The Ramsey Show - App - Little Tweaks Can Lead to Big Gains (Hour 2)

Episode Date: July 3, 2019

Take control of your money once and for all. The Dave Ramsey Show offers up straight talk on life and money. Millions listen in as callers from all walks of life learn how to get out of debt and start building for the future. Check out the fifth most downloaded podcast of 2018!   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE     Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

I'm Dave Ramsey, and this is the Dave Ramsey Show, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Sitting in for Dave Ramsey, I'm Chris Hogan, and I'm excited to be here with you this hour to be able to talk about the money questions that are on your mind. But America, I can't talk to you if you don't call me. So I want you to pick up the phone right now, get that money question ready, and give me a call. The number to call is 888-825-5225.

Again, that's 888-825-5225. Or if you prefer, you can find us on social and just send us a message at Ramsey Show. We always love to talk with you and be able to dive in and really understand what's on your mind. Uh, we've got a few people out in the lobby. Hello. Hello. It's good to see them. Good looking folks out there. Uh, so I want to hear from you, America. Now I want to talk with you about something that we have to make sure to do at this time of year. You see, it's summertime and when you have summertime, you tend to take time off. But I was talking to a friend of mine, and he was talking about vacation.

He's talking about, well, you know, he needed to go somewhere. And I want to get something clear here. Vacation means the absence of work, right? It doesn't mean that you have to go anywhere. Now, I grew up on this other word that I'm going to tell you all about here in just a minute, and I didn't even know it at the time. But it was called a staycation. You all know about those? See, staycations, this is where you're at home. You're not necessarily going anywhere, but you're not working. And so I just want us to reframe what vacation looks like. It doesn't look like having

to go to a beach or go halfway around the world to go do something. It's more a matter of a state of mind. And so looking at this, I don't want parents out there putting unnecessary pressure on themselves and their budget with an expectation of trying to do something, especially if you're on baby step number two, right? You want to be careful because the last thing you want to do is go on vacation and do like I used to do back in the day. Long is PD pre-Dave, right? You don't want to do it to where vacation follows you back home in the form of a credit card statement, right? That's a terrible souvenir, America.

You don't want to do that. So you want to be smart. And so be aware. So I just want to encourage you out there to be careful about that. And just because something's on sale doesn't mean that it needs to get your money. Now we have to be careful

because we don't ever want to confuse want with need, right? And we can be careful because sometimes we can act like we want something so bad that it starts to feel like a need. If we are careful with those two things this summer, I think we can stay on our plan and get to where we want to go. All right, I'm going to the phones.

I've got Mitchell here calling out of St. Joe, Missouri. Mitchell, how are you? Good, how are you? Oh, my friend, I'm focused and not finished. How can I help you today? So, I'm calling because I'm in some debt right now. It's about $25,000 that I'm in debt. And I did it because I tried to grab one loan to take care of another loan, and I just ended up spreading my tires in nowhere.

And I've been listening to Dave Ramsey and you for the past two weeks. I just stopped listening to music, been reading those financial peace books. That's all I do. Good. So, you know, I'm trying to put my life back together. But also in the same sense, I'm trying to pay a different loan every week. And it feels like my hands are tied behind my back. I've also heard of these debt consolidations.

Would it be smarter to do a debt consolidation and just have to make one payment, which I know it's going to eventually be about the same, but I will have at least a little bit of some income and the interest will be a little lower. I just heard about it today, but I also want to know your thoughts about it. Okay.

Mitchell, talk to me here. I understand, especially you trying to put your life back together where you're trying to take back control. Talk to me about this debt. What do you owe $25,000 on? Well, me and my fiance, we have two cars. So it's both for those cars. One's the Chevy Equinox 2010.

One's 10 and the other one's 13. Okay. One of them's almost paid off. So 10, 13, that's... And the other one is just loans. One to get to a house. A house rented out just because we were going through a rough time. We had a...

Hurry up and get... We had a bad landlord. How much do you owe on that? How much do you owe? Nine. 900. 900. Well, with the interest, it's 1,100. Okay. Sorry, sir. What else do you owe on that? How much do you owe? $900. $900. Well, with the interest, it's $1,100.

Okay. Sorry, sir. What else do you owe? Then I have another loan for $600. And then there's another one that's the first I'm trying to tackle. It's one of them quick pay loans that they interest every single day. They're the ones I'm trying to pay off right now. Okay.

