The Ramsey Show - App - It's Time to Get Serious About Your Money (Hour 2)

Episode Date: April 16, 2020

Chris Hogan, Debt, Insurance Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Sitting in for Dave, I'm Chris Hogan, and I am excited to be with you. If you've got a question out there amidst all this COVID-19 stuff, you've got a financial question or you've got a question out there amidst all this COVID-19 stuff. You've got a financial question or you've got a business question. I want you to call us because we're here to talk to you.

The phone number to call is 888-825-5225. Again, that's 888-825-5225. I would love to be able to talk with you. And if you prefer, you can find us on social media, at Ramsey Show. You can find us on all the places, on Twitter and Facebook and even YouTube. And if you want to find me, you can search for me at ChrisHogan360. You can send me some of your questions there as well. Well, excited to talk with you.

Always have a lot going on. But I'm going to tell with you. I always have a lot going on, but I'm going to tell you something. I am more proud of the people out there that are staying zeroed in on their intent, their goals, and being resilient even as we walk through this unprecedented time because we have an opportunity to really stay focused or we can get sidetracked. And so I want to encourage you out there to continue to stay focused on the goal. I know times are tough. We're being challenged to live differently right now and go into what I've been calling conserve mode. And this is where we want to make sure that we're conserving every dollar that we have in our account and also any dollar that's coming in. We've got to change our mindset and begin to look and make sure that we're taking care of the things that are most necessary.

And listen, if you're out there and you're new, we want to welcome you and want to remind you that, again, you can find out about all things related to us here at Ramsey Solutions by going to DaveRamsey.com. Okay, well, listen, we're going to get to the phones because that's what we do around here. And first up, I've got Austin. Austin, how are you, my friend? I'm doing well, Chris.

How are you, sir? Oh, I'm focused and not finished. What's on your mind? So me and my wife, we're in baby step two. Okay. And thank God, you know, we both still have our jobs. You know, she's a teacher. I'm in the sales and the beverage industry.

So we're doing well there. Okay. The only thing is I've been running the Dave plan for about a year now. And ever since I started, got gazelle intense, just fired up about it. She has not. Uh-oh. I've been pumped. She's been panicked.

I'm wanting to pay off this debt. She's kind of wanting to hold on to the cash so that we don't light up in situations that we were before. Okay. And I've told her that Financial Peace University is free right now, and it's still not clicking. So I need some help. All right, Austin, tell me this. How much debt do you all have right now? So existing debt, not including the credit cards that are outstanding,

but we have our car loan, which is $13,000. We have per-student loans, which are approximately $30,000. And we do not have a credit card. And then of course we have the mortgage. Okay. All right. So primarily you've got a car of 13 and you've got a student loan debt of 30. Yes, sir. Okay. Now you said something that I want to dig into. You said your wife said she didn't want to be caught in the situation like you were before. What happened before? Well, I mean, we were living paycheck to paycheck. We were constantly getting, going and getting a $500 Amscot loan.

Okay. We just put ourselves in a deep hole. Okay. And when we found Dave, you Dave, we started our emergency fund, and we were more careful with the money that was coming in. And I'll take all the credit for it because I found Dave, and I've started to kind of take control over the finances. So I've put ourselves in a better situation,

but I want us to level up a little bit, and it's hard to bring her up with me. Okay. Now, listen, Austin, how long have you all been married? 11 years. 11 years. How many kids you got? Two girls.

Two girls. How old are your girls? Seven and eight. Seven and eight. You guys are busy. You know your wife better than anyone else. What is her holdup with this? Her upbringing was kind of rough.

Her father died when she was younger. Okay. So her mother raised three girls by herself. So the money was never there. Gotcha. And when she got out around, I don't want to say she was controlling over her money, but I think she was protective over it.

Yeah. So letting that go all at one time to a bigger debt, you know, doing that zero-based budget is kind of tough for her. Right. So I don't know. No, you hit the nail on the head. Yeah, no. And what's you all's household income right now?

We bring home approximately $95,000. Okay, between the two of you? Yes, sir. Okay. Austin, here's the deal. You hit the nail on the head. Based on her upbringing, money has never been stable. And so to release money to attack debt causes that scarcity mentality to creep up, which causes fear to happen. And so I'm going to tell you something. Most women, based on studies, look at money from a security standpoint. And so for her, releasing what you all have means that she doesn't feel secure. So you all, if you've been doing this by yourself, what needs to understand this process of what we're trying to do. You guys have a good income of $95,000.

