The Ramsey Show - App - Life is Awesome When the Burden of Debt Is Gone (Hour 1)

Episode Date: December 4, 2018

The show about you

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. Well, thank you, America. We're glad you're listening. We appreciate you listening here and, for that matter, around the world. The phone number here is 888-825-5225. That's 888-825-5225 as we answer your questions about your life and your money. So we started this show almost 27 years ago as, of course, a talk radio show,

which it is now the third largest talk radio show in North America, Rush Limbaugh being number one, Sean Hannity being number two. We're on 605 radio stations, and there's roughly 10.1 million of you listening on those radio stations. Thank you for that. We appreciate that. That's how this whole thing began. Now there's about a million of you watching this thing on YouTube streaming every day

and watching on the app and the Dave Ramsey Show app and all that kind of stuff. And then somebody invented this thing called podcasting a couple of years back. We put the entire show on a podcast every day. And so you download. If you don't do podcasts and you don't know this but you download and listen to it on your phone and people that stood on trips or while they're working out or doing whatever sometimes while they're working and so forth and it turns out that there's a little over 5 million of you now listening on the podcast as well so it's a little

over 15 up approaching 16 million of you hanging out with us every day, every week. And we just got in information this morning that out of all the podcasts in the entire world, we're number five. Pretty cool. So the most downloaded podcasts out there, we rank number five. And so thank you. We appreciate that. That's Apple Charts, the top 20 most downloaded podcasts of the year. And there we show up.

Actually, the thing I read this morning said number five. The thing you handed me, James, says number four. So anyway, we're somewhere right in there. We're not number one, but we're right up there close. Thank you. And that's because of you guys telling everybody to listen. And however you listen, we're glad you're there. We appreciate it.

And we appreciate you listening to our radio stations, and we love radio, and we appreciate using whatever technology you need to use to be able to get this information. So jump in and do just that. Phone number here is 888-825-5225. Priscilla is with us in Tampa, Florida. Hi, Priscilla. How are you? Hi, I'm good.

My question to you is I know you talk a lot about when it comes to budgeting and your money, that you need to tell it where to go rather than wondering where it went at the end of the month. Would you say when it comes to goal setting that the same applies to time management, that it's important to tell your time where to go rather than wondering where it went. For that matter, every aspect of your life, the more of it you do on purpose, the more of it you're going to have high quality at. In other words, if you're intentional like that about your marriage or you're intentional about raising that baby that's sitting in your lap

or you're intentional about whatever, you're going to set specific measurements by which you say, I'm winning. Okay. And, you know, if you want to run a marathon, then that would be winning. You complete the marathon. You do the training and the steps to get there. But the goal has a very specific thing. I mean, you get this child, and specifically I wanted ours to leave and stay gone

until they brought back grandbabies. And so I wanted to raise children that could become adults, not just be good children and be critical thinking skills and so forth. So you set goals in every area of your life. Some of them are a little bit more difficult to measure with math, but it's something that you can do very easily. Okay. How do you stick to it?

What are good ways to stick to those goals or stick to the budget or stick to those things? You know, there's really two things that motivate us, and we're all pretty much that way, and it's old basic psychology 101, and it's pain and pleasure. The pain that happens if I don't stick to it, if I don't stick to my diet, I end up severely overweight and on the operating table having a biscuit ectomy in my heart because of too many biscuits. So if I don't stick to it, I get pain, right? If I don't take care of my marriage, I get pain called marital problems. If I don't take care of my, if I don't spend time, pay attention to these kids, they end up, you know, being taken care of by somebody else. I get pain in the rehab center or something like that. And so when you get pain as one motivator is your why. So what happens when you don't manage your time? Well, I feel disorganized. I feel frustrated. My stress level goes up and

I'm working on the wrong things. I end up spending time on stupid things, and then I have an emotional hangover called regret, right? And then the pleasure side is when I do this right, I feel so much better. When I do this right with money, I have money. When I manage the time right, wow, I have this sense of accomplishment. I have this sense of I am achieving. I'm doing the right things with every hour to squeeze the zest out of this life that I can. And I'm going to play hard. I'm going to work hard. And I'm going to do it intentional.

