The Ramsey Show - App - Keep Your Christmas Budget in Check By Saving Now (Hour 2)

Episode Date: October 9, 2018

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🎵 Live from the headquarters of Ramsey Solutions, 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. Brian is with us in Kansas City. Hey, Brian, how are you? Pretty good, Dave, you? Better than I deserve. What's up? So I've been listening to you for years, and thankfully I did because I'm in a good situation. But I recently lost my job.

I just wanted to ask your advice on maybe what I should do with the money I have saved up and what's the best thing for me. What were you making? About $275. Whoa! What do you do for a living? I was in sales. I sold luxury RVs. Okay. And why'd you lose the job? New management came in, and he just didn't think I was the right guy for his team.

You're making $275,000 in commissions? Yes. Jeez. I'm thinking I'm going to work that out. Okay. Anyway, so how much have you got saved? I got about $130,000 in cash, and then my 401Ks got about $66,000. I've been doing it for about five years. I've been maxing it out each year.

And then I own two rental properties, free and clear. About your house? I own my house. I have about $298 298 on my house are you married yes okay does she work outside the home she does she works she makes about 60 okay all right cool how long have you been selling rvs i've been in the industry for 20 years i was a mechanic how long have you been making over $200? Five years. Okay. I'd say probably three and a half, making over $200.

Okay, cool. What do you attribute that wonderful income to? Customer service. Okay. Hard work. If you've been around the business for 20 years, it's also product knowledge, isn't it? No, absolutely. Yeah, that's my biggest thing because I know how to work on them.

So my customers love the fact that I could talk them through their issues. And motorhomes have tons of issues. So they just love that service that I would give them, you know. And then they would tell their friends. Absolutely. Yeah. Okay. Is there a competing line across town?

No, because of the high-end stuff. You have to move my whole family, and I just, we love the Midwest and Kansas City, and I just, I don't think I want to make that move yet. You know, I definitely could move to a different place. I don't have a problem with that. But I'm saying, is there a competing, is there another brand that was your main competitor that's in that town across town? No. I mean, you'd have to go to a larger city for sure to get a competitor.

Okay. Like Dallas or Florida or California. This guy has a lock on the luxury RV market in your town. Correct. Yep. Okay. All right. All right. Well, there's two things that come to mind. This guy has a lock on the luxury RV market in your town. Correct. Yep. Okay. All right.

All right. Well, there's two things that come to mind. One is, well, we don't do anything with money. You've got $130,000. You sit on it. You use as little of it as possible. You trim down your budget and live on as little as possible. You don't touch your 401K. I don't even want you to touch the $130,000 that's cash if we can keep from it.

You know, you're in really, really good shape financially, so you ought to be able to coast as long as you need to. The trick is I don't want you to settle for something making $60,000 when you've made $260,000.

Because you've proven you're worth that over more than a fluke. You did it over a long period of time. So we know that you have two unbelievable world-class skills. One is you have an in-depth knowledge of luxury motorhomes and how they work and what makes them tick and how you can help somebody in a situation and so on there. That is a very narrow set of skills. and what makes them tick, and how you can help somebody in a situation, and so on there. Okay?

That is a very narrow set of skills. It really has only one application in your city, and you lost that job. Okay? The second thing we know is that you know how to sell large-ticket items to wealthy people, and you're very good at it. And so were you, for instance, to sell Aston Martins or Bentleys, you would be in a similar market. And the downside is you don't know much about how they work. You've never worked on them.

So the curve would be, but you know how to communicate, serve, close the sale, handle the service after the sale, how a high-end luxury buyer wants to be treated and needs to be treated in order to create repeat business. You are an expert in that. And I think that set of skills can be applied in other places. Would you agree? Absolutely. I don't care if you're selling $100,000 watches.

If you want to do that, that's fine. I went to something with wheels on it because you had something with wheels and a motor before. So you're mechanically inclined as well. So maybe that's it. But, you know, I talked to a guy the other day that's selling the crud out of high-end cars and he used to be in the um recruiting business he used to sell uh you know

recruit people for jobs and it's a similar skill set because he was dealing with high-end executive placement and then he's dealing with uh executive placement into cars and it's the same set of people he's dealing with. They think the same way. You know how to keep that kind of person moving and happy. And I think if you broaden that out that wide, if you back off, you pan out with your camera angle, you'll see that, and I think you're going to be fine. So I wouldn't panic.