And that one is at $7,000. Okay. How much is your income? Just you. Myself, it's $49,000. All right. $49,000 a year. Okay.

So here's the deal. To answer your question, absolutely not on the debt consolidation. Okay? That is a terrible move. And here's the deal, Mitchell. Here the debt consolidation. Okay. That, that is, that is a terrible move. And here's the deal, Mitchell. Here's, here's how they get you. Now they'll show you where they combine all these things together and it looks like your payment is cheaper, but here's the gotcha. Remember I'm a former banker, so I'm going to shoot you straight. The gotcha is, is you end up being in debt longer. Okay. So you want to leave these things separate and do what

we call the debt snowball, my friend. Right? You're taking back control, but we've got to follow through on this. And so you list out these debts smallest to biggest. Your $600 one, then the $900 that you say is $1,100. And then we talk about these vehicles. Right? Now, with those, I'm going to look to find out where they are on this in the Kelley Blue Book,

and I'm probably going to look to sell something. You said one of them is almost paid off. Not at $10,000 and $13,000. It's not. they are on this and the kelly blue book and i'm probably going to look to sell something you said one of them is almost paid off not at 10 and 13 000 it's not so you got to make some decisions for yourself but don't consolidate okay don't don't dare to go down that path because then instead of having multiple smaller loans what you end up with is one big one but for a longer period of time so it's bad math all the way around. And what you need to do is get focused, get on the every dollar budget, start to get intentional about this. Now, your fiance, as you walk her through with the debt snowball, she can start to look at her own debts with what

she owes because we don't combine stuff until you say I do. Okay, so but the mindset for you is you can take back control, but you got to stop borrowing. Right now you're on a borrower Rama and looking to grab money from all over the place. And that's just not how you're going to do that. That's not the best way to fix it. So stay intentional, stay focused, do your debt snowball, list the debts. You just talked me through this. Now you go do your budget and you start to say, okay, I'm going to make minimum payments on everything. The $900 one, the 10 K and the 13 K this $600 debt. I assure you, if you start budgeting right now, that thing can get put out of your life.

And when you make that kind of decision and you get bold, I mean, put your debt snowball up on the refrigerator so it's in your face and you see it every day. And it's a reminder, right? Because you look at it and you go, uh-uh, you're getting out of my life. And you put that red line through that $600 one after you pay it off and you see that. And we know it tells you you did this and it reminds you that you can continue to do it. And when when you get out of debt, America, I'm here to tell you, you give yourself a raise because you got more money that you're eventually going to get to keep. And it's going to stay with you. We work so hard and I'm meeting a lot of hardworking Americans out there.

And they say, Chris, you know what? Boy, if I could only get more money. Well, here's the reality, because I've done this kind of crazy, where you get on a path, and you're living and you're living. But even though you're making more money, guess what happens? Lifestyle increases, and you're not ever able to feel the cushion. So you've got an opportunity to just start to think different. And Mitchell, you can do this. I'm going to send you Dave's book, The Total Money Makeover.

It's the number one bestselling book. It's going to walk you through other stories of people that have done this. I love the information. He's going to walk you through the baby steps. But the stories inside that book, that was my wake-up moment where I said, I can do this. And you know what? I did. And you can too. This is the Dave Ramsey show. Are high health care costs getting you down?

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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. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for the big guy. And we are taking your questions and diving in and talking about the money things that are on your mind. But I have to tell you, if you're ever near us, you need to come see us.

We've got a lobby full of people out there. I've got friends out there from Austin, Texas, Maryland, Cleveland, even Tampa, Florida, which I asked. I'm just always curious. where do people in Florida go on vacation? Well, it turns out they come to Nashville to visit us, which I absolutely love that. So we're taking your calls about your life and your money. But guess what? I need to hear from you. So if you've got a question that's been burning on the back of your mind or you've got a scenario

and you don't quite know where to turn, we're here for you. So just call us. That number to call is 888-825-5225. Again, that's 888-825-5225. Or find us on social at Ramsey Show. Okay, I've got John on the phone out in Des Moines, Iowa. John, how are you today, my friend? Yeah, good, Chris.

Thanks for taking my call. Yes, sir. I appreciate what you and Dave do, and your information is very helpful. We're about 10 years, 8 to ten years away from retirement. My wife and I have been married 31 years, and we have two rental properties. I wanted to see what your thoughts are. I also have four kids. I'll have three in college next year.