Even when I'm relaxing, I'm going to do that on purpose. I'm going to budget an hour to sit on the back porch with a cup of coffee and prayer time with my Bible in my lap. I'm going to budget that in my time budget. So pain and pleasure are what motivate me. What about you? You're absolutely right. I guess I never really thought about it like that.

But, yeah, I would agree that it would be that. Yeah. And so, you know, the thing is that one of the things I wrote in an early book, and it's really a bad phrase, but I still like it, and I get quoted on it, but it's poorly worded. But only when the pain of same exceeds the pain of change will you change. If only the pain of where you're sitting is big enough. And, you know, so when people call me and go, like, I'm ready ready to get out of debt that's because they got disgusted with where they are enough to go through i mean the pain of sitting in the debt is greater than the pain it takes to sell stuff and work an extra job and get on a

budget to get out of debt now they're ready to change but only then do we change very seldom do we just rise up and change uh sometimes we do but that's the most noble parts of ourselves when we're able to do that. Most of the time, it's like pain kicks your butt, and you go, I am so sick of being frustrated and stressed out, I'm going to manage my time. I am so sick of feeling fat. I'm going to back away from the chocolate chip cookies. That's me talking to me right there. And so, you know, I mean, I'm so sick of dot, dot, dot. I'm sick and tired of being sick and tired.

I've had it. Les Brown, the great motivator, says that phrase. And he says, when you do that, when you have that I've had it moment, when the pain of where you are, the pain of same exceeds the pain of change, only then will you change. You have an I've had it moment. That's a wonderful question. Thank you, Priscilla. Appreciate you bringing that up. And then when you set the goals, folks, we'll take that a step further past our question.

When you set the goals, you start asking yourself, what has to be true about my life that's not true now for me to get to be one of those, to do one of those things? What has to be true? When we started having kids, I started realizing, I don't know how to raise kids. They didn't come with a manual. They didn't hand me a manual how to work on these little critters. And so I had to read all the manuals. I started reading parenting books left and right. I started listening to focus on the family so I could focus on my family and all that kind of stuff.

So you have to learn. You have to learn what has to be true. I have to know something that I don't know today in order to be something tomorrow that I'm not today. And have things tomorrow that I don't have today in my life. This is The Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot

of ways. Both families have two working parents and a couple of young kids. Each has dead and has struggled to make ends meet, but they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen. Their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance.

Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Thank you for joining us, America. We're glad you are here. Fran is with us in Orlando. Hi, Fran. How are you?

Hi, I'm doing good. Thank you so much for asking. I actually wanted your opinion on, I'm actually moving back with family members to Providence, Rhode Island, and I'm thinking about selling my car. I got it appraised with a well-known company called Carvana, with a really well-known company called Carvana, and they're giving me the appraised value of $1,585 for a Chevy Spark 2013.

I think that's pretty good because I bought the car fairly cheap. With that money, I can actually pay. I have one credit card. I can pay $1,102.73 with that money. I can also pay a few of the extra bills that I have left and still have a little bit of money left so that I can buy myself a nice winter jacket. What do you think? Do you think that I should just sell the car and make the move to Rhode Island and just be without a car?

Because it's a little easier to not have a car in Rhode Island than it is in Orlando, Florida. Okay. And what are you going to be doing in Rhode Island, kiddo? I'm actually going to go back to school. All my family lives up there. I currently work as a body piercer here in Orlando, Florida, and I already talked to a tattoo shop over there, and I'm literally just going to work for him with the experience that I know.

Okay. And you're going to be studying what in school? I'm a little bit stuck between a rock and a hard place. I really don't know what I want to do. So while I'm in that transition phase, I just really wanted support from my family. Okay, so you're not going to school. I thought you said you were going to school. I am going to school.