The only other thing I could think of is if you got into some kind of brokerage situation where you're brokering high-end luxury RVs, for $250,000, you can fly in and out of a city ever so often and make a deal happen. And so, I mean, you could go straight to a manufacturer or to a dealer of the same brand that fired you but is in a much larger metropolitan area and sell to people all over the nation and hand hold their hands in the process with a broker process of some kind um not sure where the leads come from not sure how that deal happens but when you're dealing with something that's two or three hundred thousand dollars airplane tickets

are cheap and that makes that deal happen you can't do that when you're making 35 000 but in your situation there's a lot of stuff you can do um i mean you could be gone one night a week and jump around and really close some big deals you could sell uh jets private jets that's another thing that would fit perfectly in your scenario. And the jet market's pretty hot right now because the economy's booming. Couldn't give a jet away two years ago, and now you can't find one. So, you know, that's another place. Just think of a luxury mechanical element.

That's all I'm doing. I'm just brainstorming out loud here. But I think you've got a lot of upside potential. It may take you six months to land in the right seat. But you've got plenty of money. You're all right. Get on a budget. Watch what you're doing.

Don't let your spending come up. But don't go do something dumb and it's a tenth of what you used to make and call that okay. And don't say that was your passion either because I'll smack you. This is the Dave Ramsey Show. It's time to take another look at your budget. That means scouring every expense and making sure you're not leaving any money on the table. One of the biggest expenses is your mortgage payment. I recommend a quick Churchill checkup. In just five minutes, our friends at Churchill Mortgage can tell you if you could save some cash each month. They've helped thousands upon thousands of my listeners keep more cash in their pockets through a smarter mortgage. I want you to call Churchill for your checkup and see if you can lower your monthly payment,

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Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Susan's with us in Fayetteville, Arkansas. Hey, Susan, how are you? I'm good. Good. I was just there the other day speaking at Dr. Boyd's church. Cross Church. Yes.

I was in the audience. Oh, cool. It's a wonderful time. We had a blast with you guys. Thanks for having us. How can I help today? I am going through a financial piece at Cross Church, and we're still in our baby step number one. Every time we get a couple hundred saved, Murphy comes along and takes it.

So I'm just, I've been looking for a couple weeks at the math for all of our finances and stuff and starting to get out of debt. It would take a good six to seven years for us to get out of debt on our current income. And part of it is student loans. And I never graduated, but I was thinking about cash flowing the rest of my degree and going back to school, and I would start as a junior. And I would have two years' worth to finish, but I would have to do it a lot slower since, you know, I've got a husband and five kids and two jobs trying to get through our –

through the franzy budgeting stuff. So trying to put that in, I only get able to pay one and a half percent. How much debt have you got not counting your home? We don't even own a home. Okay. How much debt? But we've got $65,000. How much of that is student loans? $40,000.

Okay. And what's the other $25,000? The rest of it's medical, and we have a $500 credit card. So medical and student loans is it? Yes. Okay. Why so much medical um i have five kids uh random trips to the emergency room that end up costing um you don't have health insurance um we did through most of it um but like there's

been a couple times like between jobs when the insurance wasn't covering and we couldn't pay for COBRA. What were you studying in college? I was studying business, but I actually currently, I'm a seamstress. I do alterations for a bunch of people in Bentonville, right next to the Walmart headquarters. So I get a lot of customers and stuff, and I really want to start a plus-size clothing line because I see a need for that market but I want to go back and get my fashion design and merchandising degree um that's just where that's where I'm at like I love sewing that's my heart why do you need a degree it's I I know that there's a lot of stuff I know, and I know how to do the patterns and stuff,

but there's a lot of other stuff that I know that I don't have the knowledge. You don't need a degree. You need knowledge. Yes. Okay. All right. That makes sense. Yeah.

