The Ramsey Show - App - Learn to Be Content With What You Have (Hour 3)

Episode Date: October 14, 2019

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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 am Dave Ramsey, your host. We invite your calls toll-free and nationwide at 888-825-5225. That's 888-825-5225. Tyler starts off this hour in Honolulu. Hi, Tyler.

How are you? Hi, Dave. How are you doing? Better than I deserve. What's up? So I'm in the Army. I'm 19 years old, and I'm on Baby Step 1, and during the Christmas time, we have time to go home. And I was wondering, should I dip in my emergency fund to be able to go home?

My godfather was diagnosed with stage 4 colon cancer. Okay. What do you make a year? I'm an E2 currently. I'm about to be promoted to an E3, so I'm making around $20,000. Okay. And you're 19. You live on base. Yes.

Okay. And what's it cost to go home? I was looking at Flake last week, and the cheapest one I found so far is $967. Where's home uh ocala florida big jump from honolulu okay oh yeah um military doesn't have any way you can hop a ride do they they have something a program like that but it's hard to get on it during the holidays or how packed it's going to be. So there's a chance. It's just if it doesn't work out and I didn't get that flight,

then the flight might be even more if I'm trying to leave within three days. Yeah. And if you buy the flight, then you lost that money because you can't get refunded. Yes. You've got to use the ticket. This. You've got to use the ticket. This is your only chance to use the ticket. Okay.

All right. Well, I mean, it's a decision you have to make. You're a grown man. Thank you for your service to the country. Thank you. It's a difficult decision because you're broke. And, you know, you have to declare this an emergency to use your emergency fund and if it's a vacation and it's not a vacation but if it's a vacation then it's not an emergency right

but if going to see your god if you're going to see your godfather who you know has been given a horrible diagnosis you in your mind and your closeness with him and so forth is an emergency. Or if you're using that to just rationalize going home and seeing your mommy for Christmas, then don't do it. Right. But if this is something that you're that close to him and that means that much to you,

then, you know, yeah, you would go do it probably. But you're declaring it an emergency and you're using almost your last dime. Okay. This is really, you're really almost your last dime. Okay. This is really, you're really cutting this down to the wire. This has got to be a big deal to do this. It sounds like it is a big deal, but you've got to really put it in that category. It's not the medium deal category and it's not the sort of kind of I'd like to go home and I'm using this as an excuse category.

It's got to be this is something I'll regret the rest of my life because this man means so much to me and so on and so on. I mean, it's got to be, this is something I'll regret the rest of my life because this man means so much to me, and so on, so on. I mean, it's got to be big deal category. You see what I'm talking about? Yeah, it is a big deal to me. I lost my father to pancreatic cancer, so it's hard to see my godfather get diagnosed with cancer as well. It's hard to see anyone get diagnosed with cancer,

but whether you make this trip is dependent not upon the diagnosis, but upon your relationship to this person. And if you're very, very close to this person, that's fine. If you met them once when you were three, and then they're declared your godfather, then you're using this as an excuse to go home. You see the difference? Yeah, this is the person that raised me since my father passed away. Okay, now, now, see, that's the difference. That's what I'm talking about. So that's the way I'm thinking through this is, you know,

what level of emergency is this because you're using your last freaking dime. Oh, and by the way, between now and Christmas, making 20 grand living on base, I don't know where your money's going. You ought to be saving a bunch. Yes, I recently just started your program. I got stupid once I first got my job. Yeah, but basically this is October, okay? So, I mean, you've got October, November, and December's check to work with,

and you really don't have anything to do with money because, you know, your food and your clothing and your housing is furnished. Yes. So stay on base and don't party and put all your money in the account. Yeah, I've completely stopped. After all my bills and my budgeting, I can put away around $400 of paychecks. I'm thinking around, like, by the time I'm able to go back, I should have around $1,600. There you go.

There you go. Now we're thinking the right way. And you might even crunch that down a little bit further. Let's crunch it down as far as you can. You shouldn't have a lot of bills unless you've got some debts. But, because, again, your necessities are covered, food, shelter, clothing, and so forth in your situation. So thank you for serving your country, sir.

