The Ramsey Show - App - Learning to Go From Addict to Hero (Hour 2)

Episode Date: September 13, 2018

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where dad 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. Thank you for joining us. Open phones at 888-825-5225 that's 888-825-5225 travis is with us in atlanta georgia hi travis how are you i'm doing fine how are you better than i deserve sir what's up well um i've just recently started listening to your show on xm and you kind of kicked the wind out of me and uh i got your book and i'm reading it and my question is i'm in chapter six and it says you have before you get started you have to be current with all

your creditors and right now i'm robbing peter to pay paul i mean it's tough i'm you know i'm up to my eyeballs and i was just wanting to know what's the first thing what how do i break that cycle like how do i dig my way out gotcha okay um my screen says you're recovering from bankruptcy are you in a bk yeah yeah i uh about four years ago i i had a big problem with addiction and i filed chapter seven bankruptcy and luckily my wife didn't leave me she's still with me and we have three kids and i just want to take the second chance to you know rebuild my life and i just it's just it's tough to bounce back. Yeah. So you've been dry three years? Oh, yeah.

Where'd it go, man? She actually left me on New Year's, and that was my rock bottom. Yeah. That'll do it. That'll do it. So what were you addicted to? Pharmaceuticals, prescription pain pills. Okay.

Good for you, man. That's a tough one to break. It is. Three years of driving. I'm proud of you. It's a lifelong battle, but I appreciate that. Yeah, I'm proud of you. So what is your income? About 55.

Okay. And how much debt have you got? Around 60. Okay. Altogether. Altogether. On what? Well, I owe $30,000 to family members, and I have some small loans and about $18,000 on my car.

Are you paying anything on the family members right now at all? Uh, no. Okay. All right. So, um, out of the $50,000, there's not, you know, half of it you're not paying anything on right now. Well, except my everyday bills and the small loans and stuff like that. How much is your house payment? Uh, $550,000.

Okay. That's not out of line. Good. Okay. Um. I rent. I rent. I'm not on mortgage.

That's fine. That's fine. All right. More than anything, what you guys need is a detailed plan and you and your wife working together to stick to that plan. Okay? Because when I start going down the list of things with your household income, you said you make, what did you say, $55,000 or $60,000? $55,000. You make $55,000.

Okay. I know you've got enough to pay food. I know you've got enough to pay food. I know you've got enough to pay lights and water. I know you've got enough to pay your rent. And I know you've got enough to pay the car payment. Yes, sir. And I know you're wasting some money because everybody does, especially when you're first.

Six weeks ago, I was completely irresponsible. Yeah, but that's just normal. That's just normal. That's okay. And this is the last thing to clean up in your process of healing that you're going through. So it's great. I mean, we're just sweeping out the corners here together, brother. It's all good.

You're going to get there. You're going to get there. So a written plan, we're going to put you on a thing called EveryD every dollar which is an app for your phone or your computer um you and your wife together and you're going to start tracking every dollar before it leaves because if we just took a yellow pad right now and we wrote down your payments and we wrote down your income at the top and then you looked at the difference you'd be going where's the rest of that money going? Absolutely. That's what I'm talking about.

When you get organized the way I'm going to teach you to, you're going to feel like you've got a raise. Okay? And the other thing is this. One of the things that we work with a lot of folks that are coming back from addiction and some that are even in it, one of the things you rebuild with your spouse is trust. Yes, yes. And trust is rebuilt on the money side, and communication is increased on the money side better than just about any other area.

So this is going to be a great tool for healing your marriage, you two learning to work together to fight this debt monster together, and there's going to be a lot of communication about where the money is going. You all are going to be talking about it. marriage, you two learning to work together to fight this debt monster together. And there's going to be a lot of communication about where the money's going. Y'all are going to be talking about it. You're going to be making the decisions together. It's going to increase communication and trust in your marriage. So it's going to have some effects on your life that are going to be awesome that hadn't really got anything to do with money.

