The Ramsey Show - App - Look for Compatible Financial Goals in the Person You Marry (Hour 2)

Episode Date: January 10, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It's a free call at 888-825-5225. That's 888-825-5225. Lisa is going to be with us in Nebraska.

Hi, Lisa. Welcome to the Dave Ramsey Show. Hi, Dave. I'm so happy Ramsey Show. Hi, Dave. I'm so happy to talk to you. You too. Thank you. My husband and I could use your advice on whether to sell our home or not. He had to retire early due to medical reasons, and he's 60.

I'm 57, and we weren't ready to financially retire. And so now we are kind of trying to decide I've got about three to four years left before I can retire. And we are wondering, do we go ahead and sell our home now and get out of a house payment and put the proceeds from our sales to our retirement, and then we won't have a house payment? Or do we, our home should be paid off probably about the same time in four years. Do we wait and then just take the proceeds and put it into our retirement at that time? So where are you going to live?

Well, we thought we would downsize and get a smaller home and then just pay for it outright. Oh, okay, and put the balance into your retirement plan. Right, yes. Okay. Well, either one's fine. When would you like to do that? Well, we just didn't know financially what would make more sense,

if we should do it now or wait down the road. Mathematically, if you do it now, you don't have a house payment, so you can save more. Okay. That's kind of what we wondered. We're really just torn. We kind of like our house, but yet yet on the other hand, it's probably. So what will your home sell for?

Anyway, probably about $475. And what would you buy? And maybe around, hopefully around a $300 tops. Okay. All right. And you would have no house payment at that point. Right. But you have a house payment now.

Correct. Correct. Okay. And he, you earn what? I am in the school system, so I would receive a pension, but I've probably got, well, it depends if I can hold off for four years to reach full benefits or if I go in two years. Why can't you hold off? You're only 57.

I know. To be honest, I'm getting a little burned out. Okay. All right. And so how much money do you all have in your nest egg? We have in his nest egg $465,000. And you don't have one at all except your pension would be coming? Right.

If I retire in two years, two and a half years, my pension would be about $1,800. And if you wait for it, it would be how much? About $2,300, $2,300, $2,400. $6,000 a year difference, not huge. Okay. Okay, what's the nature of his medical disability um he has um he developed seizures and he is working for a farmer um but he was working for an electric company and so those two just don't really go together. So he had to retire. So he's working for a farmer?

Mm-hmm. Yeah, just to supplement our income. I see. Okay. All right. Yeah, I mean, here's the thing. I turned 60 this year. So there's not anything that says he can't start a brand-new career. True.

I mean, unless the seizures keep him from doing it. Not necessarily at a 9-to-5 job, but he can start a business where he controls what he does. Right. What did he do at the electric company? He worked on the substations. Okay. Yeah.

With the high voltage. voltage yeah you don't need to have a high voltage situation with a seizure that would probably not be a plan okay i get it not all right all right and um what could you do to your situation to make it more fun to finish the four years i know i have thought have thought about, I really, and I actually have an hour and ten-minute commute both directions to my school. I know. Yeah, can you get closer? That would help.

Yes, I think so, too. Yeah, I think a change of scenery would be good for you and give you the energy to finish out. And I think he needs to not think of this um uh early retirement as mandatory i think instead of an early retirement maybe it's a change of direction yeah i think so because i think he's making i think he's making a lot less right now than he's probably worth he could make a lot more right now than he's probably worth.

He could make a lot more if he thought this through a little bit more. So I want to encourage him to start a brand new business and have the next 20 years be amazing, but between 60 and 80, go make a million dollars. That would be nice. Why not? Yeah. I mean, why not? Or work for a farmer?

I mean, let's go do something. I know. Let's go do something i know let's go do something i agree yeah because sometimes it's just a mentality of oh i can't do my job anymore because of medical and so i have to sit down oh well instead of sitting down i'll pick vegetables but you know and maybe there's something else to do maybe there's an encore career where the curtain goes up curtain goes down we take a bow and go do it again um so i don't know i i just encourage you in that regard because sometimes some of this

stuff is more of a mentality than it is anything else you're okay financially you're not gonna be eating alpo i mean you're gonna be all right um if you want to accentuate this and make your savings grow faster because you don't have a house payment, then move down now and pay cash for your move down. That's not a bad plan. But I think these two income parts of the equation that we're discussing, his and yours, might be a more important part of the overall discussion. That's why I went there. Hey, thanks for the call. I appreciate you joining us. Open phones at 888-825-5225 so we talk about a lot around here Wednesday I'm going to retire he's not they're going to take me out of here feet first or babbling

one of the two so if I stop making sense on the air they have the right to pull me off there because there are people in broadcasting stay on the air beyond their ability to make sense and they shouldn't do that but um yeah and i'm not gonna name any names um but you know who i'm talking about so anyway yeah as long as i could come around here and spread hate and dissension i'm gonna do it so um that's my plan so i because i love what i do i don't need money i haven't needed money for a long time but i like helping you guys and i like hearing your stories of success and winning, and so I'll continue to speak. I'll continue to do the show. What I'm not going to do is continue to run

the company because it's not good for the company and not good for my kids, the next generation coming on, and so, you know, I'm 60 coming this year, so sometime in the next decade, you'll see me step out of that role as some of them are ready to move into that role, and we finish up the leadership transitions around here, and I'll become just another ramsey personality except not as good as the other ones so um there you go they're already better than me but they're just not getting paid as well so there you go i'm not leaving people not leaving until you make me when nobody's listening i'll still come down here because I own the microphone. This is the Dave Ramsey Show.