You've got a car loan of $13,000 and student loan debt of $30,000. I want you to look at those payments, start to identify and help her to envision what could you all do if that debt didn't hang around anymore, if you were able to keep that. And again, I think it's more of an understanding. And so I don't want you to just take it and do it anymore. I want you to include her in this process as you guys lay out the budget. But I want you to do something. One of the things we did when I was working on my first book, Retire Inspired, was to get people to start to dream again.

We get so caught up in the day-to-day that we can forget what are we striving toward. And you've got those two daughters, seven and eight years old. I guarantee you, your wife doesn't want them to grow up with the same kind of financial stress and strain that she had growing up. So what you have right now is a great opportunity to get aligned with her, to sit down and talk with her. And I want you to hear her questions, hear her objections as well. Don't try to shoot them down, but dig a little bit deeper to find out. You've hit it on the head that her growing up was tough. Money was hard. And so what she has is real, genuine fear. And so I

think it would be really important for you to talk with her, not at her. And you guys can work through this thing. Please stay connected with us and keep us posted. This is a great opportunity right now in this time. We've got more downtime than we've ever had. We've got more opportunity now to be able to dig deeper and to get more serious about this money stuff than we ever have before. What we have to do is acknowledge it. And I want you to grab this opportunity and don't leave it to chance. This is The Dave Ramsey Show. Everyone knows we're going through challenging times, and from what I hear, a lot of you have been calling Zander Insurance with questions about your existing life insurance

or to see if plans are still available. For those who already have a policy, you've got nothing to worry about. There are no limitations related to the virus, so just keep paying your premiums. Most companies are even offering extended grace periods for those running into financial trouble. For those of you who haven't dealt with this, I'm not sure what you're waiting for. We're going to get through this, but this is a good motivation to get your family protected. Listen, rates are still low. Zander makes the process simple, and most of you have the time right now to deal with this. Call 800-356-4282 or visit zander.com. Zander is set up to serve all their clients so their needs are addressed while continuing to protect its team and the community.

That's Zander.com or 800-356-4282. Hello, everyone. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave this hour, and very excited to be with you. But I need you to know we're here to take your questions. And so we want you to give us a call. You can reach us at 888-825-5225. Again, that's Now I've been getting some questions in. I've been very active on my social media at Chris Hogan, three 60 at Instagram, and also doing some Facebook lives, but I wanted to take a minute and kind of hit a couple of questions. As you all have heard, the stimulus checks have gone out. Uh, they're starting to hit in bank accounts, but some people are saying, well, Chris, hold on. Mine isn't showing up. What happened or what do I need to do? Well, I want to let you know something.

If you haven't received your stimulus check via direct deposit, a couple of things. If you owed money on your tax return last year, you're not going to get money through a direct deposit. Ah, there's a step you have to take. You're going to have to go to the IRS Get a Payment website and enter in your banking information first. Now, hear me with this. So again, if you owed money last year, you're not going to get it via direct deposit. You've got to take steps on your own. So you would go to the IRS Get a Payment website and enter in your banking information first. And that's something that's also going to be a step that's required for someone that's maybe on Social Security and not filing taxes.

They're going to need to go and do that as well. Just wanted to give that big tip. Also, we got a question in from Facebook from Phil. Phil says, I'd like your opinion on how much life insurance I need and for how long. I'm 37 years old and make around $100,000 a year, and I'm working on a large family. Also, no debt and going to try to keep it that way. Well, Phil, number one, like the fact that you're going to stay away from debt. I would do that, absolutely. What we have told people, a couple of things. Remember, the goal of life insurance is to replace your income if something were to happen to you. That way your family has money to be able to live on, to finish paying off the

mortgage, finish funding the kid's college education, and to be able to live moving forward. So that's the goal. Life insurance says, I love you. So in reality, you being 37 years old, you're making $100,000 a year and you're debt-free, I would tell you this. We advise 10 to 12 times your annual income for life insurance, term life insurance. Now, you're making $100,000 a year, so 10 times that would be $1 million. 12 times that would be $1.2 million. Now, hear me out there, everyone. Term life insurance is completely cost effective and a lot cheaper than whole life insurance. Whole life is trying to be an investment account, a savings account, as well as insurance. I call it multiple identities, right? Multiple personalities. We need something to just be