It's a natural part of right where you are. This is a perfect time for you. So here's what we're going to do. We have a one-year membership to a thing called Financial Peace University. It includes connectivity to your bank for this EveryDollar app on budgeting, which is about a $100 thing. It includes any of the videos of two or three of our classes are all in there. It includes community in there. And here's the most important part.

There's nine lessons that are taught at a local church near you, a bunch of local churches near you in Atlanta. You pick one, and you go to those nine lessons as well on how to handle money. One of those is how to do a budget. One of those is how to get out of debt. One of those is how to work with your spouse about money. And you and your spouse are going to go to those, and I'm going to pay for all of it.

It's free. Oh, man. Okay? So I'm going to be part of your healing. I want to be part of your story because you're a hero. You're winning, and I want to be part of that. I like being around heroes. And then when you're winning at this area and you're working with one of the guys over at your 12-step area or something

and you see one of these guys who's right where you are and you're two years ahead of him, you'll know what to do. You can put him in. You can pay for it and put him in the financial piece. You can do that. You can pay it forward then, okay? Yes, sir. You'll be able to help somebody else once you're not broke anymore. Agreed?

Absolutely. All right. You can do this, man. else once you're not broke anymore, agreed? Absolutely. All right. You can do this, man. And I'm right here. I'm not going anywhere. So if you need some help as you go along, you call me again, okay? Yes, sir. How old are you?

27. Love it. You got this. For my wife and kids, you know, I don't think I'll be able to bounce back. So that building trust in my wife is a huge thing. Yeah, you're bouncing back. You're the kind of guy that does that. You can do it.

You got this. I'm proud of you. Well done. Hold on. Kelly's going to pick up, and she's going to get you signed up and get you into all those classes and all that membership and everything and show you how to do everything. And we got this for you. We're going to walk with you.

I want to be part of this story. I like being part of this story. I like being part of stories when people are winning. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. You see, there's something we know about addicts. We worked with them for 30 years.

100% of them have money problems. You don't get out of it because whatever it is that's eating you on the inside, that you're hooked into, it's going to take all your money eventually. It might not right off the bat, but if you're a gambling addict, you're a porn addict, you're a prescription drug addict, you're cocaine or alcohol, 100% of you end up broke until you get healing for the addiction. 100%. Nobody makes it out. So you've got to beat it.

And Travis is beating it. Y'all pray for him. This is the Dave Ramsey Show. Listen up, my friends at Churchill Mortgage. Want to put some cash back into your pocket? Go to ChurchillMortgage.com today and enter the $3,000 end-of-summer giveaway. Whether you're buying a new home or evaluating your current mortgage, you know I'm going to recommend talking to Churchill first.

I trust these folks to save you money. I'm talking thousands. And the team at Churchill will take great care of you. Churchill Mortgage is the only mortgage company I'm aware of that takes what I teach and applies it to your loan or your refinance. They've helped so many of my listeners and team members by making sure they are in a mortgage that doesn't bust their budget. Go to ChurchillMortgage.com today to learn more. And while you're there, don't forget to enter the end of summer giveaway. Call Churchill Mortgage today at 888-LOAN-200 or online at churchillemortgage.com. This is a paid advertisement

at MLSID 1591 and MLSConsumerAccess.org. Equal housing lender 761 Old Hickory Boulevard, Redwood, Tennessee 37027. Well, one of my favorite people on the planet is on the phone. Over 100 million books sold. Wow. That's hard to fathom, isn't it? For a little guy like me that's not sold that many, I can just tell you that's impressive. And there's a reason. Because he writes to your soul, he writes to your heart, and he writes to your spirit.

And my friend Max Licato is joining us this segment. Hey, Max, how are you, Pastor? I'm great, Dave. It's such a treat to hear your voice. I hope you're doing well. I am awesome. I love, love this new book, and I love the title, Unshakable Hope. Big lighthouse on the front. Way to go.

One of my favorite topics, the power of hope. You're a lighthouse guy. I remember in your office seeing a few paintings and lighthouses scattered around. Am I wrong? Yeah, word got out that I collected them, and then there was too many of them, so I had to get rid of them. It was like they piled in there and took over the place. But, yeah, it was, especially in the early days of what we were doing, we had lighthouses everywhere. Unshakable hope. Why did you write this one?