It's just buckling down. I kind of had to let school go here in Orlando, Florida, because I just couldn't afford it anymore. I got that part. I'm saying you're planning on going to school in Rhode Island. What are you going to study? I'm thinking education. Okay. Yeah, you need to have a real solid plan of exactly what you're going to do and why you're doing it

before you go to the trouble to go to school and the expense of going to school. So are you going to be living with your parents? I'm actually going to be living with my aunt. Okay. And are you on a bus line or some kind of a mass transit situation there that you can handle not having a car? Actually, Rhode Island, everything, it's so small, everything's so close that I can't, I wouldn't mind riding the bus.

Okay. All right. So you've got mass transit available to you that's reasonable in your mind? Yes, I do. I have everything planned out. I just really needed your opinion on it. I think all of that's fine. My only question would be,

there's nothing wrong with Carvana. They're a fine company. They're a dealership, and dealers always give you a wholesale price on a car that they think they can sell it and make more on it. And so if they think they can sell it and make more, I always wonder if you can. But overall, your plan is fine. I wonder if you could sell the car to an individual for $2,000 is what I'm saying. And that $600 would be a lot of difference in your life right now, that $500 difference.

So I might consider trying to find an individual to buy it on Craigslist for a couple grand and just see if you can get a little bit more money out of it. But if not, the Carvana plan will work just fine. Hey, thanks for the call. James is with us in Columbus, Ohio. Hi, James. How are you? Hi, sir.

Thank you for taking my call. Sure. What's up? I got a question for you. I have done things backwards. I just bought your book, and I bought books for all my kids. Thank you. We paid our house off already.

We're 56 years old. I have approximately about $25,000 left in debt. I have no credit cards, no other debt that way. But my question is, should I stop my retirement and go ahead and tackle that debt and get it kicked out, and then that way I could max out all retirement? Yeah, what's your household income? Well, I approximately make about $110,000 a year, and my wife makes about $15,000 to $20,000 right now. She's getting ready to go into her field that she went to school for.

What will she be making in that? She was making approximately about $40,000 a year. Okay, great. So making $150,000, how fast do you pay off $25,000 if you temporarily stop retirement? I think I could pay it off in a year. I think you can pay it off in eight months.

Maybe six. Yeah, we could hammer it pretty good. I mean, $4,000 a month is six months. Okay. That's beans and rice. But I don't want you out of that retirement for very long. You're 56. You want to get right back at it, right?

Right, right. And you don't have a house payment, so I know you can do $4,000 a month. See, I'm doing this calculation based on $150,000 a year, which you don't have yet. Correct. Because she's getting ready to go there. So I'm not using your current budget. I'm using $150,000, $25,000, $4,000 a month is the equivalent of $48,000 a year out of $150,000. You could do that, that rate.

Yes, sir. And so I'm saying six months. Yeah, let's stop it for six months and knock it out and then jump in with both feet and fill up everything and retire a millionaire. Okay. I love it. That's my question. Thank you, sir. Nina is with us.

Nina's in Orlando, Florida. Hi, Nina. How are you? I'm doing good, Dave. How are you? Better than I deserve. What's up? So I was calling to just kind of get some advice from you um i'm currently 28 i'll be 29

in a couple weeks and um i have a five-year-old son that is has a disability um for the past almost like year and a half i haven't been working just kind of taking care of him um so i used to make between 60 to 65000 to $65,000 a year. It went down to making absolutely nothing, and I made some really poor decisions, and I'm really deep in debt right now. So my question is, is that this coming Friday I'm actually going to be starting a new job where I'm going to be making approximately $35,000 a year, but I just don't know where to start, and what I'm scared of is I'm scared of, like, walking in there and all of a sudden getting a check and going back to living like I was making a lot more money than what I'm making right now, and I just kind of wanted your advice on that.

So you're single? Yes. And you have a baby that's how old? He's five. all right and if you used to make 60 why are you taking a job now that makes only 35 well i'm originally from new jersey so the pay rate is way different in new jersey versus florida um but when i was making 60 to 65 thousand dollars a year i was paying a whole lot of money year. I was paying a whole lot of money in rent. I was paying a whole lot of money just on living.