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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. Today's question comes from Parker in Iowa. I'm trying to decide how to tackle my final amounts of student loan debt, my only debt left. I have enough money in my current account to pay off the final amount in a lump sum with enough left to cover my three to six months of emergency fund. Should I go this route or continue to pay above the minimum payment while saving the extra a month for a down payment on a home?

Ideally, I'd like to be moved into a new home in the next year or two. Parker, what we teach folks to do is not what you have done. We teach people to have $1,000 in the account, savings account, no more, and stop all investing and saving until you are debt-free other than your home. And you list your debts, smallest to largest, and you pay minimum payments on everything but the little one and baby step two using the debt snowball. And you attack with a vengeance. That's what you do.

So in your case, what I would do is simply write a check today and pay off your student loans. You should have done that months ago if you were listening to us. Just write a check today and pay off your student loans. You should have done that months ago if you were listening to us. Just write a check and pay them off. Then make sure you have an emergency fund of three to six months of expenses. Then, and only then, do you start saving for the down payment on your home. We always call saving for the down payment on your home baby step 3B because it comes after being debt-free and having your emergency fund in place, which is baby step three.

So be debt-free, have your emergency fund in place, and then begin to save your down payment for your home. You're going to get a home, Parker. But if you do this wrong, your home is going to get you. Take your time. Do it right. Bradley is with us. Bradley is in Washington. Hi, Bradley. Welcome to the Dave Ramsey right. Bradley is with us. Bradley's in Washington.

Hi, Bradley. Welcome to the Dave Ramsey Show. Thank you, Dave. I have a quick question for you. My wife is pregnant with our first, so we are excited and nervous and wanting to know, and she will be stopping her work in June when the baby comes. So we wanted to know how much life insurance should we take out for her or on her. Well, when she's a full-time mom, if something were to happen to her,

we would have to replace all the duties that she does. And so we've got to freaking hire Mary Poppins, right? Right. Okay, so if something happened to her, either you quit work, which you had no income to feed your kids then or you get some domestic help right that's what it amounts to so cooking cleaning tutoring carpooling uh you know uh teaching kids uh whatever all of those things are included in this so what does it take to replace all of those quote unquote domestic duties 40 grand a year easy what is your income uh 75 okay so i always tell people between 250 and 400 000 on a stay-at-home mom okay somewhere in there and the higher your income the more i

run that income that that coverage up not because quote unquote she's worth more but the drain on you is worth more should something happen to her is worth more yep yeah so you know i'm gonna put you in the 300 to 400 range maybe even 500 somewhere in that range but because how old is she she is 24 oh it doesn't cost anything get 500 it's not i mean it's not even the cost of a freaking pizza right yeah you get a guy get a 20-year 500 000 policy owner it's not gonna you run the numbers out when you go to zanderinsurance.com or zander.com and run the difference between 300 000 and 500 000 you're gonna laugh okay you'll see you'll see what i'm talking about it's just it's just pennies so yeah go ahead and cover your family man and and make sure because

what we're doing here is is both honoring of mom but it's also just observing facts and facts are that a stay-at-home mom to replace the duties that she does would be expensive. To hire people or a person to do all that she does would cost $30,000 to $50,000 a year. That's the real world. And so, yeah, it's honoring, but it's also just economically admitting that she brings economic value to the household. Duh. And try doing it without her if you don't think I'm right.

So there you go. Good stuff, man. That's a really good question. Sarah is in Tennessee. Hi, Sarah, how are you? I'm doing well. How are you doing, Dave? Better than I deserve. What's up? So my husband and I are landlords, and one of our tenants is a single mom. And when her parents passed away last end of summer, beginning of fall, she attempted to commit suicide. Oh, my Lord. And, yes. And her oldest daughter, who is an adult, has been taking care of everything since then. She didn't die. She's healing very slowly, not able to really function, kind of like somebody who's had a brain injury.

Is that mental or physical? I mean, did she do damage to herself or yes physically oh my gosh she's relearning to walk and talk and write okay and everything yeah so she had some time with no air to her brain okay yeah we haven't asked i've been trying to be sensitive about asking for details. Yeah. Are they paying you? I haven't gotten. Yes.