Okay. Like, if I could just go take classes and not have to actually get the degree, I'd be totally for it. Yeah. Yeah, that's fine. That way you don't have to take all the same classes because you're just, all you're wanting to do is learn how to A, run the business, and B, be better at fashion design. Yeah. Okay.

So take some fashion design classes. That's fine. You can cash flow that. What do you make? Between me and my husband, we make about $25,000. $25,000? Yeah. Both of you25,000? Yeah. Both of you work full-time?

Yeah. Like, one of my jobs, you know, like, I work at a boutique, but I'm just, you know, hourly employee and stuff like that. And then I've been thinking about going and trying to get a job, but I also have to pick up kids from school. So me trying to get a job like that is kind of crazy. And so even my husband, like this past six or seven months, he's bringing home usually an extra $1,000 and stuff with overtime and stuff

that's helping us get on our feet. But we were like even a year ago, we were homeless. He's bringing home an extra $1,000. That doesn't even add up with what you're talking about. So what does he make? He makes $15 an hour. Okay. All right.

And how long has he been doing that? Just this past year. Okay. All right. So you're wrong. You don't make 25 000 a year 15 dollars an hour is 30 000 a year oh i think i i was going by what we bring home okay you have too much coming out of your checks then okay way too much coming out of your checks and if he makes thirty thousand dollars a year and he's bringing home an extra one thousand dollars that's forty two thousand dollars a year okay it's 25 with five kids is below the poverty level that's why i was freaking out i was trying to figure out what the world you're doing where you're not making a living and so what do you make gross before taxes

at your seamstress work um i bring home about $1,000. Okay. You do not need to spend any money on education until you get your seamstress income up. Okay. Fashion design is not holding you back. You don't have enough volume to your business to justify spending any money on education in that business yet.

You just have found something you love. And that's not a bad thing. I want to help you expand it. on education in that business yet. You just have found something you love. And that's not a bad thing. I want to help you expand it. So what I'm going to do is I'm going to put you in college for business. It's called Business Boutique Academy by Christy Wright. Her book is called Business Boutique, and it's equipping women to make money doing what they love.

And we're going to put you in that academy. The academy is closed, but I know a guy. Since I own it, I can get you in. Okay. And I'll put you in there with them, and there's a bunch of ladies there and a bunch of classes there that you take. It's not going to cost you a dime. I'm giving it to you. Okay.

Okay? And you go in there and take all those classes, get in those groups, learn from these women how business works and how to grow. There will be some people in there on fashion design that can help you, and I want you to start making $50,000 or $60,000 a year before you worry about taking a fashion design class. Okay. And then when you get to that point, because you're working that many hours

and you're producing that much stuff, and maybe even you've got your first seamstress hired that's working for you, then we'll start worrying about your designs. But we've got to get your volume up in the business acumen. You have to get the business to where it has its legs under it before you justify becoming educated at this point, especially with no more money than you guys have got with five kids. So I want to get some income coming in.

You hold on, and I'll have Kelly pick up, and we will get you signed up for Business Boutique Academy. It's closed, Kelly. They're not taking orders anymore, but I'm putting her in. Okay. So just tell the business boutique folk over there that Dave said. All right. Billy is with us in Dayton, Ohio.

Hey, Billy, welcome to Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up? Hey, so my wife and I are in the process of trying to consider buying a house. The challenge we're running into is that we own two rental houses and we currently rent the one we live in and we don't want to take on more debt.

And so we're trying to figure out whether we should sell the rental properties or, you know, how to just sort of finagle that and not getting into too much debt. Okay. Do you have – what are these rentals worth? Well, one of the challenges that we face is that the rental properties are actually out of town. I'm a military guy, and we're currently living in Dayton, Ohio, but our rental properties are in Georgia and Virginia. Seldom. The value, seldom?

Yes, I would not long-distance landlord. Okay. No, you are asking for trouble. You need the money, you're in the military, you're trying to buy a home, and you need the money, and you don't need to be long. You did not set out to own rental property everywhere. These are rental properties by default. It was not your five-year strategy to buy rental properties all over the United States.