insurance because your investments are going to grow because you're investing and being very focused. So, Phil, based on what you're telling me, $1 to $1.2 million would be what you'd want to get. However, you mentioned something else. I want to take it a step further. You said you're working on a large family. So with that, anytime you're adding kids or adopting, you want to look at increasing life insurance because you're increasing the need. So at 37 years young, young man, what I would suggest you do is you and your wife talk about how many kids you're increasing the need. So at 37 years young, young man, what I would suggest you do is you and your wife talk about how many kids you're thinking about having. If it's

three to four, I'd go ahead and bump it up by six to 800,000 just so you have it there. You're never as young as you are right now. So getting that policy, it's going to be a lot cheaper for you. So here's what I want you to do. Go to your computer. You're at home right now. Go to your computer. Go to Zander.com. Be able to look it up. Talk with them. They will guide you and to be able to give you the information that you need. Okay.

If you're out there and you've got a question, send it to us via social media. You can find us at Ramsey Show or find me at ChrisHogan360. All right. I'm going to get to the phones. I've got Leslie on the line. Leslie, how are you? Hey, I'm Chris. I'm doing well.

How about yourself? Oh, I'm focused and not finished, young lady. What's on your mind? Well, you just answered a question on Facebook about term life and home life. Well, you might not be happy about this one, but me and my husband just got a notice of default in the mail. We have a variable appreciable life policy, and they just sent us this notice and gave us a couple options. Between the both of us, they want us to pay around $10,000 to keep it to guarantee it to go against a lapse,

or the second option, we can pay a minimum required payment, which is about $1,500, and that will guarantee our death benefit, but it won't guarantee it going into lapse. And I guess my question is here, first of all, we'd love to get out of this and go into term, but right now we have no cash surrender money that we can get out of it. And both of us, our death benefit is only around $60,000. So we don't, you know, what do we do?

Do we just pay this $1,500 just to keep the death benefit going and keep the policy in effect? I just feel like I don't know what to do. I don't really understand the whole thing. Yes, ma'am. But with the funds being so low right now, could we lapse again, and will we have to pay more again? Okay. And then if it goes up, will this, you know?

So tell me this right now, Leslie. What's your all's household income right now? Well, I actually am not working currently. Okay. So with my husband's right now, we're probably at about 55. 55. Okay. And what are your ages?

We both just turned 50. Okay. All right. Here's what I'm going to advise you to do. And that is term life insurance is going to be a whole lot cheaper than this stuff you guys have right now. I'm going to advise you to get over, go to DaveRamsey.com, get on the line with Zander Insurance today, and I want you to talk with them. And looking at kind of where you all are at age 50, you know, this variable life insurance,

it's trying to do multiple things for you, and it's expensive. I mean, it's absolutely absurd. Where you guys are, what baby step are you all on? We actually, I mean, we didn't even, I mean, let me back up. We're good. Our house is paid off. We had no debt. Good.

Well, except for we have one car payment, so I guess we can't say we're not in debt. So as far as everything like that, we're good on the baby step. Okay. What would you say you guys have saved toward retirement right now? How much? I would say probably about $30,000. Okay. That's not including our 401Ks, but, of course, you know, you don't.

We both have 401Ks besides the $30,000 saved up. Okay, but what was your 401K like a month ago? How much do you have total? 401ks, IRAs, everything. Boy, you caught me off here. I would say, I know my husband's probably got about $460,000 in his. And then I'd say probably between the two of us, we've probably got about $70,000. Okay, okay.

Yeah, you definitely want to have the life insurance. But again, term life insurance. And so you guys can call Xander. You can look at something on a 10-year or 15-year term. They will work up quotes for you. You can also send them a copy of this policy and let them kind of look at this. You know, there are a lot of, and I say this just to be able to validate, there are a lot of scams that are going on right now amidst this COVID-19 epidemic, where there are people that are reaching out, trying to get information over the phone or sending mailers in as advertisements.