What were you doing? I used to work in sales. Okay. There are sales jobs in Florida that are not half of New Jersey. The pay rate of Orlando is not half of New Jersey on anything. So that's just not accurate. So sales, anybody who knows how to sell can make money. And so has the new job got upside where you're selling?

Well, no. So the new job is strictly customer service, but there is potential for me to move into another department where I will be doing sales and making a commission. But it's just where I got hired, I went to a hiring event, and I kind of just took, like, the first thing that they had available. That's what I thought. And so you settled. Okay.

I just want you to make more money because I think you've proven that you can make $60,000, and we're not blaming that on Jersey versus Florida. I'm blaming that on your job selection. So let's move back towards sales because if you know how to sell, kiddo, you can always make some good money. Selling is one of the best paid professions out there. You've got a lot of opportunity there. So to answer your question, the way you control the paycheck, whether it's 35 or the 65 I want you to go make, either one, you tell the money what to do on paper before the month begins.

And once you've told the money what to do on paper, then that paper is the boss of you. It's called your budget. You're the boss of it until you get it down. Remember when you were a little kid and you said, you're not the boss of me? Yes. Well, that's the deal here.

You're the boss of that piece of paper until you get it written out. And once you get it written out, then it's the boss of you. It's your map on how to go to Disneyland. It's your map on how to go to winning land where you get to win with money. And if you do something with money other than what you planned to do, then you're being a child again. And you're not a child anymore. Now you're an adult. You're raising a child.

You can do this. You absolutely can do this. I can tell you can do this by the way the tone of your voice is. You're ready to do this right for the first time in your life. I'm going to help you. I want you to hold on. I'm going to give you a copy of the book, The Total Money Makeover. I'm going to show you every step of what you need to do and jump online and download the app for your phone called EveryDollar.

It's a free budgeting app. It'll help you put your budget together. And then you tell this money what to do. You make this money behave. That's what's necessary. 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 healthcare costs. Christian Healthcare 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 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. We love having visitors in the lobby to do their debt-free scream. We love it even more when they're not visitors in their family. Family members of the Ramsey Solutions family, that is. Melody Sutherland and her husband Kirk are with us here to do their debt-free scream. Melody's been on the team here for about three years as one of our sponsorship advisors.

So congratulations, you guys. Thanks, Dave. You did it. We did it. We did it. So how much debt have you paid off? I paid off $71,861 and cash flowed $32,800. What was the $32,800?

Our wedding, our honeymoon. Just a little wedding. A little wedding. Okay. And how long did all of this take? Seven and a half years. Whoa. Okay.

And your range of income during that time? So at the very beginning, I ran a college that was roughly around $20,000. I was a home health aide for my grandparents and a substitute tot. And all the way to now. Okay. And your household income now is a good deal more than that. We're not going to put you on the spot because your team members are here right in front of you. The other folks are anonymous, so it's okay.

But, yeah. Well, congratulations, you guys. Thank you. So seven and a half years. How long have you two been married? A whopping six months. Whoa. Okay. so you got married after you came here. Yeah.

Of course. Okay, wow. And so that's part of the $33,000 to be done. So whose debt was this? All mine, Dave. All yours. So, Kirk, you just married into this mess. I did. It's just a hot mess. It was, but I welcomed it.

I love it. I love it. Well, congratulations. Okay, so how much have you done in the last six months? We did $12,000. $12,000 in six months. Okay. Wow. So you did $60,000 before that.

Did you save separately and then pooled it together for the wedding? Yes. Okay, so that was a big bunch of it the prior six months then. Yeah. Okay. Way to go, you guys. Thanks. You did it and you work here.

Yes. So what kind of debt was this? It was all student loans. Every bit of it? Every bit of it was private Christian school student loans. Cool. And what's your degree in? Teaching.

Ah, very good. Good. So how's it feel? Oh, my gosh. The burden is just awesome. Completely change of life, completely change of lifestyle. Just feel all together just a different person. And I feel awesome.