So that's been the inclination that I've been getting from a couple of folks that I've been talking to. My only hesitancy, though, is that they've been successful. I've had renters that have been paying the mortgage, and it seems like there's the possibility of the value going up and things like that. I'm sure the values will go up, but I'm also sure somebody's going to change their Harley oil in your living room because you're out of town. This is going to happen.

I've got rental properties, man. I've got a bunch of them. I've owned rental property for 40 years, and you have got to be – I just don't do any long-distance landlording. I don't have any property that I rent out that is not in my town, and you did not buy these properties by plan. You ended up with them, and you're trying to move on to the next phase of your life, which is home ownership.

You are a long-distance landlord, and you don't even own your own home. I personally would sell both of them immediately. You do what you want to do, but that's what I would do. Thanks for the call. This is the Dave Ramsey Show. You know what I've learned after talking to so many people who have been victims of ID theft? They feel violated and they have a sense of fear and intrusion. It can be overwhelming. It's scary and infuriating at the same time. People question your character.

You try to figure out how it happened and you worry it's going to happen again. Then you have to deal with cleaning up the mess. Bill collectors, credit bureaus, even the police just make the nightmare worse. And trust me, ID theft is not going away. That's why I personally worked with Zander Insurance to develop an ID theft plan that provides the best protection and value, smart strategies to help reduce your risk so you don't feel so helpless, along with taking over all the work if you do become a victim.

And without wasting your money on gimmicks or things you can easily do for yourself. Go to Zander.com or call 800-356-4282. Do not wait until it's too late and you have to go through this nightmare on your own go to zander.com Thank you for joining us, America. Tim and Daphne are with us in Joplin, Missouri. I see on my screen you're debt-free. Congratulations. Thanks, Dave.

Very cool. How much have you paid off? $35,000. Woo-hoo! How long did this take? About 12 months. Good for you. And your range of income during that time?

$60,000 to $72,000. Cool. What do you all do for a a living i am a middle school home ec teacher and i deliver medical equipment cool then what kind of debt was the 35 000 it was student loans all of it yes you kicked old ugly sally may out she's gone. I love it. Kick her to the curb. She's gone. Well done. Well done. So what happened 12 months ago that put you guys on this journey? Well, David goes a little bit farther back than that. In 2008, we went through financial peace with our small group and we actually had about $80,000 in debt at that time. We never added to the debt since then, but we never really got intense about getting rid of it.

So you flunked the class. I'm sorry? So you took the class 10 years ago and flunked it. We kind of did, didn't we? Yeah. Okay. We sure did. So in the last 12 months, we had enough.

So we paid off the remaining $35,000. Okay. So you knew what to do, but you just reached your point. You got, okay, we got to knock this out now. Exactly. So what caused that final conversation 12 months ago? We were making too much to be in the situation that we were in. Okay, so whose idea was this? Who said we're going to turn up the heat, you or Tim?

It was mine. Okay, so Tim, she walks in and goes, hey, we're about to all of a sudden get serious. What did you say? That sounds like a great idea. I was tired of it too, and I think it just kind of clicked at that point. I think just one of us needed to bring it up, and she brought it up, and we went at it.

Cool. What do you tell people the key to getting out of debt is? I think it's focus and commitment and focusing on the goal and commitment to just do whatever it takes to get rid of that debt. Good for you guys. Well done. How does it feel? It feels great. You're finally there. Don't you guys. Well done. How does it feel? It feels great.

It feels great, Dave. You're finally there. Don't you wish you'd done it five years ago? Oh, exactly. That's the hardest part of the whole thing is knowing we could have done it a long time ago. Amazing. Amazing. Very cool.

Good for you. Well done. We've got a copy of Chris Hogan's book for you, Retire Inspired. That's the next chapter in your story to be millionaires and outrageously generous as you go along so well done you two very proud of you tim and daphne joplin missouri 35 000 paid off in 12 months making 60 to 72 count it down let's hear a debt-free scream. Three, two, one.