We're trying to figure out one of the rentals is paid off. The other one is half paid off. And our ultimate dream is to maybe have a place down where it's warm in Florida or something like that. But what are your thoughts? Should we keep these just to diversify and as an income producer, or could we possibly maybe sell them or trade them out to have a small place down in Florida? Okay, fantastic. John, are you familiar with the Baby Steps? Yes.

Okay, what Baby Step are you and your wife on right now? Well, we still owe a little bit on the car, so maybe step one. Okay, so you're on two. You're still attacking some debt. Yeah. Okay, all right. And do you all own a home right now? Yes.

Okay, how much do you owe on that home? We owe $164,000 on it. Okay, what do you think it's worth today? $275,000. Okay, love that. Let's continue on this line with real estate. One of the rentals is paid off. How much is it worth, rental number one? Oh, probably about $210,000. Okay. And rental number two that's half paid off, what's the value of it? About $115,000.

Okay. All right. So looking at this, and what is you all's net worth right now? How much do you have saved toward retirement? Well, my wife is a teacher, and so she's going to qualify for the state retirement. Right. She's got enough years, but beyond that, we're all assets a little over $500,000 right now. Okay. And are you including the rental properties? Yes. All assets, a little over $500,000 right now. Okay, $500,000. And are you including the rental properties? Yes. Okay, all right, good.

Now, tell me this. Household income? It varies, but it's between. I'm in sales, and so combined it's between $135,000 and $175,000. Okay. And these rental properties, are they both rented out right now? Yes. Okay. What's the rent you're getting on property one?

The one that paid off $1,650 a month. All right. And rental number two? $1,100. Okay. Are you using a property management company or are you all handling it yourself? No, just myself. Okay. Are you using a property management company or are you all handling it yourself? No, just myself. Okay. Quick question. If you get a phone call from property number one that's paid off and there's a roof problem, it's a $30,000 issue, where's that money coming from?

Well, right. We just rebid that entire structure 10 years ago. Now, you get my hypothetical. I'm saying, where's the money going to come from for repair? Right. I'm not sure. Okay. I would have to, depends what kind of year I'm having.

Right. Well, and as sales, you control your income. I'm just walking you through kind of the scenario as you look at this. You know, the goal is everybody wants real

estate, right? A lot of people do. They love it for the growth and the income. You've got them rented out. You've got some money coming in, but you have some debt. So if you look at this and you start to think about where you are, you've got three kids going into college. Number one, I'm going to send you the grad guide because helping them to understand the importance of scholarships and grants are important. There's not a mandate that says parents have to pay for their kids to go to school i think our mandate is to protect them and feed them and then point them in the right direction but i like the idea of looking at this with the debt that you have on your primary home right and then looking at the one that's half paid off if you were were to sell that, right? It's a lower of the income producing properties at $1,100 a month.

You look, you've got some equity in there. Gives you an opportunity to do some things. Now, mindset-wise, long-term, as you guys are thinking about moving somewhere else and making other moves, I want you to start to think, are the moves I'm making setting me up to be better down the road? Meaning making two-year decisions. That's my mindset, John. I want you to make a decision today that you're going to look back on in two years and you're grateful that you made that call. So I would look at selling that second property to allow you to kind of make some moves,

finish paying off that car, get your emergency fund in place. And now the property that's paid off, now you turn your attention and now you're doing baby steps four, five, and six. You're investing for yourself. You're starting to save for college, toward college, and then you're attacking and paying off your primary mortgage. That's the position that I would take. You can look at this, you and your wife, and talk through it, but look at the numbers. The numbers don't lie.