The burden is gone. Yeah. Well, there's enough peer pressure around here to get you out of debt. That's for sure. All positive. But I mean, it's everybody's like, when around here to get you out of debt. That's for sure. All positive. But I mean, it's everybody's like, when are you going to get out of debt? It's not like we require it to work here, but everybody's doing it, you know? Yeah. It's just basically the team members and you just thank you for the continued opportunity to be here

and the accountability to challenge and encouragement in it has been a vital role within it. So what do you tell people the key to getting out of debt is? I would say just take a step at a time. Take a step at a time, even if it's a leap at a time or just a... Because part of this seven and a half years, you were baby steps, little steps. Little steps, yeah. I just tried to have a little bit of lifestyle. I didn't even have a background of nearly knowing financial education in general and so i had to learn that in

my lifestyle to be able to build uh you know basically now we want to be able to build wealth and have the lifestyle to do that yeah well you're on your way you'll be everyday millionaires now thanks yeah we're excited i'll give you a copy of the book but you're already getting one so because you work here so there you go we'll give you a copy either way but so very very cool so wow what do you tell people the key is then one step at a time one step at a time and just i think doesn't happen overnight yeah yeah and who were your biggest cheerleaders oh gosh my team this place uh you truly your parents for sure my parents started it i had accountability back in minnesota that started it got me fascinated with who you were and then as i came here being able to have people

who at times you know it's not fun to hear some of that stuff but at the same time they're keeping you accountable on the straight and narrow and saying hey do you want to be out of debt or do you want to go do you know xyz and have fun and um anyone from our Ramsey education team, Entree leadership team, leaders, and just an opportunity to be here as well. I think the environment is everything that's been helpful and actually doing what your budget says. So when you lay out a budget, actually do what it says. Don't just have a plan. You can't just lay it to the side and it magically happens. You've got to let it be the boss of you. And for me, I've needed people to keep me accountable in that and to actually meet with them for them to say no you

got to stay on the train or no you can't purchase this like to be able to put that toward debt so so kirk how long ago did you all start dating uh it's been about three years before yeah so i mean you had to connect pretty quick that she was on a mission yeah for sure i mean what was that like this woman's crazy i didn't think she was crazy but at one point she she told me she didn't want to get married until she was debt free which i thought was crazy just because yeah i mean i'm going to be on your team helping you along the along the way so um i started saving up money on myself. I started selling stuff on eBay to buy a ring. I saved up enough money for a ring and bands and decided that getting married while you still had debt was the best idea. You convinced her, dude. I did. Well done. I did. I will say sometimes it

was really tough. I'm a very high driven personality and it was really tough to sometimes receive his help and to receive that encouragement. And it really did make me realize it's okay to receive that. I felt like because I and know that you don't have to do it alone, but you still need to be responsible. Whether you're educated or not, you're still responsible for getting out of the burden of debt and continue to move forward. I love it. A bunch of your team down here to cheer you on as well. So well done.

It's Kirk and Melody. $72,000 paid off in seven and a half years, making $20,000 up to now. Got it married six months ago. Cash flow to $33,000 wedding. Great story. Count it down. Let's hear your debt-free scream.

Three, two, one. We're debt-free! We're debt-free! Yeah! Woo-hoo-hoo! Love it, love it, love it. Well done, you two. Very well done.

Man, that's fabulous. Oh, man. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more.

Use the promo code RAMSY to get the best deal. Trish is in Nebraska. The only debt we have is on farmland and pasture that we purchased back in 2013. We took out two separate loans to purchase the land, one through the bank, 20-year fixed, and one through the FSA as a first-time farmer loan with an interest rate of 1.5%. We owe a total of $350,000. Should we consider what we owe on the land as mortgage debt or regular debt as we work through the baby steps? Well, it's certainly mortgage debt. It's real estate debt. Real estate debt all goes in baby step six,

whether it's rental real estate, a farm, or anything else. You just put it all in there. And generally, you're going to pay off your personal residence first in baby step six before you pay off other properties that you have. But rental properties and second homes, whatever you've got that you're going to keep. It goes into baby step six, and you work it out there. And $350,000 is pretty much a home mortgage. So you've just got to get her knocked out as fast as you can,

just like you would a home mortgage, the same exact scenario. And I'm going to pay off the smallest one first, even if it's the lowest interest rate, unless they're fairly close in amount. And if they're fairly close in amount, if it's roughly split 50-50, and you know, you got 150, 175,000 at one and a half, I'm going to let that one be my last one, and then go from there. So yeah, that's the steps that you take and the thing the baby steps work this way that you want to just do a clear path you want a game plan for the execution of your energy as you start going crazy and you start working extra and you start selling stuff and money starts flowing your way what are you going to do with it? And that's what the baby steps tell us is where, which bucket to drop that money in.

