value. Hope that helps you. Thanks for the call. This is The Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes

or head to DaveRamsey.com. Thanks for listening.