And I think more of us need to make business decisions instead of just heartfelt decisions. Heartfelt decisions can kind of get you tied up a little bit. But when you step away from it and start to look in that two-year decision, it gives you another perspective. Thank you for your call. Next up, I've got Jacob on the line from Washington, D.C. Jacob, how are you? I'm doing well, Chris. How are you? Oh, I'm focused and not finished, my friend. How can I help you? So I'm 23 years old. I got about an income of $60,000 currently investing 37% of my take-home pay into both investing and retirement. But next year in March, I'm going to actually be joining the Peace Corps. And so I'll be leaving my job and be going 27 months, essentially, without having an income. And so I was wondering how I should be from now until I leave both preparing for that. Should I be putting more into retirement at this time, or should I put more into my investment account and not specifically towards the IRA

401k route? Okay. So is that the mindset? How long have you known you've wanted to go this Peace Corps route? So I've known probably since about February of this year and I got accepted in May. Okay. So May of this year. And when will you leave, Jacob? So I'll leave on April 1st of 2020. Okay. So that's why you're investing 37%? Well, I've actually been investing 37% for the past year and a half now, just because I'm very fortunate to live in a pretty cheap apartment here in Washington, D.C. It's relatively expensive, but my bedroom's only $850,000, so I have a lot of extra income that I can invest for the future. Okay. And so how much do you currently have saved or invested right now?

So total, I have about $40,000 total. It's broken down about $10,000 in a checking account, $10,000 in savings, which is my emergency fund, $10,000 in a Roth, $7,000 in 401k from work, and then my investment account is about $3,000. Okay. My goodness, dude. And how old are you? 23. Okay. Were you raised with mutual fund parties or something? What's going on? No, I've been pretty smart with not going into debt. Yes, you have. There's no car payment to have there. I was also fortunate to have the opportunity that a grandfather paid off the $20,000 or so of student loans that I had. Okay. So you have no debt right now? Correct.

Okay. And so as you get ready to embark, and did you say you'll be gone for 27 months? Correct. It's 27 months. Wow. I mean, will you be able to come back and visit family? Yeah. So you have two paid days off a month. So you can either use those per month or you can kind of save them up and then, you know, do a week home to the United States if I wanted to do that.

Okay. And your current job, so you will be leaving that job at some point, right? In April or March? Correct. Okay. Well, I love the path that you're on. I mean, you're investing a lot. You need to go to a movie or do some stuff.

I mean, you need to spend some money. You're doing a good job. You're focused. You're very intentional. And I wish you well on your journey. I like it. Stay allergic to debt. Have a game plan for when you come back.

So I'd like to see you bump up that emergency fund. So work on saving up money so when you come back from this Peace Corps journey, what's your next step? You hit the ground running because you have cash. This is The Dave Ramsey Show. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in for Dave. And we are taking your life and your money questions right here, right now. So we need to hear from you.

Give us a call. The number to call is 888-825-5225. That's 888-825-5225. Or feel free to find us on social at Ramsey show. Now, speaking of social, I got a question in on from Instagram from Sally. Sally says, Chris, I just got a new job and they offer to take out seven and a half or 10 percent toward retirement. Should I just do the 10 percent? They match 25 percent. Well, Sally, number one, I love that you're aware of what the company offers and that you're on this mindset of investing. Right. So but I want you to be at 15 percent. So that's where you want to be.

Once you're out of debt, again, you don't tell me in here, but once you're out of debt and you've got an emergency fund saved up, that's three to six months of expenses saved up in a money market account because we've got to keep it liquid. So if life happens, you can get to it. Once you have that in place, then you start investing. So that's the route to go. You want to be at 15%.

So you give your money time to be able to grow. Compound interest is your best friend. And that's how you grow money. And so, you know, I'm getting a lot of questions about investing. And so I just want to tell you, no matter who you are, the thought of saving enough for retirement alone can be overwhelming. It can kind of be that you feel that you're off the mark or am I on track? What is going on? So our study of everyday millionaires, my number one bestselling book that launched in January, found that 68% of people worked with an investment professional.

68% worked with an investment professional to help them reach millionaire status. And in case you didn't know, financial advisors and investment professionals do more than just invest your money. They also can keep you on track and can help you stay calm whenever there's a dip in the market. They're there to assist you. So if you aren't working with an investment professional, we've got a network of professionals that you can connect with. Just go to DaveRamsey.com slash SmartVestor. Now, hear me with this and write this down. Okay? It's DaveRamsey.com slash SmartVestor, and you can find an investment professional that's near you right now.

And it's so important to get someone on your team to be able to walk with you. These men and women are all around the country, and I actually got a friend of mine that went to go sit down with one to just get his 401k reviewed. And this tweak that they just made about a couple of months ago is actually going to help my friend do much better long term. So I'm telling you that so you have the mindset of little tweaks can lead to big gains. And we just have to think differently about what we're doing, right, and what we're chasing down. I know your dreams matter to you. I know you want to get things done. And so you can get started with the SmartVestor Pro.