And, uh, it's a progressive thing that lays a foundation and then builds the house and then puts the roof on it from a financial planning perspective. And that's why so many people have become millionaires, not only become debt free, but become millionaires doing this stuff over the last 15 or 20 years. This is the Dave Ramsey Show. Thank you. Thanks for joining us. Brandon is in Philadelphia. Hi, Brandon. Welcome to the Dave Ramsey Show. Hi there, Dave. How are you doing? Better than I deserve. What's up? So I'm currently a college student. My parents have been a true blessing, and they've given me a 529,

and that combined with me applying to be an RA means that I won't graduate with any debt, hopefully. I currently have about $15,000 invested across the four different types of mutual funds that you recommend. And I do have a small 401k for my job over the summer and a very small amount, only about $2,000 in a Roth. And I really would like to start expanding on that and take advantage of the compounding interest since I'm only 19 years old. And I was wondering how much I should put in that Roth IRA or if you had any other recommendations. Well, you're a rock star.

You're on fire, and you're thinking about stuff that very few 19-year-olds are thinking about, so you're going to be wealthy without a doubt. Thank you very much. I appreciate that. You're being very, very smart in how you're looking at all of this. I probably wouldn't. I want you to graduate from school debt-free more than I want you to have compound interest in the next two years. Okay.

And so when you graduate from school, you're going to have plenty of money, it sounds like, and you'll be able to invest aggressively, and you'll be able to move, and you'll be able to move and you'll be able to buy a house and you'll be able to get your life started because you're going to have a pile of money. You are a better investment as far as compound interest and rate of return than a mutual fund is. And what I mean by that, I'm not just being complimentary, what I mean by that is, what are you studying?

I'm double majoring in business management and finance. Okay. With those degrees and what you learn while getting those degrees, you are light years more valuable than you were when you came out of high school. And so what you spend on those degrees, the return on investment, is going to be much larger than a mutual fund. Do you see what I'm saying? Yeah, that makes sense.

And so your income going up as a result of your knowledge base and your degrees. And so, and going with the fact that you're a go-getter as well. So all of that to say, I'm 1,000% more concerned that you graduate and that you graduate 100% debt-free to the point that I'm okay if you miss out on a couple of years of compound interest just because that money's piled up there and accessible to you. If you want to do a Roth, that's okay. I mean, you could put $5,500 in a Roth. You'd still have $10,000 laying around. It's not the end of the world, and it like you're still making money uh to add to this and so but but but never drain it never invest down so low leaving your cash balance so low that there's any possible chance that you don't get through school and so

what i might do is i might just add up every dollar it takes to get through school, subtract the 529 money from that because that money is probably not going anywhere, and then only invest what's above those numbers. Like how much is in the 529? I'm not sure off the top of my head, but I know it's around $80,000 if I had to take an estimate. Okay. And then so let's add up what room, board, books, and tuition is going to be through the end. And let's say... It's going to be about $91,000 probably.

Okay. And you've got $15,000. Correct. Okay. So see, that gets us through. And so above the $15,000, we might want to start talking about doing some investing. So probably not going to invest right now. I would rather you have that insurance policy in case you stub your toe and can't work

or something happens between now and graduation. I don't want you to get to the end and have Roth IRAs and student loan debt. Yeah, that makes sense. That's what I'm saying. So all of that's my speech. So I'm going to be real conservative in that regard. So thanks. We appreciate it.