Yes, sir. Well, you know, hope is in such short supply and and um i am a pastor in fact i'm in year 41 believe it or not of of pastoring in 30 years in the same church and um i've learned through the years to try to listen as i have conversations with people and it seems to me that the lord directs my next book or next theme or next sermon series through conversations. And over a period of about a month, it seemed like I had several conversations with people who were battling the need for hope. Sometimes it was, my marriage has no hope, or my children, my relationship with my kids, I don't have any hope.

And it could even be finances. You know, I don't have any hope. And so I thought, well, I wonder how to help people find hope. And forever I've, not knowingly, but I've found a lot of hope, realized that where I turned for hope was promises in the Bible. And so I wrote this book. It's built on building your life on the promises of God. And so that's the simple idea, Dave, is find a handful of promises that are speaking to you in your life and ponder them and proclaim them and pray them. And rather than build your life on your pain or your problems,

build a life on the promises of God. Does somebody like the Max Lakedo ever shaky in their hope? Well, only every hour. Dave, I think there are some people who have faith and optimism as their default emotions, and those are wonderful people, and I'm not one of those. I wish I were. You're a glass-half-empty guy, are you? I don't believe that.

I don't believe that. I've learned through the years to try to turn to God's faithfulness before I turn to Max's fearfulness. And I think I'm doing better. I honestly do. But I have to work on it. You know, I get tired like everybody. And so I've got a few go-to promises. One of my favorites is Jesus said, Come to me, all you who are weary and heavy laden, and I'll give you rest.

I found myself a couple of days ago just reciting that verse over and over because I was physically tired. I'd had a long weekend, and I just was depleted, had more things to do. And you know what? It worked. It worked. I said, Okay, Lord, you're going to give me rest so I'm going to trust you. It's a mental habit that we have to develop

of first of all we know the promises but then we learn to stand on those promises and believe them. Pastor Max Licato, New York Times bestselling author is with us. His new book is Unshakable Hope, Building Our Lives on the Promises of God.

And when Max says hope, he writes about it in ways that make you understand it, grasp it, and own it. So one of the things I liked as I was flipping through this is the importance to remember that we're made in God's image and how that affects our self-worth. Talk about how that's connected to hope. That's one of the first promises. Maybe it is the first promise in the whole Bible where God says in Genesis 1 and verse 26, he says, let us make mankind in our own image. And in this day and age in which there's so much discussion about self-esteem and self-worth, I think that's the secret right there. And that is Dave Ramsey, Max Locato, every human being that we meet,

every person that we know is made in the image of God. And so I can stand on that as a promise. Now, I may not, you know, I have a long ways to go. Sometimes the image of God within me is buried and needs to be, you know, polished and revealed. And that's all part of growing in our faith. But if I could believe that I don't have to own anything, I don't have to buy anything, I don't have to graduate from anywhere to be more valuable than I already am because I'm made in the image of God. It changes the way I look at myself. And, Dave, I think it changes the way we look at others. We live in a day in which we're so hostile.

We tend to be so hostile toward people with whom we have disagreements. Couldn't we see that even if a person sees their value system or their political system different than I do, they're still people, still people made in the image of God. And so that's a promise I can stand on in my relationships toward others and, most of all, in my view toward myself. And that's an example of the kind of how it changes our lives if we'll build our life on a promise like that. You are a world-class wordsmith, and I noticed this line that definitely is a tweetable line. God resists the proud because the proud resists God. That's good.

Talk through that for a minute. Well, it's interesting. You know, we can tend to have this image of God as he's so, you know, kind of passive or uninvolved or distant. But there's some strong verbs associated with how God hates pride. He abhors pride. He doesn't just dislike it. He hates it. And so why would he hate pride? Why is that such a big issue? And I think the reason is because pride keeps me from pursuing God.

Pride keeps me from bending my knees, from bowing my head, from softening my heart, from lifting up my hands. If I'm a prideful person, then I'm self-dependent and self-centered. And that's just the antithesis of what God wants us to be. He wants us to be God-centered and God-dependent. That's where happiness is. Happiness is not found in the Frank Sinatra song. I did it my way. I mean, maybe a clever line, but there's no happiness there.