And I hope this works out for you. We appreciate the call. Jeremy's with us in Roanoke, Virginia. Hi, Jeremy. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure, man.

What's up? A couple years back, I received inheritance, some of it was mutual funds and some of it was stocks. Roughly now, it's $12,000 in mutual funds and about $5,000 in stocks. My wife and I are on baby step number two. We've got $24,000 in student loans. My question is, should I cash out the mutual funds and all that and just pile it on the debt snowball? Yep, all of it, the stock and the mutual funds.

Okay. Am I going to have significant tax when it comes to tax time? Am I going to be at a lot of fees? Are they an inherited IRA? I don't believe so. Okay. I think they said it was a single account or something of that sort. If it's just a simple stock account, a simple mutual fund account,

your basis for tax purposes is what it was worth when you inherited it. You will only pay taxes on what it has gone up since you got the money. Okay. I think it's roughly $4,000 is what it has gone up since I inherited. Okay. And so you might have $1,000 in taxes. Okay. Something like that. have $1,000 in taxes. Okay. Something like that.

That would be the most. So, you know, if you cash it out, you know, holler at your tax guy, have them look at what's called the basis. Your basis is your market value at the time of inheritance, and the change in basis from that time, what it was worth at the time you inherited it, up to now is what is taxable. And so there's zero tax on anything that you inherited at the time you inherited it up to now is what is taxable and so there's zero tax on anything that you inherited at the time so that's the deal but hey thanks for the call man we

appreciate it but check your tax guy and i'd set aside the thousand bucks but yes we cash out everything that is not retirement and use it on baby step two because we're getting out of debt so that we can build wealth. Because your most powerful wealth building tool is not an inherited stock account. It is your income. And we're trying to get your income back because right now it's committed to other people. Sounds like that old ugly woman, Sally Mae, is taking some of yours, student loans. And so we have to kick the ugly woman out. Old ugly woman, get to the curb. That's the plan with Sally Mae. We some of yours, student loans. And so we have to kick the ugly woman out. Old ugly woman, get to the curb.

That's the plan with Sally Mae. We want her out. We want a big-time eviction notice served right there. Just tack it to her forehead right there. There we go. You are leaving the building, lady. That's how this works. You can do this.

You got it, man. 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-accredited 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. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. That means even if you mismeasure or you pick the wrong color, they'll remake your blinds for free.

Site-wide savings is happening right now. Plus, take an additional 5% off at Blinds.com. Today's question comes from Justin in Arkansas. I'm 26 years old. I make $96,200. Wow. The only debt I have is my house, which is on a 15-year payment. And I have two roommates that live with me and make my payment.

Can I buy a $55,000 truck? Well, yeah, I guess you probably can if you want to, but I wouldn't. I do have the cash to pay for it that's not in retirement good i would not buy a car listen if you take the things that have wheels and motors in your life and you add them all up together and they equal more than half your annual income you have too much tied up in things that are going down in value. And if you were to ask 20 58-year-old millionaires or multimillionaires if you should buy this truck, 20 of them would tell you no. 26 years old making 96 grand and you're getting ready to pay 55 grand for a truck. No.

No. No. No. Brian is with us in St. Joe, Missouri. Hey, Brian, how are you? Great. How are you, sir? Better than I deserve. What's up?

Well, I am just like lost. I am a disabled veteran. I make $1,700 a month. I owe 70 grand in house and back child support and legal fees from the divorce, which is about 40,000. Actually, it's about 45,000 and I don't know how to dig my way out of it. And I need some help. How much do you owe on your home? $9,000.

Okay. And what's it worth? $10,000. Okay. I bought a shack, a shanty to live in. Gotcha. Okay. What is the nature of your disability, sir?

I have PTSD. I have a displaced vertebra in my back, so I can no longer do my maintenance job that I used to. And my leg was cut off and put back together because of injuries. Yeah. Sounded like you took a serious hit, dude. I'm sorry. That's okay. You know what? I'm proud of my service.

Well, you ought to be. We're proud of you. Thank you, sir, for your unbelievable sacrifice. Well, what I would always tell anyone that is facing disability, regardless of the source of the disability, is to try to think through not what I can't do, which is pretty obvious in this case, but what I can do. Correct.