We're debt-free! Way to go, you two. Well done, well done, well done. Man, that is absolutely fabulous. Chase is on Twitter. Says, my home's worth $200,000 and I owe $115,000. My bank's offering an opportunity to refinance and take cash out to pay off all our debt. It'd be great to be out of debt, but I wanted to run this by you first.

Well, you wouldn't be out of debt. You would have just moved the debt over onto your house. Dumb idea. 88% of the time that people take debt consolidation loans out, they don't change their habits and they run their debts back up. The only time I tell people to move debt into a debt consolidation is to avoid bankruptcy or foreclosure, and you're not asking me about either one of those. So I think your bank wants to see you deeply in debt

because that's what banks do so listen when a bank says hey i've got a great idea what they're really saying is hey i think i can make some money off of you i mean really it's like playing with a skunk and wondering why you got sprayed seriously it's not a it's not a pet it's a skunk so don why you got sprayed. Seriously, it's not a pet. It's a skunk. So don't pet it. This is what you're dealing with at a bank.

So no, Chase. No, no, no, no, no. Alan on Twitter says, Dave, I just got laid off, and I need to move my 401k to my Roth IRA. Should I go ahead and do that if I have a chance of coming back and working for the same company in the future. I would roll it to a regular IRA, not a Roth IRA, because if you roll it to a traditional IRA, you have no taxes. And unless you've got a real pile of money and just want to pay those taxes right now, I would not convert it to a Roth. But I would roll it to a traditional, even if you're going back,

because that portion then at least is in your control. You restart your 401K. There's no advantage to having left your money back there. No mathematical advantage. Matter of fact, no advantage at all. So I would take it with me. Mike's in Abilene, Texas. Hey, Mike, welcome to the Dave Ramsey Show.

Hey, thanks for having me on. Sure, how can I help? Better than I deserve. How can I help? Well, you know, I've had two burning questions for you, but I know we're short for time, so I'll try to make one of them pretty quick. My wife and I bought a house back in 2014 when we moved here.

We first started off with FHA and wanted to get out of the lifelong PMI, so we re-fied, but we did a 30-year note. We've recently gotten into FDU and not really super financial savvy and been trying to get our finances in order. And now I'm wondering if we need to go and refire our house again into a 15-year note. What's your interest rate? Right now we're at 3.75. No, you do not need to refinance.

If you pay a 30-year mortgage, if you calculate it 375, your mortgage balance today, and just put it in a calculator and come up with your 15-year payment and take your regular payment off of that, not counting taxes and insurance. Take your principal and interest payment off of that. And if it's $342 more to pay a 15-year, if you just send in an extra $342 a month, you're going to pay a 30 off in exactly 15. There is no benefit to refinancing a loan except to save on interest rate, and interest rates are higher now than your current interest rate is, about a point higher, as a matter

of fact. And so you have a 30-year mortgage, just pay it like a 15, and it'll go off in 15. If you pay it like a 10, it'll go off in 10. mortgage just pay it like a 15 and it'll go off in 15 if you pay it like a 10 it'll go off in 10 if you pay it like a 7 it'll go off in 7 and you just you calculate the payment on a mortgage calculator you can go to our website and calculate your mortgage calculator calculate the payment on a 15 year with your remaining balance add the difference to your payment not counting taxes, and you will be off in 15 years. No need to go to the expense to refinance. And I wouldn't because you get a higher interest rate in your case. Wouldn't go that way.

Thanks for the call. What if you never had another student loan payment? You never had another credit card bill? What if you never had a car payment again? What if you used all that money to invest and be generous? Did you know you would be very wealthy? You can take control of your money. Our most popular program

is Financial Peace University. The step-by-step plan teaches you how to spend wisely, save for purchases and emergencies, pay off all your debt, start investing for the future and so much more. It's a one-year membership, $129. It includes online access.

It includes going to the nine lessons at a group near you. It includes EveryDollarPlus. It includes many other items we put into the online experience as well. And it's a $500 value. It's a deal. Financial Peace University, DaveRamsey.com for info, or call Customer Care. They'll help you out at 888-22-PEACE, 888-227-3223. You know, I started teaching that class on an overhead projector, the bad suit 25 years ago.