The real happiness comes from learning to depend on God. Dave, I've heard your story. I've heard you tell about and be quite transparent about bankruptcy and the challenges, and yet how that drew you closer to God. And your honesty about that is what endears you to so many of us. If we think it's all up to us and we go around puffing out our chest, then we're not going to be very happy. But if we'll humble ourselves before God's mighty hand, then that's where true peace and joy is found. You've been writing about the promises of God for a long time.

I remember a gift book you did 100 years ago, it feels like, that sold a bazillion copies. And I think it was called The Promises of God. Am I right? It was. It was. And it was more of a devotional book. We had a promise every page, and the idea was to give people just a little book they could tuck in their purse or keep in their house and put on the coffee table and every so often just pull it down and read a promise. There's over 7,000 promises in the Bible.

It's over 7,000 promises in the Bible. It's over 7,000, so we could do several of those books and not run out of promises. That was our friend Jack Countryman, if I remember, did that with you. Exactly. Jack Countryman. I go to church with Jack now. He's a good man. Fun stuff. The book is Unshakable Hope from the one and only Max Licato. It's a must- read, believe me. Building our lives on the promises of God. Max, I appreciate you, my friend.

Look forward to seeing you next time you're around town. I only regret that I'm not in the studio there with you. I hope you're doing well. Everything's good, brother. Everything's good. And we'll see you soon in San Antonio. Okay. That's great.

Oh, that's right. Yes, sir. This is the Dave Ramsey Show. The book is Unshakable Hope, Building Our Lives on the Promises of God by Max Licato. Did you know, statistically, when it comes to life insurance and protecting your family, that women are more likely to be uninsured or underinsured than men? This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day.

This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance. They shop the top term life companies to find the lowest rates available. You can compare rates online at zander.com or call 800-356-4282. This is something every family has to deal with. That's zander.com or 800-356-4282.

Thank you for joining us, America. This is the Dave Ramsey Show. In the lobby of Ramsey Solutions, Tim and Kristen are with us. Hey, guys, how are you? Hey, Dave. How are you, Dave? Excited to be here. Well, we're honored to have you.

Where do you guys live? We live in La Porte, Indiana. Okay. South Bend area. Yeah, we're about 20 minutes away from Notre Dame. Gotcha. Very cool. Welcome to Nashville.

Thank you. And all the way down here to do a debt-free screen. Yes, sir. We are. How much did you pay off? $105.55 and 16 cents. Love it. And how long did this take?

33 months. Got it. And your range of income during that time we started it was about 85 to uh 94 when we ended okay cool what do y'all do for a living uh i'm a merchandiser manager for a small family owned chain of grocery stores and i do payroll benefits for the same chain for i've worked for them for 40 years. Wow. Very cool. And he's been 44 years. Did you guys meet there?

We did. Wow. And both still work there. Yes. That's unusual and very cool. Yes. I love it. Very neat.

Look at you. What kind of debt was the $105,000? Well, we had three credit cards. We had a small car loan. We had eight 401K loans between the two of us. We had a Parent PLUS loan and a home equity loan. Wow. You were just normal.

Yes. Had every kind of debt in the world. We loved them. How long have you guys been married? 16 years. 16 years. Okay. And 33 months ago, a little over two and a half years ago, almost three years ago, something happened.

What happened? Well, a couple things happened. We were never really together on our finances, even since we've been married. And one day I just started adding up everything we owed, and you know how you say it takes your breath away? It takes your breath away. And when we discovered that we owed more than we even make in a year, it was pretty eye-opening and scary. And that's what really started it all. So that was the jolt to the system.

Right. And then what did you do? Well, I'll tell you, we really didn't know what to do. We knew we had to do something, though. So we hadn't met you yet, so I immediately took out a home equity loan. Sure. To free up some cash flow. We knew we had to start paying this stuff off.