Because your problem is income. I'm going to school to change my careers. Yeah, your problem is income. And so that's why I'm thinking about that. And, you know, just in talking to you, you know, you and I are having a fine conversation, so there's no reason you can't use your mind and your voice and not your back, right, in order to create some kind of an income stream. Lots of online opportunities and um so forth i was reading a story that a while back i actually put it in one of my books and this is not the answer but just

to kind of tell you how wild it is out here in the world today this guy was going going to garage sales and buying old golf clubs and shining them up and putting them on ebay and he was making a hundred thousand dollars of your profit i mean isn't that just that almost sounds silly doesn't it you know and there's something like that you know there's something like that that you probably could do um that that um you know i've got a buddy that's an ex-military guy who's just an absolute, has become an absolute fabulous gunsmith. He loves tinkering with, you know, guns and putting them back together or building them out for people and that kind of a thing. And, you know, and it's just because of his military background, he loved that thing. And I'm a gun guy, too, so that's where I got that. But I don't know what it is for you, but you've got something in your background,

something in your history, something even out your windshield that you've just thought about. And I think most of your problems would, if you could just make $1,000 a month more, it'd change everything for you. See, I'm going to school for IT. Oh, good. Because I can no longer do what I used to do yeah i've got two more years but what i don't know is okay once i get my degree i'm sure that i'll make a whole lot more money than i was making before yeah but i don't know where to start when did you uh when did you start your tech classes?

About a year ago. I've already got a bachelor's. This is a different bachelor's. Okay, so you've got some knowledge in technology now. Yes, sir. So while you're in school, you can start a side hustle just helping people with some of their technology needs. There you go. That's exactly the kind of thing I'm thinking about.

So you're way ahead of me on this. So really, I think where you are today is you're going to tread water until you finish some of your game plan here to get your income up. And whether it's landing a job or whether it's just landing a side hustle and you just run around self-employed helping small businesses with their computers or whatever. I don't know. And, but if you solve people's technology problems, most people, there's two types of people, people that love technology and know about it, and the rest of us that are intimidated by it and can't fix it for beans. And so we need guys like you and the guys like me. And so that's what I'm saying. I think you got real opportunity there. So I think you start a side hustle now because $1,000 a month starts to really beat on some of this stuff.

And, you know, you could change your living situation pretty dramatically if you wanted to then. You certainly could begin to make arrangements on the legal fees and that kind of stuff that you've got hovering over you. But, I mean, a couple thousand dollars, $1,000 a month to start with, a couple thousand dollars over time added to your income, wow, it would be absolutely incredible. Hey, thanks for the call, and again, thank you for your service. If I can help you further while you're going through all this, you call me anytime, okay? Ruben is with us in New York. Hi, Ruben, how are you?

Hi, Mr. Ramsey, how are you? Better than I deserve. What's up? I just started listening to your show, actually, on Sunday. I just asked. And, I mean, I brought it to my wife's attention, the whole idea. But she's reluctant. I bet.

And I was just wondering. She said that basically she would watch me and see how it goes. So my question is, how do I get her on board and possibly be able to take your financial peace and diversity together? Yeah, well, I think that's going to be necessary. She can't watch you from the sidelines. The two of you have to do it together, whatever you're going to do, because people just don't win with money when they're dragging a reluctant spouse along.

So a couple things you can do. Number one, you need to think back to two weeks ago before you ever heard any of this material and um then start to think about okay first time you heard that what was it that you felt and why was it that you got excited about doing this it wasn't a what you weren't excited about oh i get to do a budget yay oh i might have to sell some stuff yay i might have to work extra yay none of that is exciting but what became exciting to you was that you could a get control b get the stress down c start to win with money d start to build some wealth you know these kinds of whys and so i would sit down with her and say gosh i've been kind of dreaming and I want you to think with me, how would it feel if we didn't have any payments?

How would it feel if we had substantial money and investments? And I really want us to work together towards that, and I want us to try this and get the why going rather than sit down and go, Well, Dave Ramsey says we can't go out to eat anymore. Dave Ramsey says sell your car. You're just going to turn my name into a cuss word in your house, and don't do that. That doesn't work at all. But you've got to talk to folks about why they would want to do something. Ask them why they'd want to do it.