So I would call, speak with this company that you have the policy with, confirm the options they're laying out. But I'd also call Zander for you guys to be able to get started on getting a policy in place. With term life insurance, they're going to come, they're going to do the fluids, the blood, things of that nature, height and weight. They actually can move very quickly and get something full and in effect. That means that you not only received a quote, but you actually have coverage within four to six weeks. It can move quickly. So I would strongly advise you to get that in place. And then once you have that, then you can ignore this other stuff out there. And listen to me, everyone.

Talking about whole life, what I'm saying is it tries to do too much. Whole life insurance wants to be insurance. It wants to be a savings account. And it wants to be investing. Okay? So the increased cost, and it's expensive. But hear me. Walking through the baby costs and it's expensive, but hear me walking through the baby steps, you saving yourself, right? You have your own emergency fund. You start to invest 15% of

your household income. So you're investing for your future. You just need insurance to do what be insurance. You needed to do one job. And because it only does one job term life insurance is cheaper. It's the way to go. Remember, insurance is how you say I love you to your family. Let's make sure you love them and take care of them. This is the Dave Ramsey Show. Business leaders make your life easier with FreshBooks. Whether you're starting a business or you've been at it a long time, FreshBooks is one of the smartest decisions you'll make this year. FreshBooks is an accounting software designed for people like you

that lets you do the things like automate your invoicing and your online payments so you get more time to work on your business. Try FreshBooks for 30 days free at freshbooks.com slash Dave Ramsey. Hello everyone, you are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave this hour. And I wanted to let you know that I also have a show. The Chris Hogan Show is available on YouTube, Apple Podcasts, Google Podcasts, as well as SiriusXM. You can check it out also at my website, ChrisHogan360.com.

I've got some free tools over there for you. I've got a net worth calculator. I've got the RIQ, the retire inspired quotient to help you know how much you're going to need for retirement. But I also love the process that it takes you on and helping you connect to your dream. And so it's a matter of helping people to figure out what do I want to do later? Why am I putting money away and investing for the future? And I'm going to tell you, it's important in times like these that we stay connected to those dreams and that reminder, you know, the stock market's a living and breathing thing. And if, when things are good and people are optimistic, guess what?

It climbs. But when someone has something happens or things get negative or pessimistic or we deal with a pandemic like we are right now, well, the stock market reacts to that as well. And it'll start to decrease. The reality is that history has shown us that despite the declines, and each time in our history that we've had this, whether it's the Great Depression or dealing with 9-11 or dealing with the SARS epidemic in 02 and 03, and even the Great Recession of 07 to 09. Each time the market went down, it did, but it also came back. And so I think it's important for us to be reminded of those history lessons, but at the same time, keeping our eyes focused as well on our future. So again, you can join me on Instagram or social media at Chris Hogan 360 on my show. We talk about things like this to keep people reminded of who we are, what we stand for,

but more importantly, what we're striving for. All right, we're going to the phones. I've got Jeannie on the line. Jeannie, how are you? I'm good, Chris. How are you doing? Oh, I'm focused and not finished. How can I help you today? Well, my husband and I want to know

if we should stop our $385 a month life insurance because my husband's going to be turning 70. Should we just start putting that in our savings? Ah, okay. So, right now you all have life insurance

and how much longer does the policy last? Until my husband dies. Okay. And so how much do you all have put away for retirement right now, Janie? Well, what I wanted to know is if we should take 60 out of our savings and pay our house off. Okay. All right.

But how much would you say total a money market and we have stocks. Okay. But how much would you say total you all have toward retirement right now? I'm going to say $100,000. $100,000. Okay. So I would continue to keep the life insurance most definitely. But how much do you have over in savings account?

$60,000. Okay. And so that $60,000, where did that come from? That's from saving $1,000 a month. Okay. And do you guys have any other debt? No. Okay. Is the house paid for? Well, we have our house. Okay. You have the house. How much do you owe on it? We owe $60,000. Okay, all right. And so are you all both working right now or are you retired? We're both retired. Okay, and so how much are you all living on right now in your retirement? $3,500 a month.

$3,500 a month, okay. So here's the idea. I love the mindset of wanting to attack and pay off the house, but I'm not going to pull every dime out of your savings to do that. No. You need to have some cushion, all right, between you guys and life happening with the emergency fund. So, you know, I think you guys, in factoring in and looking at what you're doing, your bills, looking at your budget, and you should get on the EveryDollar.