And believe it or not, it was the loan officer who originated the loan for me that told me about you. Wow. Yeah. So I did a quick, she couldn't remember your last name. She said, there's this guy that gets people out of debt. His name is Dave, but I don't know his last name. I love it. Yeah.

So I went home and did a quick Google search. Of course, you know, your Google ranking is very high. So then we found you and I bought the DVD home study course is where it all started. Very cool. And then after a year, we did the financial peace class. In person? Yes. Okay. So first you did the DVD home study course is where it all started. Very cool. And then after a year, we did the financial peace class. In person? Yes. Okay, so first you did the DVDs at home.

Yeah. And then you did it in person. Actually, we went to two. We went to twice. Oh, that's good. Yeah. I love it. Just to get our batteries recharged.

There you go. It's good for you. Yeah. You keep cycling through and doing it. Yeah, shout out to our coordinatorsators uh grace point church and valpo that was dan and jackie brubaker and then uh in our hometown of la porte we went to agape christian church and justin lisa denger neat yeah great very neat cool good for you guys so what do you tell people the key to getting out of debt is you pay off 105 000 in 33 months you did it

you're it's not theory you actually did it what do you do tell people what to do well i um thought a budget was writing down what to do when and just hoping i had enough money to buy groceries or whatever but the first time was budgeting i had been in debt since i was 17 years old so 40 years in debt and um you know just the budget and being on the same page with him yeah that i mean there's so many little things that go into it all but for me the most important thing was being on the same page with christian every dollar really yeah when it's amazing that's that's one thing that really came out of this for me is is what you can do when you're both in agreement and you're together. And you're focused.

It's pretty overwhelming. We have a good why. We want to move to Ohio in a few years. Oh, that's cool. We have a good why. Wow, I don't know how that store chain is going to operate without you two. They're going to have to get by. 90 years between the two of you working there.

My goodness, yeah. Wow. They'll be in being a mess. Well, good job, you guys. Very well done. So you did the class. You used the EveryDollar app. I mean, you did it all.

You're amazing. It's all due to you. Well, I didn't do any of it. You paid it all. You showed us the way to get there, though. Proud of you. You gave us the roadmap. Very proud of you.

Very well done. So you're what, 57 Proud of you. You gave us the roadmap. Very proud of you. Very well done. So you're what, 57, 58? 57. Yeah, I'm 60. I'll be 61 on Monday. Okay, so you all are about our age. Very good. And we did have 401ks.

I looked at him like he was crazy when he told me to stop it. So we haven't been putting in for three years. But at least we do have some, you know. A little bit of savings. A little bit more than what some people do. Now it's time to just start back on that. Yeah, exactly right. You're exactly right.

We're working on baby step three right now. We should be done by Christmas. And then you'll tear into that 401k. We will. Well, we're going to do 3B. Oh. Yeah, we're going to do 3B for a couple years so we can build up a really good down payment, maybe get close to being paying cash.

Ah, there you go. We are going to start the 401Ks back up, though. Good for you. Well done, you guys! Great job! Thank you. A copy of Chris Hogan's book, Retire Inspired, and that's going to be the next chapter in your story, as you just said.

That's your plan on it all right now. That's excellent. Very good. And be millionaires in the process? I think you will be, it sounds like. Very well done. Tim and Kristen, South process. I think you will be, it sounds like. I hope so. Very well done. Tim and Kristen, South Bend, Indiana area, $105,000 paid off in 33 months, making $85,000 to $94,000. Count it down. Let's hear a debt-free scream. Ready, baby?

Uh-huh. Three, two, one. We're debt-free! We're debt free! This is how it's done. Love it. Well done, you guys. Very, very well done.

Joel is with us in Salt Lake City. Hi, Joel. How are you? How are you, Dave? Better than I deserve. What's up? So I'm hoping you can help me work out getting to a goal of mine. I'm going to be buying a business where I work within the next year, probably middle of 2019. And the business is going to cost about half a million dollars, a little bit more.

And we worked out terms to be 25% down. And the remainder is going to be paid out as a percentage of the bottom line until I pay off the balance. Okay. And my wife and I finished FPU earlier this year. And we're in four, five, and six. And we have a house. we have a rental property, and the rental property actually has enough equity to cover the 25% down payment.