And if your spouse understands a why, if you can get on the same page of the why, why, why, why, then the what we're going to do changes completely. But, you know, you turn off the television, you put the kids in bed, you look deeply into her eyes and say, baby, this is very, very important to me. I really, really need your help. I really want us to work together on this. If you have any kind of a marriage at all, when you say something like that,

you're going to get a positive response. This is The Dave Ramsey Solutions, Elle is with us. Hi, Elle. How are you? Hi, Dave. I'm good. How are you doing? Better than I deserve. Welcome. Where do you live? So I live here in Nashville. I'm originally from Kansas, though. Okay. Yeah. Well, welcome. Thank you. Good to have you today. And you're here to do

a debt-free scream. Yes, I am. Love it. How much have you paid off? I paid off $60,000. Good. And how long did this take? It took me about three years. Okay. And your range of income during that time? I started out at $50,000, and then in the mid-70s, I picked up a second job towards the end of my baby step two. Oh, gotcha. What do you do for a living? I'm an accountant. I'm a CPA. Cool. What's the second job? So I kind of just did a part-time thing at the YMCA. Didn't earn a lot, but it kept me out of trouble. It kept me out of the stores.

You look like trouble. Yeah. You look like you need to be kept out of trouble. Yeah, Target gets me in trouble. Oh, that kind of trouble. Yeah. Now that's possible. Okay.

All right. What kind of debt was the $60,000? It was all student loans. Ah. What's your degree in? So all accounting. I got my undergrad and master's degree in accounting. Great degree.

Great degree. Which obviously set you up to be CPA. Yes. Okay. Excellent. Excellent. Excellent. So what happened three years ago? Is that when you got out of school?

Yes. So I graduated and, you know, when you graduate, they require that you do exit counseling with your financial aid. And as terrible as it sounds, I didn't really know what that final number was going to be. So I was kind of just doing my exit counseling, hoping for the best. And I saw how much I owed, and it was terrifying because I knew what my starting salary was going to be, and I owed more than my one-year salary. So I saw that, and I saw my monthly payment, and then I saw all these different payment plans.

And I'm in accounting, so I knew the interest was going to add up quickly. And, yeah, it was very scary. But I knew about the baby steps, so I just decided that's the route I was going to add up quickly. And yeah, it was just, it was very scary. But I knew about the baby steps. So I just decided that's the route I was going to take. Okay. So where'd you know about the baby steps from? So I actually listened to the Dave Ramsey show when I was like in junior high and high school age. You're a financial peace baby.

I know. Well, kind of. So my dad is a farmer in Kansas. And in the summertime, I would drive tractor and combine. And all you have out in the fields is the radio. I didn't even have a cell phone back then. And so, you know, I would listen to FM radio and you learn quickly that they play the same songs over and over again. So then I learned about AM and I could switch to AM and listen to talk radio. So, you know, I'd listen to FM in learned about AM and I could switch to AM and listen to talk radio.

So I'd listen to FM in the morning and then I'd switch to the Dave Ramsey show from one to four, nice little three-hour break and listen to talk radio and then switch back to FM. So it was just a nice little break in the day. I have a strange new vision now.

This show of you as a little kid driving a combine that's bigger than a house, tuning in the radio as you're out here getting some, oh, we got a picture of it. I know, yes. What is that, wheat? Yes, my dad's a wheat farmer. So yeah, we would drive combine and cut the wheat. And you know, after that, we'd have to work the fields.

How was the youngest you ever drove that combine by yourself? I would probably say like 12 or 13, maybe something like that. Yeah, and I have two older sisters, and they did the same thing. Wow. So, yeah. You learn how to work. Yeah. You grow up on a farm.

You learn how to work. Yes. And you learn how to drive early. Yes. Yeah, that too. Very cool. All right. So this was drilled in your head.

You come out of accounting. You get the degree. You look up and go, oh, my gosh, we're dead. Yes. And so baby steps, I got to, where's that guy from the radio? Then what happened? Well, I just jumped right into it. So I went to Kansas State University.