Go to EveryDollar.com for an EveryDollar budget. But looking at this, you know, with you guys in your nest egg and where you are, no, I would not pull the 60 out of there to attack the house. I would get intentional with your budget and look at, hey, this is the goal of what we're trying to do. And you guys might even look at taking on some part-time jobs, each of you, and being able to throw that toward the house. So don't hear me wrong.

I love the idea of you paying it off. I don't like the idea of you throwing everything that you have toward this home. It would leave you too vulnerable if something were to happen, an illness or something like that. So the emergency fund is always going to be necessary, Jeannie. Thank you for your call. Next up, I've got Eric on the line calling from New York. Eric, how are you? How are you doing, Chris? A big fan. Oh, buddy, I appreciate you, man. How can I help you today?

Well, I have a question. Right now, I just switched jobs and I had an annuity with my own union. And right now, it's sitting in an account not doing anything and i have a couple of debts that i actually want to clear but the good thing about it is that now the job that i have now my um what they put in towards my annuity is actually triple or quadruple what my old union used to put so basically making the money back you get what i'm saying? I hear you. So I was wondering if it would be a good idea to take out the annuity that I have that's not doing anything right now, pay off my debt, and basically start off clean, and also contribute to a program every month also while I'm clean. You get what I'm saying?

I do. Okay, so how much is in this annuity right now? Right now, it's about $24,000. Okay. So you got $24,000 and initially that money was put in there for you for retirement, correct? Yes. I contributed about $5,000 to it. Okay. All right. And what debts do you have left over, Eric? I have about a $13,000 credit card and I also have an IRS bill that I'm kind of fighting with right now. Okay. So that might actually be cleared out if everything goes my way. But if it doesn't, how much is that bill right now? That's about 10. Okay. All right. Okay. And what is your income right now, your household income? $99,000 a year.

And so these are the only two debts you have right now? Yeah, I basically got rid of my car and stuff like that. I'm starting off clean. I got my wife in the program with me, so we're both going through this together, and I just, I basically just want to start over. I know. I hear you. And getting rid of the car is a big deal. That's you making sacrifices. So this $99,000 is for you and your wife both, right?

Yes. Okay. And I have three kids. How old are your kids? My oldest is 13. My youngest is 7, but it was 12. Okay. So you have three kids. How old are your kids? My oldest is 13. My youngest is 7, but it was a 12. Okay, so you got three kids. Listen to me.

I love your mindset of wanting to get out of debt. You said you got rid of the car. You knocked that out. That's fantastic. This annuity that's sitting there, I want you to reach out to a SmartVestor Pro, and let's get this thing working for you. No, I would not cash it out. Okay. No. And I know you look at it and you look at the debt. You have the 13,000 of the credit card, 10,000 potentially to the IRS. And you're doing the math and you go,

there's 24 over here and there's 23 in this debt. Well, first of all, let hear me with this pulling money out of retirement accounts right now now that daggone CARES Act, which is absurd, it removes the 10% penalty, but you still got to pay taxes on this thing over two years. So I'm advising people, don't touch your retirement account. And I don't want you to either. At $99,000 a year is your income. You guys are making a good income. And you got these two debts, two smaller debts, that I want you to continue to attack. And so that mindset. So we don't want to steal from the future, Eric, right? To be able to try to clean up the present. No. What I want you to do is to continue to budget and be very, very

focused. Be intentional. Leave that annuity alone. Let's not tap Uncle Sam on the shoulder and start no drama with that. But we do need it working for you. Right now, that money's kicked up in a hammock. It's feet's resting. It's not doing anything for you. We need it to get out of the hammock and start working. And so you grow that money, buddy. And I appreciate you listening to my show.

And I appreciate your support. But leave that money alone. Let's get focused. Get intentional in your budget. And attack this last two debts and get them out of your life. Real quick, I got a YouTube question from YouTube.com slash Dave Ramsey Show. Tate asked this, I'm relocating with the Air Force. Ah, should I sell or rent my house? Well, first of all, I want to thank you for your service to our country.