Also, I want to tell you, I've got a free net worth calculator at my website. If you go to ChrisHogan360.com slash net worth, there's a free tool on there to help you start to understand what is your net worth as you stand right now. And real quick, let me help you with this. Net worth is about what you own minus what you owe. So anything you own right now, that's your money in your bank account, your investments, your home, and everything minus what you owe on, it's going to give you your net worth. Now, I think this is important because when you know where you're starting, you know exactly what you're going to do as you do this everyday millionaire journey. So this is a free tool. Go to ChrisHogan360.com.

You can find out more. All right. I'm back to the phone. I've got Felix on the line from York, Pennsylvania. Felix, how are you? Hey, Chris. How are you today? I'm focused and not finished, my friend.

How are you? I am fine. Thank you so much. Hey, I got a quick question today? I'm focused and not finished, my friend. How are you? I am fine. Thank you so much. Hey, I got a quick question. I am self-employed. Okay. I have a taxable income, about $200,000. Mm-hmm.

And then my wife and I are having some discussion whether we should buy a home or not. Here's the thing. Okay. We have a rental property. There's four units in there. We rent three of them, and we live in one. Okay. So we collect about $3,000 every month.

Okay. So it pays itself, and it also allows me to live in there rent-free. All right. Which is good. Okay. My wife and I have $100,000 in a student loan on top of the $100,000 that we owe on the rental. Okay. So that's $270,000, and she wants to buy a home for us so we can move out of the rental.

But I do not agree because I'm saying that we should probably try to save some money and get out of debt before we think about buying a home. But she's not on the same page with me, and we decided to give you a call to see what you think about that. Okay, so you're coming to me to settle this situation? Yes. Okay. Whatever you say, we will do. All right, Felix, I'm going to hold you to this.

All right. How many kids do you all have? Just one, two-year-old daughter. All right. And how long have you and your wife been having this conversation about buying a home? We just bought the rental last year, so she just started telling me probably about two months ago. Okay. And when she brings it up, you tell her, honey, we need to save and get out of debt.

That's what I say. That's my speech. Okay. And then what does she say? She says, yes, getting out of debt is important, but she doesn't like the rental that we are in right now because it's only a two bedroom and she wants a bigger house. Okay. All right.

So here's the mindset. Looking at this, Felix, you know, you know the deal. I mean, you're right. You got $100,000 in student loan debt, and you owe $100,000 on this rental. And I think it's a mindset of helping her to understand that, A, you're trying to get out of debt, and then we've got to save to be able to buy this. Now, I think there's another phase to this. You all just moved in there a year ago. Right now, she's feeling the crunch, right? And feeling like it's too small. It's okay to dream out loud and to be able to have a conversation about it. But when it goes from a conversation to now feeling like you have to go do something, well, the thing to go do is to attack this $100,000 in student loan. And so that's the goal. I want you to attack debt, then build up the emergency fund. Now you've got a good income, 200,000. So it's a matter of you guys setting some targets and some goals. And so being able to see how they connect,

if you're going to look and you say, you know what, hon, in the next 18 months, we're going to, if we cut back, we can get intentional. We can attack X, Y, and Z. And then guess what? A year or two out from there, we can look at buying a home or beginning. So I think it's okay to talk about it and dream out loud. But then I want you to point these actions toward attacking the debt. Because what I found, Felix, is that when people buy a home before they're prepared to do it, it doesn't feel like a blessing. It actually feels a little bit more like a curse. It feels frustrating. And so I want you guys just to slow down and just look and just talk about, hey, one day we are going to, and then you can fill in the blank with buying a home.

But it's okay to talk about it. But I want you to be about attacking the debt. And that's the way to stay focused. Okay, so you can tell your wife that Hogan said, not yet. Let's attack the student loan debt. Felix, do not gloat. If you go home gloating that I agreed with you,

you're going to get us both in trouble and then that's not good. So anyway, that's the goal. Stay focused. Understand what you're going after and why it's so important. All right, I got Dan in Minneapolis, Minnesota.

Dan, how are you? I'm doing well, sir. How are you? I am fantastic. How can I help you? I'm going to question about whether or not I should be saving to eventually pay off my girlfriend's student loans or pay off my house. Right now, I have a house. I'm dating a girl who's in med school.