Five million people, almost six million people now have been through that class. It changes everything when you learn how to do stuff God's ways and Grandma's ways. When you have common sense and you apply it to a proven plan, and you submit yourself to a proven plan that is dictated by common sense, it'll change everything for you. You don't have to fix this, by the way. It's not broken. Yeah, we kind of got all the rough edges knocked off of it about a decade before you came along. So we're here to help you. Financial Peace University. We'll be right back. Thank you for joining us. Lee is in Michigan.

Hi, Lee. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? I have a question about cashing in gold and silver coin at a loss in order to pay off my mortgage early. The gist of it is we were, more me than my husband, was nervous a few years back in 2010, and we bought some gold and silver.

And you're going to lose money because you bought it at the freaking top of the market. Yes, we did both. It was horrible. So you're losing 50% of your money. Yes, we are. Isn't gold a wonderful investment? No, it's not. Yeah.

No, it's horrible. Okay, listen, here's the thing. Regardless of what you're going to do with the money. sucks. Yeah. No, it's horrible. Okay, listen, here's the thing. Regardless of what you're going to do with the money. Okay. Regardless. You never look at an investment and make a decision based on the past. Okay. You always make your decisions on the investment based on what you perceive the future to be.

Okay. Okay. And so what you paid for it, in words doesn't matter it's what it's going to do in the future that matters yeah so how do i know what do we think gold is going to do in the future well we don't know what do we think house prices are going to do in the future well we don't know what do we think mutual funds are going to do in the future well we don't know the only reasonable way to forecast investment returns um is to say what they have done in the past over a long period of time is likely to be what they will do in the future over a long period of time, plus or minus wonderful and tragic events. Okay.

Okay, which we can't predict those. So if the economy booms, in other words, you can't predict that exactly. If the economy tanks, you can't predict that exactly if the economy tanks you can't predict that exactly if somebody fires a missile at us and it changes the economy you can't predict that somebody flies a couple airplanes into a couple towers you can't predict that but it will affect the economy so what we have to do is just give our best shot on that but the old thing you've heard you know uh past uh results are not indicative of future returns horse crap of course they are otherwise you would buy a buy a house in a crummy neighborhood instead of a good neighborhood right yeah and so what we have

here is what's known as a crummy neighborhood gold has not got a good track record long term as a matter of fact it sucks as an investment over a long period of time. And so what's this gold and silver worth today if you cashed it all in? Around $100,000. Okay, so if we pile $100,000 in the middle of the table, would you buy gold and silver coins with it? No. No.

Okay. For the same reason that you wouldn't buy them again, you would sell them today. Now let's decide what we're going to do with your $100,000 them again, you would sell them today. Now, let's decide what we're going to do with your $100,000. Oh, you'd like to pay down the mortgage? Sure, I'll go with that. But they're separate decisions. Do you see what I'm saying?

Kind of. To me, the confusion is that I don't need the gold and silver. Like, we can just plot along paying our mortgage and it'll be done in three and a half years. No, no, no, no, no. It's not about the mortgage. It's not about the mortgage. One more time. You have $100,000 cash, $100 bills laying in the middle of your kitchen table.

Uh-huh. Are you going to buy gold with it? I don't need the money, but are we going to buy gold with it? No. No. If you keep this, by tomorrow, it's like you bought it again. Do you understand that mathematically? Yes.

Making the decision to keep it is the same as making the decision to buy it. I've heard you tell other people that when it comes to things like, let's say, borrowing from the 401K to pay off a mortgage. But this has no other implication. Like, it's just sitting there. Okay. It does have an implication. Forget the mortgage. Forget the mortgage.

Pretend like we were going to go to Disneyland with the money. All right? I don't care what we're doing with the money. The point is the way you properly analyze whether to keep this gold is to say, I have $100,000 sitting in the middle of the table. Would I buy gold with it? Heck no. Okay.

And if you keep it tomorrow, you bought it again. And if you keep it the next day, you bought it again. Every day you keep something, it's as if you made the decision to purchase it again for its current market value. There's nothing wrong with that as long as you the decision to purchase it again for its current market value. There's nothing wrong with that as long as you don't mind buying it. So let me give you an example. If you and I both thought or if you thought gold was going to double in the next year and you had evidence to make you actually believe that. If we were going to turn $100,000 into $200,000 in one year. And you and I both believe that, or just you believe that.