But I'm just wondering if we should do that. Should we sell the rental and use it as a down payment? Should we sell the rental and use that equity to pay down our house for baby step six and then save up for the business in a different way? I'm just wondering if you can help me work it out. Well, I mean, if you want to save up and do it, that's fine. If you want to sell the rental, that's fine. I would not borrow the money to put the down payment. No, no, we're not going to do that. Okay. So, I mean, what is your income now? I'm ramping up right now, and so it's going to be in the mid-100s.

What is the net profit of this business that you're buying? The net profit is, I'd say, a quarter of a million or 300. Okay. And so you're promising them out them out of 375 000 a year until the 500 000 is paid right okay right so we should be able to do it pretty quickly yeah okay and then that leaves you considerably more than that to do other things with exactly okay all right very cool very cool i would definitely do that but as far as the down payment part goes, you know, the 25% either sell the rental or save it up. Can you save it up by next summer? I'm not sure because I am ramping up.

And, I mean, we could probably live off less than half of what I'll be making to save up. Yeah, yeah. Well, I'll tell you, I think that I want to own this business more than I want to own a rental. And that's where I would do. So if I've got to choose, I'll sell the rental and buy the business because it sounds like it's a great deal. This is The Dave Ramsey Show. andrews in mesa arizona welcome to the dave ramsey show andrew hey dave how's it going better than i. What's up in your world? Perfect, brother. So quick question for you. Single family income, or yeah, we make a single family income of $32,000 a year.

Me, my wife, and our four, our three kids, sorry, jumping the gun there, ages, we're both 24 with our little ones, and we've done through three, baby step three. We're now on 3B, just started 3B. Question is, I'm a huge car guy. When exactly would I look into the possibility of maybe a $1,000 little beater car to kind of work on if that's even a possibility? Well, it would be after baby step three, and of course you pay cash for whatever you're doing with it, and your $1,000 is the answer to the equation.

It's not $10,000 in your situation, because with four kids at 24 years old and a $30-something income, $10,000 is out of line. You've got some other stuff you need to be doing, like kids' college savings and other things, right? Right, correct. But $1,000 is not a deal breaker. Okay. Right, and we do have that in the car payment budget,

and then we do have $10,000 for our three, six months and our $1,000 emergency fund at the moment. Okay, well, you just save up and pay for it. It's just something your family, you want to purchase. And it sounds like you're the kind of guy who would probably turn a wrench on the thing and then sell it and then do it again. That'd be awesome, yes. Yeah, make a little money on it, move up, sell it, do it again, have a little fun with

it, and enjoy the process. So, yeah, that's the kind of thing I would do. But, yeah, that price range in your situation does make sense. A lot of these answers, Andrew, and other folks, you know, listening in on stuff like this is ratios. Does it do damage? Does it take up so much of the money that should be used to other things? But when it's a small amount ratio-wise to what you're doing,

then there you are. You know, so, you know, you make $150,000 a year. The level of car that you can drive is different than if you make $15 million a year. You know, I've got a buddy of mine who makes $15 million a year. He bought a $400,000 car. It's kind of weird emotionally to think about, you know i got a buddy of mine makes 15 million a year he bought a 400 000 car it's kind of weird emotionally to think about you know dad gum man that's a nice car um 400 000 for a car but that's less than ratio to his income than almost anybody spends on a car

it's a very small percentage of his income he He makes $15 million a year. Think about it. And so it's kind of like a guy making $150,000 buying a $4,000 car. You see the ratio. I mean, that's about what it is. I think unless I drop to zero there, I might have dropped to zero. But, I mean, the point is that's a way you can decide if some of these things are violating common sense or not is the ratio thing, a percentage of your overall world. Kyra is with us in San Antonio. Hi, Kyra.

How are you? Hi, Dave. Sierra. I'm so sorry. I'm sorry. My bad. I'm kidding. Kelly even put it on here correctly, and I messed it up.