There's the potential that we could get married long term, and she's taking on a lot of debt right now. And I'm eventually going to go back to school, but my school will be paid for. So I've got about a year, year and a half of earning potential left before I start school again. So my question is whether or not I should be aggressively paying down my mortgage or saving to eventually pay off or potentially eventually pay off her debt. Okay.

So, Dan, let me get this straight. The only thing you owe on is your home? Yes, sir. Okay. Fantastic. Just call me, Chris. You say, sir, I look for my dad. Okay.

All right. So you only have the house. How much do you owe on your home? About $230,000. Okay. And what's your household income? Right now I'm making about $400,000 a year, but next year it'll be between $100,000 to $200,000. Okay, what's going on? What happened with the dip here?

So I'm going to start school in the fall. I'll be able to keep running my business for about a year, year and a half, and then I'm going to hopefully start a Ph.D. program, and at that point I won't be earning anything beyond the stipend for a Ph.D. All right, Dan, you hold tight. After this break, we're going to dig into this. Dan's making a good income, but he wants to know, should he attack his house or pay off his girlfriend's potential medical school debt? We're going to dig into it when we come back.

This is The Dave Ramsey show i'm chris hogan filling in for dave and before we went to break we were talking to dan Dan. Dan is in Minneapolis, Minnesota, and was really digging in and wanting to know with his situation in dealing with his girlfriend's debt, potentially, or attack and payoff his own home. Now, Dan, are you there? Yes, sir. Okay. So you were telling me you have an income of around $400,000. You're planning to go back to school in a year, and you're wanting to know. Now, how much potential debt is this girlfriend going to have?

By the time she gets out, it's probably going to be around $250,000. $250,000. And this is going to be an MD degree, correct? Correct. Okay. Dan, this is the big question. How long have you been dating this woman uh almost three years okay is she the one i i think so okay like out of out of 100

what percentage are you at i'd be about 75 to 80 oh okay all right that's that's pretty high well here's the deal i i like the mindset of you being focused, paying off the house. I'm not going to advise you, couldn't in good conscience, to get ready to pay for someone's debt and you're not married yet. I wouldn't pay for it until we were married. Okay, so you would be bolstering. I would not be paying it now, for sure. That's not on the table. It's just those loans are a much higher interest rate than my house.

Those loans would potentially be eight. This is a 3.5% house. I understand. Well, and I think right now, how much are you investing for retirement? Last year, I put about $55,000 in. I'll probably do about the same this year. Okay. That's the max I can do in my 401k.

Right. And what is your net worth right now? Right now, my net worth would be about $250,000, including the equity in the house. Okay. All right. Well, I like the idea of you channeling the extra funds you have toward attacking the home. I just think that that's a gift that we'll keep on giving when you start to think about the mortgage that you have and getting that out of the way, potentially with your income at $400,000, oh, and $230,000 on the home. I mean, that would be a fantastic kind of gift to give yourself as you get ready to go back into grad school. So that's the direction I'm going to go. You know, you guys can start to plan and be prepared for what's going to happen once you get out of grad school and you get married and you all are planning moving forward. But I think, you know, starting off 100 percent debt free, you know, for you as you get ready to get engaged and then you guys can walk through that path.

That's the direction it goes. I want you to stay focused on the known right now. You know, you're living in this home. Relationships can change. People, you know, all kinds of stuff can happen. You stay focused on what you know. You're on baby steps four, five, six right now. Attack the house.

I promise you, you won't regret it. All right, I've got Jessica on the line in Denver, Colorado. Jessica, how are you? Hello. Hello, Jessica. Are you there? I am. Fantastic, honey. how can i help you today so my issue is i am behind on every single thing and i'm finding myself in a financial bind that i'm struggling on even how to attack i'm behind on all of my credit cards, my mortgage, at least a month, if not more than a month.

Okay. So tell me this. How long have you been feeling this struggle? Oh, about a year and a half. Okay. Okay. So tell me, what do you owe on right now? The dollar amount tell me the debt and the dollar amount of what you owe right now um credit cards i have 17 500 how many cards are they total of five okay

all right so you got 17 500 in credit debt. What else do you owe on? I have a car loan that I owe $13,000 on. Okay. How much is the payment on that? $267 a month. Okay. What else? My mortgage, $176,000. All right. And what's your payment on that? $1,145 a month. All right.