And we had $100,000 cash sitting in the middle of the table, and I said, would you buy gold? You're going, crap, yes, because I could turn $100,000 into $200,000. Right? But we're making the decision then, not based on what we paid for it. We're making the decision based on what we think it's going to do in the future. Okay. The decision to buy or sell or hold is that is based on the future not the past other than we use the past to project our future but and when we do that with gold it tells us to sell yeah so sell it take your loss take your lumps you made a dumb investment you lost a

bunch of money that's stupid tax now you got a pile of money in the middle of the table. What do you want to do with that money? Well, might as well pay off the mortgage. What the heck? Okay. Different decisions. There are two different decisions. There are two different buckets to do proper critical thinking on this. Jonah is in Dallas, Texas.

Hi, Jonah. How are you? Hi, Dave. How are you? Better than I deserve. What's up? I'm a college student. I have about between $8,000 and $10,000 a year that is coming in

that I don't have anything to pay for with. How are you paying for college? It's a merit scholarship, so I get a bunch of extra money. Okay. Good for you. Very cool. Merit, based on what? Your grades or your citizenship or what? My national merit test. I'm a national merit scholar.

Okay. And can you do anything to mess that up? I can, but it would be very hard. What could you do that would mess it up? If my GPA drops below 3.0. Oh, well, that's not that hard. What could you do that would mess it up? If my GPA drops below 3.0. That's not that hard. That's fairly easy. Okay. Yeah. You can drop a GPA pretty easy. Okay.

So what would I do if I were in your shoes? I would pile up that money in a savings account as an insurance policy to ensure that I finish school with no debt. You are your best investment. No, I would not invest this money. Okay. And because you're the best investment mathematically.

What are you studying? Right. Economics. Oh, yeah, you're a great investment. You're going to do really well. And you're bright. You got all these grade-based scholarships, so you're a smart guy. So, yeah, I don't need you to have the money that the $8,000 would make you during the next two or three years. I do need you to graduate with these honors in this wonderful degree field and pay cash for it with no debt.

That is very, very, very important. And that's exactly what I would do in your situation. Thank you for the call. is very, very, very important. And that's exactly what I would do in your situation. Thank you for the call. Open phone is at 888-825-5225. Dave, I'm thinking about getting Financial Peace University going in my local union. Do you have to be at a certain baby step to be a coordinator? No.

We try not to have perfect people being our coordinators, and we would prefer you to be wherever you is if you're just getting started you want to be a coordinator you can coordinate a class all we want you to do is just tell the truth don't go in there acting like you're some kind of dadgum rich financial person got all your act together if you don't just tell the truth i'm learning this with you people i don't know some of you people are ahead of me i ain't even got my first baby step, my first $1,000. You can lead a class. If you love people, you can put chairs in a circle and lead a discussion and stick to a plan that somebody else gives you,

then you're welcome to lead as a coordinator, Financial Peace University, anywhere you want to lead it. We'd love to have you. Get in touch with our team, and we'll help you get that set up, Patrick. And thank you, thank you, thank you for following us on Twitter. You can also follow us on Instagram. We've got about a million folks there. We've got about 4.5 million, 5 million on Facebook.com slash Dave Ramsey.

The Dave Ramsey Show on YouTube has exploded as well. A lot of you, about a million of you watching that now. It's a live stream every day. You know, YouTube's live streaming stuff nowadays. So you can watch the show completely free on YouTube every day. You can listen to it on a podcast every day. About five and a half million of you do that. Thank you for hanging out with us.

You can listen to it on Real Radio, which is where the whole thing started. There's just under 10 million of you doing that. Thanks for hanging out with us on Real Radio. Good stuff out here, people. About 604 radio stations right now carrying the show. We appreciate you. Thanks for being with us. James Childs is our producer. Kelly Daniels, our associate producer and phone screener. I'm Dave Ramsey, your host, and we'll be back. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.