All the men and women out there in uniform, thank you for what you do. But the reality is, is you don't want to be a long distance landlord. Not at all. So I would advise you to reach out to a real estate ELP. Let's find out comparables on this house and get it on the market and get it sold. Right? You don't want to rent it and then be nine states away and not know what's happening with it. Sell it, put the money in the bank and wait to buy another house when you're sitting stillmade, well-thought-out products. Today, I'm talking about Grip6 belts. I don't know about you, but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable.

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To learn more and get this month's Dave Ramsey special, visit Grip6.com. That's Grip6.com. That's Grip6.com. Hello, everyone. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave this hour. And we've had an absolute blast. Listen, I know a lot of you out there are feeling the pressure of this COVID-19 situation. And you're thinking to yourself, what can I do? How do I begin to put myself in a position to never ever have to feel helpless or

hopeless financially again? Well, I'm going to tell you this, you're going to be okay. We're going to get through this. It's going to take focus and it's going to be us making sacrifices and being extremely intentional. But I want to let you know something. Here at Ramsey Solutions, in the middle of being isolated at home, we want you to know that we're all going to get through this. But we also want to help. So for the very first time ever, we're giving you a free trial to Financial Peace University for 14 days. That's right. You have an opportunity to be able to watch this from home.

All the premium content, the proven plan to help you with your money. You're going to get a 14-day trial of all the digital content, including all nine lessons of Financial Peace University, as well as every dollar plus budgeting app, all for free for two weeks. But hear me, it takes it a step further. Inside of this, you're also going to get a great opportunity to be able to connect with a financial coach. You're also going to have access to financial tools. And so this doesn't need to be a one and done. What I want you to do is to make this plan a part of your life. Because when you apply it, things change. What I want you to do is to make this plan a part of your life. Because when you apply it, things change.

And what we have to do is grow in our knowledge, but at the same time, take the right actions. And so this is an opportunity for you to look fear straight in the face and say, I'm going to get this done. And that we're going to be okay. Because you do have choices. And we're going to make those choices with confidence. So you can do this. You have got a great opportunity to use this time from your home right now. So all you have to do is go to Dave Ramsey.com slash hope. Hear me write this down. Dave Ramsey.com slash hope. And even if you've been through financial peace university before, listen to me. We're all chasing down dreams.

You can always get better. And we've added new content and new tools inside of there. Financial Peace is taught by Dave Ramsey, Rachel Cruz, and myself. There's a lot of content over that I want you to check out. Also, as we do things, you'll have an access to be able to hear from it first and foremost. So again, go to DaveRamsey.com slash hope. All right, I'm getting back to the phones. I've got Eddie on the line.

Eddie, how are you? I'm doing good, Chris. Thank you for taking my call. You're welcome, my friend. What's on your mind? Well, I'm 43, single, no kids. I make $120,000 secured. 43 single no kids um i make 120 000 secured and um i have i'm on baby step two i owe three thousand dollars on one credit card with five thousand dollars in the bank right now and saving okay

and i have a house that i owe 143 000 i have a truck that i owe 43 000 and000. And I was thinking of refinancing. I'm in an FHA loan for 30 years at 3.625%. And I couldn't refinance for a 15-year conventional at 2.5%. I'm thinking, should I take out money, pay off the truck, because I have plenty of equity? The house is worth about $300,000. I owe $143,000. Or should I just continue making the payments? Should I refi? Should I not? Right. All right, Eddie. Listen to000. I owe $143,000. Or should I just continue making the payments? Should I re-buy? Should I not? Right.

All right, Eddie. Listen to me. I'm proud of you because you are at the crux right now because what you're doing is you're making long-term decisions. You're starting to think about this, and you understand what's going on. So let me answer your question directly. What you're talking about is not just refinancing. You're talking about a cash out refinance because you would pay off the truck. A cash out option is going to change the loan terms and could bump up your rate. All right. So here's what I want you

to do. I'm old school, buddy. I look young, but I'm old. Listen to me. I want you to get serious about this. So I would refinance to a 15 year getting out of that FHA loan. It's also going to drop PMI private mortgage insurance, which is probably another 300 extra dollars. You're going to save yourself. So I would straight line refi. That means just, just, just the mortgage. I would get serious about paying off the truck. And here's the next step you take. You told me you've got $5,000 in the bank and you owe $3,000 on a credit card. Guess what? Don't you talk to me about percentages. Listen here. Listen, I was so proud of you there for a minute. And then you start telling me it's got zero, but I'm not worried about that. It's debt.