So can't even blame kelly on this one we like to blame kelly but we can't on this one so anyway what's up sierra so my husband and i have 843 000 in debt um 20 only 20 000 of it is personal debt. The other $823,000 is a loan that he took out before we were married to buy a million-dollar building that he currently runs his business out of. He bought it about six years ago. I have put together a debt snowball plan based on our income of our take-home every month between the two of us is somewhere between $10,000 and $15,000. And so I've put together a plan recently that would get us out of that entire $843,000 in five years. Okay, I got to stop you though, okay? Yes, sir.

No more than your income is, how does he justify a million-dollar investment to run this business that's underperforming in? I wish I had an answer to that question. That's a question I've asked myself. I don't know. He's not making

enough to justify a million-dollar building. No, not even close. Sell it. Okay. I'll get you out of debt. No, yes. Well, you're not going to do that.

So, I mean, because he's not going to do that, because he's not thinking logically and he's running his business poorly. So I can't really help you in this situation. Thanks for the call. Andrew's with us in Kansas City. Hi, Andrew. How are you? Hey, Dave. How are you doing today? Better than I deserve. What's up? I have a couple questions for you. I'll try to make it as brief as possible. Me and my wife are on baby step two. We have $27,152 in debt. About $14,500 of that is a vehicle.

We have an annual income of $55,200. And I was wondering if we should sell the car. Do you like the car? I'm a Chevy guy, and it's a vault wagon so is that a no yes sir okay well here's the thing okay it's half your dad as you said right yeah yeah and um the rule of thumb that i use is twofold if you like the car and you want to fight your way out of debt can you be debtfree except the house in two years or less? And the answer here is yes.

And is the car, all of your cars, all things with wheels and motors added together, less than half your annual income? What's your other car worth? The other car I'm driving is a beater. I think it's roughly... So your vehicles are considerably less than half your annual income. Yeah, I would say so. Yeah, so, you know, it doesn't meet the guidelines to say you have to sell it or you're stupid.

Yeah. But if you want to sell it because I don't like Volkswagens, that's okay. Well, it'll save us about roughly $600 in the long run. I'm sorry, not $600, $6,000 in the long run. And that's including if we were to buy something like $1,000 to $2,000 just to get out of that loan, out of that vehicle. Yeah, but here's the thing. If you sell the vehicle, then you're out of debt in one year. And in two years, you're looking at cars.

Yeah. And you're going to move up in cars with cash because you don't need to both be driving a $1,000 car when you're debt-free making $55,000. Right. And so you're going to move back up in car, but you don't like this car, so you're probably selling it anyway. It's a nice car.

Don't get me wrong. Germans make nice cars, but again, I'm a Chevy man, and I want to get out of debt as fast as possible also. Okay. Well, if you want to, what does she say? Her car or yours? It's her car. She's ready to sell it, honestly, also.

We both like the car, but we both want to get out of debt also. The math doesn't say you have to sell it. But if you want to sell it and accelerate it, that's not dumb. It's a good thing to be out of debt. But just know that you're probably going to pay cash for a car in the similar price range within the next two to three years. That's where you're going to be. So that's okay. That's fine.

Nothing wrong with that. Hey, thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. We appreciate you being here. Elizabeth is on YouTube. How many months does it take the normal person to get the hang of a budget?

Three. I've done a budget for two months now. I still haven't gotten it right yet. I feel like a total failure. No, I mean, the first month you completely screw it up, and you have an emergency budget committee meeting almost every night trying to get it adjusted because you leave things out, you go over, you under-guess, you think you don't spend as much as you spend,

and you're constantly adjusting the first month. The second month, you have an emergency budget committee meeting about three or four times during the month. The third month, maybe one or two. And by the end of the third month, you should pretty well have the hang of it because most of it's trial and error on the amounts. Actually, operating the budget is not that difficult, but it's just trial and error on the amounts to get them right so that you can breathe while you stick to it. That simple.

Hey, man, thanks for following us on YouTube. We appreciate it. This is the Dave Ramsey Show. I'm excited to announce that we're now carrying on 600 radio stations across the country. To find one near you, head to DaveRamney.com slash show.