Good job, man. What a sharp 19-year-old. Open phones at 888-825-5225. I'm a 59-year-old, so I didn't get that figured out. Jessica is with us in Orlando. Hi, Jessica. How are you? Hi, I'm doing good.

How are you? Better than I deserve. What's up? All right. Yes, so me and my husband are both debt-free, but we have not started saving for our retirement. Okay. And I'm 30. He's 32.

Good. I did start a Roth IRA a couple of years ago, but there's only about $2,000 in there. So I haven't been contributing enough to it. Currently, I do not work. I'm staying home with my one-year-old. I have a one-and-a-half-year-old, and now I am expecting another one coming next year. Yay. And my husband works full-time.

Yeah. So my husband works, and he's the sole provider right now. And what I was wondering is, when we did the math, we could contribute. He was able to receive a lot more clients in his job that he has. He was able to bump his income from $60,000 after taxes to $104,000 after taxes. Way to go. Yeah, now he's doing great and he's able to take care of us. And the plan is for me to go back to work within a couple of years.

Okay. So we'll have that extra income, but should we put money towards two IRAs starting now, which it would be probably in there for a good 35 years or so, or maybe a little longer. Yeah, what we tell folks to do, Jessica, is this in your situation. I want you to be debt-free, which you are, except your home, right? No, we have bought our home. And it's paid for?

Yeah, it is paid for. We were able to pay cash from my husband's parents' home. Okay, so you're 100% debt-free and you have $100,000 of your take-home pay. Wonderful. Wow. Well, we tell folks to walk up the baby steps. Do you have an emergency fund of three to six months of expenses? Yes, we do.

Good. Then it's time for you to be maxing out not just merely doing an ira you've got your emergency fund in place you don't have any bills i mean you're you know you got money coming out your ears so you need to be maxing out everything does he have a 401k available he doesn't know he's self-employed okay Okay. Then does he have employees? He does. Okay. How many?

He just has one. And how long has the employee been with him? They're fairly new since he's gotten his new. He's needed the hand since he's gotten new. Okay. I want you guys to sit down with a SmartVestor Pro, and you can, at a minimum, max out two Roth IRAs. That's $5,500 each. And then on top of that, he can either do a SEP or a simple IRA,

which is a 401K for small business, in addition to the two Roth IRAs. But you need to be putting as much money as you possibly can, maxed out. I mean, you ought to be able to put $10,000, $20,000. $11,000 is the two Roths. That's a minimum. In addition to that, you can do a SEP for a couple of more years before that other employee kicks in, or he can do a simple IRA, which is a 401k for small business, put another $18,000 away.

So that would be putting $30,000 away, $2,500 a month. And, man, you start doing that, you're going to be multimillionaires. You're going to be in really, really good shape. And he's making good money. He's doing really well. And you guys have done a fabulous job, 100% debt-free at your age. Well done. So just click SmartVestor at DaveRamsey.com,

and it will drop down a list of the SmartVestor pros in your area when you fill out what you're doing, when you fill out your stuff, and then you pick a SmartVestor pro to sit down with or more and interview them. And what you're looking for is someone with the heart of a teacher, someone that will teach you about the money and teach you about the investing. You do not want to invest with somebody that's slick. You don't want to invest with somebody because they're a good salesman, because they, oh, I like this guy. No, no, no, no.

You invest with them because they're a teacher and because you understand what you're doing. You don't get somebody to babysit your money. And that's how you pick your IRAs, Pick your mutual funds for your two Roth IRAs, and they'll help you get them a small business retirement set up, whether you use the simple or use the SIP, one of the two. Either one will work. And they're absolutely fabulous.

And it's going to keep you from paying so much in taxes, and it's going to allow you to really seriously build some wealth. It sounds to me like you guys need to get on a budget, because you thought $60,000 was tight, and now he's able to, quote, take care of us making $100,000 take-home pay, and you don't have any debt. So something's wrong with your budget. It sounds like you need to be doing one to know where your money's going.

You've done a really good job to get where you are, though. Well done. This is The Dave Ramsey Show. Hey, guys. This is James Childs, producer of the Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.