Is there any other debt? Student loans. Okay. How much do you owe in student loans? I have $22,000 in student loans. They're deferred right now because I am in school. Okay. You are in school.

Are you a full-time student or part-time? Part-time. Okay, so tell me this. Of the credit card $17,500, you say there are five cards. Break that down for me. Credit card number one, what's the most you owe on a credit card? $5,000. Okay, and what about the next amount you owe? $5,000. Okay, and the next? The next is $3,500. Okay. The next is $3,000. Uh-huh. And then the remaining, I believe, is about $900.

Okay, all right. So tell me, you're working part-time, so what's your income right now? I work full-time. I go to school part-time. Okay, full-time. Okay, great. So what's your income right now? I work full-time. I go to school part-time. Okay, full-time. Okay, great. So what's your household income? Before tax, my annual income is $56,000.

Okay. All right. And so what you're going to school doing part-time right now, is that from student loans? Yes. Okay. All right. I figured as much. Okay.

So here's the deal. What you've done, Jessica, is you're right now at this point where you're starting to feel the crunch. And what you have to do now is make a decision. Like you're pursuing a higher education because you want more for yourself and your career. Correct? Right. So here's the thing. You're going to pursue this plan for financial freedom because

you want more for yourself and your your dreams financially so the the reality is is yes you got some debt here you've got a variety of student loan you've got mortgage you've got car you got credit card uh credit card is because you've been supplementing your lifestyle by by by using just credit card you use other people's money so the mindset needs to be you're going to do a debt you've been supplementing your lifestyle by using just credit cards. You use other people's money. So the mindset needs to be you're going to do a debt snowball just to what we did here. You're going to list out your debt smallest to biggest. You've got a $900 credit card, then you've got a $30,000, then a $3,500, a $5,000, and a $5,000.

And then you have your car, right? And then you have the student loan debt. And so mindset-wise, you're going to make minimum payments on all the, all the debts, the car, the student loans right now are deferred, but you're going to send every extra dime you can toward that small credit card. So making financial progress, it's about baby steps. That's why Dave came up with those seven steps. It's a process. You can't do it overnight. You didn't get in debt overnight, so don't expect to fix it overnight. But it is going to require a plan. And so I don't want you to feel overwhelmed. I want you to actually feel frustrated. I want you to be frustrated at this

debt and understand how much money is going out each and every month. And then we're going to get intentional to get your money back. You see, when you attack that debt, that's exactly what happens. You start to give yourself a raise and you get your money back. And Jessica, you can do this. You've got a good income. Okay. You're going to school part-time. I also want to encourage you. You might have to hit pause on the school thing right now, because I don't want you taking out any more student loan debt. You see how you feel right now. And it's okay to pause that until you get yourself in a position where you can pay cash for it. And it's okay.

It'll wait. I promise you it's not going anywhere, but we can't have a microwave mentality when we're dealing with a crockpot type of result. And as you know, we all know food tastes better when it's in a crockpot versus being microwaved. And so we can't fast forward anything, but we can sure run toward the goal with the right kind of mindset. So I want you to be intentional. Now I'm gonna send you a couple of gifts. I'm gonna send you Financial Peace University,

which is the course that's helped over 5 million people learn to get out of debt, learn to save and learn to invest. 5 million, Jessica. It's not an accident, it's a plan. You get to hear from Dave, Rachel, myself. We walk you through this stuff because people are doing it all around the country. People making a whole lot less than you. People with a whole lot more debt. So it can be done. It's all a matter of people making a decision. So I'm going to send you Financial

Peace University. I'm also going to send you Dave's book, The Total Money Makeover. This is the book that changed the game. It's still a bestseller. People are understanding exactly what they need to do, hearing the stories and also seeing the plan. And you can do this. It's a matter of just making some decisions. And it's okay to get frustrated. It's okay to even get a little bit tired.

Just don't stop. Get people around you that believe in you that can cheer you on. Well, listen, I want to thank our producer, James Childs, associate producer, Kelly Daniel, and of course you, America. Thank you for your calls. I believe in you, and I know better's available. We just have to chase it. This is The Dave Ramsey Show. We'll see you next time. on our YouTube channel. Catch the most watched Dave Rants, Deathly Screams, and the very popular Everyday Millionaire segment.

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