I moved to Kansas City. So it took me a couple months to get established. But then I jumped right in. I started paying off my debt. And then I kind of hit a little bit of a bump in the road. About a year into the process, I was in a motorcycle accident. And so I had to hit pause on the baby steps for about six to eight months. And I just paid the minimum then. And then I picked it back up and was able to pay everything off. But I'm so thankful that I was working your plan because

I probably wouldn't have had an emergency fund in place. And that was so important that I had that. It was so helpful to me. It made this terrible situation that I was in so much more manageable. So I'm just so grateful that I followed the plan and had that set aside. You know, it's very important. So many vehicles in this story. Combines, motorcycles, everything. It's just too much.

Exactly. Good for you. Yeah. So how does it feel now that you did this? It feels amazing. It's the best feeling in the world. How old are you? I'm 28. 28 years old. Another one of these rock star millennials I talk about all the time. Very well done. Very cool. So you talked to your dad and your mom. You were doing all this stuff. Yes, I did. I talked about the plan constantly. I was probably annoying throughout the process just talking about Dave Ramsey. But yes, everyone's kind of been in on the loop.

Gotcha. Who was your biggest cheerleader? Probably my sisters. I have two older sisters, and they are also working the plan, and they're working on paying off their student loans right now. So now I'm like, they've seen me pay them off, and they, they'll be next. So, you know, we kind of cheered each other on throughout the process. Perfect. Yes. Well done. Very good. What do you tell people the key to getting out of debt is? Um, I would say, you know, obviously the budget, you have to tell your money where to go, but I also think, um, just being content with what you have. That

was such a big thing throughout this process is just learning to be content with what you have that was such a big thing throughout this process is just learning to be content with what i had and not focusing on what's on social media and what everyone else is doing that was just so beneficial to me um yeah you just have to focus on yourself and what rachel says love your life not theirs yes exactly yeah wow way to go well you are a sharp young woman i'm honored to have you on here. I'm proud of you. I'm sure your parents are proud of you and your sisters. Way to go.

Yeah, thank you. Well done. You did it. You did it. You did it. You did it. We got a copy of Chris Hogan's book for you, Retire Inspired. That's the next chapter in your story to be a millionaire, and you're on your way.

You know the numbers. You can do this. It's very, very doable. Very well done. All right, Ella's in Nashville. $60,000 paid off in three years. This is a motorcycle-riding, combine-driving woman right here, I'm telling you. Count it down.

Let's hear a debt-free scream. Three, two, one. I'm debt-free! I love it Yeah Wow Way to go Absolutely amazing Very well done

Yes Doesn't get any better Alright Madison is with us in Atlanta Hi Madison Welcome to the Dave Ramsey Show Hi Dave Thanks for taking my call. Sure.

What's up? So I'm 25 years old, and since I graduated college, I've been working full-time and pursuing my master's degree while living at home. So I've been able to finish my education debt-free. But now that I'm finishing school in December, I'm looking to move out and start my way on my own. And so I'm just curious if you'd recommend renting for a while and kind of getting my feet wet being on my own again,

or buying a house with the money that I've been able to save from. I'd rent a little bit unless it was a very unusual situation. I mean, not a long time necessarily, but six months or a year anyway. I'm assuming you're completely debt-free. Completely debt-free. And you have your emergency fund. And beyond that, how much do you have saved towards your house? I've got about $30,000 in the bank right now. Way to go.

Awesome. What do you do for a living? So I work in federal HR consulting. What are you doing now? Federal HR consulting, yeah. Okay, and that's your degree was in HR, your grad work you did? No, I was actually an English major. So I thought about going to law school.

It wasn't necessarily the path I wanted to take. I didn't feel like that was where I was in life. So this opportunity kind of fell in my lap, kind of a God-ordained opportunity. So here I am. Very cool. Good for you. Very well done. Yeah, you've got a lot of money.