So I want you to take that 3000 out of the savings account today and pay off that credit card and shut that thing down. Get that thing out of your life. You can pay it off, right? You're on baby step two. Yes, absolutely. But you've got five grand in the bank. Take three to the credit card, shut it down, pay it off, close it out, and then I want you to turn your attention to dealing with this truck. And now you're making $120,000. You're single. It means you've got time and money. You can pay this truck, and now you're making $120,000, you're single, means you've got time and money, you can pay this truck off this year. I'd get intentional. I'd either sell it or I'd pay it off. And you can go to Kelly Blue Book to find out how much it's worth, but I'm telling you,

you can clean this up. But I would not do a cash out refi to be able to include the truck inside your mortgage. No, not at all. Because when you attack this truck and you either pay it off or you sell it, what happens is now you're making a stance and a step for your future. That's how you know you're never going to go backwards, my friend. That's what I would do. Next up, I've got Darren on the line. Darren, how are you, buddy? I'm doing great, Chris.

How are you? Oh, I'm focused and not finished. How can I help you? I've got a question similar to the last one about mortgage rates. Right now, I've got probably about 22 years left on a mortgage at 4%. And I'm wondering, should I refinance to a 15-year drop drop the interest rate, and get rid of PMI? Yeah, I would. I mean, have you called any of your lenders to find out what the rates are right now on a 15-year? I have not.

I've looked around a little bit on the web, and I'm looking at probably close to two and three-quarters, maybe. Yeah, that's exactly. The last time I looked the other day. That's what it was. Uh, I would do that. I really would, Darren. And I would not only refinance it down to that 15 year, cause it's going to improve your rate. You're going to, anytime I tell people, if you can improve your interest rate by 1% or more, then it's a smart thing to do. Uh, so I like you going from, you know, that 22 year mortgage you have to a 15 to be able to go from 4% down to 2% to 3 quarters. I like that mindset. So that is definitely something I would do. I'd

get on the phone with your lender today or tomorrow and begin to talk through that, gain an understanding as they send you a loan estimate to what it would look like to be able to refinance. And this is going to be a good thing. And for you, being intentional like you are, you're going to drop that private mortgage insurance again, which a lot of people don't get that. And what private mortgage insurance is, it's called PMI. It protects your lender and the bank, not you. So if you have an FHA loan that you've done here in the last several years, it'll have private mortgage insurance on there for life. I mean, that's amazing, paying an extra $150 to $300 a month for life. So you're going to do a better job and get a better rate going with a conventional loan at your lender and being able to get rid of that.

Now, private mortgage insurance can be dropped once you reach 80% loan to value. So that means the value of the home less any mortgages is at 80% or less, you can be able to drop that. You'll have to pay for an appraisal most times to be able to prove it. But again, these real estate decisions, these are the biggest decisions we make out there financially. So it's really important for us to have our mindset focused on not just buying a home, but let's get in a position to own that bad boy, right? When you don't have a payment on it, now you've got it. Well, listen, I'm going to tell you something.

It has been an absolute blast to be on the line with you all. I really want to thank all of you for tuning in. This is something, this is tough times right now. And what we have to do is remember to stay very clear, very focused on what it is we're looking to make happen. And don't back off, right? This is the time for us to get more intentional with our money than we ever have before. And so I want you to buckle down. Go into conserve mode. Let's start to look at this money and say, you know what? I'm going to protect it. I'm going to do the smart thing. And we've got to be careful these days because of this one-click shipping where we can click on buttons and boxes

show up. Listen, it's too easy. One lady told me she got smart. She unsubscribed to all the marketing emails. So she's not even getting the coupons and things. See, that's how we play defense for ourselves and remain smart. Well, listen, I want to thank all of you for tuning in. I want to thank James Child, producer, Zach Bennett, phone screener. And I want to thank all of you for staying plugged in to this, being intentional. And remember, this is your money and your future. You need to stay focused because we're not finished. This is The Dave Ramsey Show. In the middle of these uncertain times, Ramsey Solutions wants to give you some hope.

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