I mean, you can buy if you want to. I don't mind, though. You know, in your case, you've got so much money and you've done such a good job. You're only 25. I might take six months and just kind of get it six-month lease somewhere and just kind of get settled in and start thinking about, okay. It might actually inform what you have in the apartment or don't have in the apartment that you rent and where it's located. You might be frustrated with things you didn't realize you were going to be frustrated with, which would tell you what to have in the house that you buy. You might make a better, more informed decision on the house,

which you'd learn by renting for that short period of time. Probably would, actually. So I'm probably going to try that. But it's no problem to go ahead and buy. You meet all the guidelines if you want to buy. But, again, anytime you do that, we want to have a mortgage on a 15-year fixed as a maximum, where the payment is no more than a fourth of your take-home pay on a 15-year fixed-rate mortgage. This is the Dave Ramsey Show. Thank you. Our scripture of the day, Proverbs 18, 15,

An intelligent heart acquires knowledge, and the ear of the wise seeks knowledge. Anyone who stops learning is old, Henry Ford said. Whether at 20 or 80, anyone who keeps learning stays young. The greatest thing in life is to keep your mind young. Adrian is in Hattiesburg, Mississippi. Hi, Adrian. How are you? Hello, Mr. Ramsey.

Thank you for taking my call. Sure. What's up, sir? My question is, I've just got started on the baby steps. I've got my $1,000 set aside, and I'm trying to work hard as I can on the snowball. Currently, I have $10,000 in debt, $7,000 on a car, and $3,000 on a motorcycle. And I'm wondering if I should just hurry up and pay off the motorcycle, or if I should sell it as the value that it has and put that towards my car to just knock out all my debt right away.

Yeah. So the motorcycle has three owed on it and it's worth what it's worth about 45 okay so fifteen hundred dollars in equity and the car has seven you said owed on it yes sir and what is it worth i believe it's closer to six okay and uh what other debts do you have? That is it. Okay. And what's your household income? I still live with my parents. I bring home about $40 a year. Okay. All right. So basically what we're saying is this $10,000 out of $40,000 makes you debt-free and owning both of these things free and clear.

Correct. And you don't have any overhead. You live with your parents. True. I do pay my fair share of bills. Okay. All right. So you pay some bills out for your parents?

I mean, you give them some money? Yes. How much money do you give them a month? Around $300. Okay. All right. So that's $3,600 a year that you're paying them, and $3,600 and $10,000 worth of debt would be $13,600 out of $40,000.

You see what I'm doing here? You feeling these numbers? Which kind of says to me, you should be able to pay off both of these things in six or eight months if you kept them both. Right. But you're going to have to not party on the weekends. You're going to have to pay freaking debt off. Right. I guess I'm getting more impatient trying to knock it out as quick as I can. Well, six or eight months is not that long.

But that's going to require you do nothing else but pay on debt. Right. No life. Now, here's my question. I have about $5,000 in savings. Oh. Well, then I would pay off. If you're going to keep the motorcycle, I'd pay it off today.

And then I would pay on the car down to $1,000. And so three, four, that puts $1,000 on the car and $1,000 in savings. And that gets us down to only $6,000. How quick can you pay off $6,000? Well, $1,000 a month is six months. $1,500 a month is four months. Gotcha. Well, what's your take-home pay?

A month? Yeah. About $2,000. Okay. home pay uh a month about two thousand okay so fifteen hundred a month three hundred a mom and dad two hundred for spending money and you're done in four months sounds like a plan that's what i'm just doing the big numbers with you here that's what it sounds like to me though i think you can do this get after it dude get after it get her Get her done. This is the Dave Ramsey Show. Thank you for joining us, America.

Casey is in Des Moines. Hi, Casey. How are you? Good, Dave. Thank you for taking my call. First-time caller, long-time listener. Well, thank you very much. My wife and I, we paid off $46,000 in debt in the last year.

Wow. And now all we have left is a small car loan for around $18,000 and a debt and a interest-free loan for my wife's parents for a student loan. So I have a SEP plan and it's going to be 25% of my salary at the end of the year. And I have around $30,000 between checking and savings. Do I take that SEP plan and pay it off towards one of those debts, or do I invest that into a Roth IRA? Okay, I'm sorry, you have a SEP plan? Self-employed pension plan.

Yeah, I know, I know what that is. But have you already put the money in it? No, it's being paid out at the end of the year. Oh, coming to you. Yeah, it's coming paid out at the end of the year. Oh, coming to you. Yeah, coming to me at the end of the year. You own the business? No, it is a small company. Oh, they're going to give it to you.

Do they not deposit it directly into the SEP? I don't think you get that money. I believe, I was, maybe I don't. I think it's them making a deposit into the self-employed pension plan on your behalf i don't think they give you the money i mean it is your money goes into your name like a 401k does but i don't think that money's i think that's inside of a retirement account that you're not going to be able to access that and so how have $30,000 in savings? We have $30,000 between checking and savings, yeah. Okay. And you owe your in-laws how much?

That's around $18,000. And the other debt you have left was how much? $18,000. So you have $36,000 left? Yes. Okay. Alright. Well, I would pay off the car today out of left? Yes. Okay. All right. Well, I would pay off the card a day out of checking for sure. Baby, step two is that you take all your money that is not in a retirement account and you throw it at your debt snowball. And so I'm going to pay off the card a day and I'm going to pay a big chunk on the in-laws and I'm going to have them done in just a few months. What's your household income?

About $130,000 a year. Great. You're doing good on the income side. And you've been doing good at saving. I was just wondering if we could pay off my in-laws first just to get rid of that big brother feeling. Sure. Like they're always kind of looking at us. Sure.

You can do that today. Okay. You have money in checking to do it. I don't care. You have two $18,000 debts. They're a tie on the debt snowball. So you can pick which one you want to do for whatever reason. Okay. You have money in checking to do it. I don't care. You have two $18,000 debts. They're a tie on the debt snowball. So you can pick which one you want to do for whatever reason. Okay.

So just take the in-laws. I love that. Christmas dinner will taste different when you don't eat with your master. The borrower is slave to the lender. And when you don't eat with your master, it changes the way Thanksgiving dinner and Christmas dinner tastes. So, yeah, I'm with you. Pay them off today. And then let's get the car paid off in what?

I mean, you're going to be able to throw another $10,000 at it, right? Yeah, I'm looking at probably six months total to be debt-free from everything. Oh, less than that. Side mortgage. Yeah, you probably only got, not counting the mortgage, you probably only got about $8,000 left after this conversation. I don't know. I mean, you've got to fine-tune what's in the checking and what's in savings

and get it down to about $1,000, and everything else goes with this debt. And I don't know how much is in there exactly. You're giving me a range is what you've got. But it sounds like you can be very, very close today. And then you just lean in and finish this baby up. And, man, then you've got all this income coming in and no payments. Then you build your emergency fund. That's three to six months of expenses. And then you can move on to baby step four and start putting aside 15% of your income

and so on down the baby steps. Allison is in Cincinnati. Hey, Allison, welcome to the Dave Ramsey Show. Hi, Allison. Let me try it one more time. Hi, Dave, how are you? There we go. I got it now.

Good, how are you? How can I help? I'm doing good so i have a question about talking to kids about money we send our son to an affluent school and he comes home and talks about how the other kids parents are millionaires and live in mansions and stuff like that and so he asks you know how much money do we have? And I don't mind having a conversation with them. How old is he? He's nine. Okay.

All right. We'll just make it age appropriate to that. And, you know, you just get to use those mom and dad one-liners, right? You know, maybe they are millionaires. Maybe they aren't millionaires. Maybe they just spend like they're millionaires and they're broke. I don't know, honey. But at our house, here's how we do things. That's all.

We can't control what they do, baby. But at our house, here's how we do things. That's all. We can't control what they do, baby. But at our house, here's what we do. We don't borrow money. We're very generous in our giving. We live on a budget and a plan. And this is what we do at our house. And we make enough and do well enough financially for you to go to this school. So we're doing all right.

But you're always, son, you're always going to run into people who have more than you and less than you. And you're always going to run into people who are show-offs. And you're always going to run into people who are the opposite of a show-off, who have a lot of money and don't look like they do. Because the vast majority of people who have a lot of money, you really don't know it. They're really pretty calm about it.

You can teach your kid that lesson. It's called humility. Yeah, it's a good one. So just keep talking about it. You'll be fine. You'll be fine. But, no, he doesn't have to keep up with them. As a matter of fact, you don't want to have him keep up with them.

Some of them are stupid. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace Christ Jesus Hey it's Blake Thompson

Senior Executive Producer for the show you know you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.