Okay. They've paid every month. Okay. And that's where my husband and I are kind of not sure what to do because their lease is coming to an end soon. And whenever we let the daughter who's been taking care of everything know about that, she asked us to let them stay in the house, you know, past the end of the lease. And we know that financially, you know, if she were to apply, then we wouldn't have, you know, for her to to be in the house you know to sign the lease on her own but then again they have been paying yeah and and how the house is

still in financially they're not able to how they've been paying the daughter is working two jobs okay all right was she living there prior to this? No, she has her own place and she still does, but I think she stays there pretty often. Is she married or she, why doesn't she move mom in with her? There are several younger siblings there. They wouldn't all fit in her one bedroom place. Oh, okay. Oh my goodness. What a mess. Okay. Well, you know, the only thing I know how to do in these situations is I do want to be a person of grace and a person who's kind and compassionate. But sometimes helping people work through tough decisions is the most compassionate thing you can do.

So I would sit down with this daughter and make sure she has good coping skills, and I would just have a real discussion with her and say, okay, you want to stay, but you're killing yourself to stay here. What's your long-term plan for taking care of your mom? Because, I mean, we're worried about you guys, and we don't want to put you in a position that this house is not a blessing and instead is destroying your life. So how can we help you? We can't give it to you free, but how can we help you? I

mean, if you want to stay a couple more months while you're in some kind of transition plan, we'll work that out. Matter of fact, we might even give you a month or something, but to help you get transition. But I, you know, two years from now, three years from now, do you still see yourself doing this exact situation? Um, you know, what is your plan and how can we help you in that plan? Because just, just because they're paying the bill, even though, you know what is your plan and how can we help you in that plan because just just because they're paying the bill even though you know they barely can resigning them you might be trapping them into something that's not good for them so i would just lovingly sit down and go maybe doing a month to month i would do a month to month for a little while but not not even then

if that's not a blessing to them if you're harming them and you're a little bit afraid you're harming them, that they're barely able to pull this off, right? So if you were her mom, this other girl's mom or her sister or somebody, you would advise her to probably get in a different situation long term, right? So let's just be that, let's treat other people like we'd want to be treated and and let's have a tough conversation and you can be you can afford to be gentle in the transition and give them month to month give them a month free or something as they go out the door or whatever but let's just say what's good for you and treat them that way that That's what I would do. 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. In the lobby of Ramsey Solutions on the debt-free stage, Derek and Chetna are with us. Hey guys, how are you? Good. We're good. How are you, Dave? Good. Where do you guys live? Columbus, Indiana. Oh, cool. Welcome to Nashville and all the way down here to do a debt-free scream. Yes, sir. How much have you paid off? We paid off $105,000. Good. How long did this take? 20 months. Good for you. And your range of income during that time? $160,000 to $185,000.

Whoa. Nice income. What do you all do for a living? We both are mechanical engineers. Ah, very nice. So what was the $105,000 of debt? That was our house. You paid off your house?

Yes, sir. Yes, Dave. Whoa. I was thinking mechanical engineers are going to tell me student loans. No. You are weird people. I was thinking mechanical engineers are going to tell me student loans. No. You are weird people. I am looking at weird people. Young weird people.

How old are you two? I'm 34. I'm actually 37 today. And happy birthday. Thank you. And you have a paid for house. Yes, sir. That's what.

How's that feel? Amazing. Yeah, it feels great. Pretty cool. So what is that house worth? Right around 200K. How's that feel? Amazing. Yeah, it feels great. Pretty cool. So what is that house worth? Right around $200,000. You don't know any other 34-year-olds with a paid-for house, do you?

I love it. That is so awesome. Way to go, you guys. So tell me the story. What prompts you to be this weird? Well, I was writing down the story before we got here and everything. So it really started about four years ago. I read Total Money Makeover, and I was overseas with the Air Force.

And I decided I'm going to pay off all my school loans at that time. So it was about $40,000. And then I met her online while I was over there. Uh-oh. And then we started dating, and this was three years ago. And then we got married. And she was actually already on your plan but didn't know who you were. So I got her on the Dave Ramsey plan exactly.

Okay. And then she became the nerd at that time and kind of flip-flopped, and we started doing 15% investment. Right after we got married a little over two years ago, we decided that the first thing we wanted to do was go through FPU. Even though, you know, we had some idea of, you know, we don't want to be dead and things like that. But we still thought that would be a good step for us. So we did start FPU 20 months ago. Wow. And you pay off your house.

Yes. And right after we completed FPU, we found out we were pregnant with our first child. And so it was even more important for us to stay on track. Yeah. How exciting. Yes. You guys are in a great stage of life. How fun.

Yes. Way to go. Wow. Wow. So you were in the airport. So did they pay for your mechanical engineering degree? Yeah, that's... Wait a minute. You had $40,000?

The student loaned that. I don't want to talk about that, Dave, but I can a little bit. Yeah, they did pay for my schooling, but I did a lot of dumb things. Okay. So when I read Total Money Maker, I was like, okay, I got to stop that. All right. Okay, cool. All right.

Well, you did good, man. I mean, listen, if you got dumb in your rearview mirror and you're 37, life's pretty good. Yeah. That's pretty cool. Good for you, man. Well done, you guys. So you're heroes. You did it. You're 37, 34. pretty good. That's pretty cool. Good for you, man. Well done, you guys. So, you're heroes. You did it.

You're 37, 34. You got a baby. House is paid for. You're making serious bank. Tell folks, you're in a position now to give this advice. What do you tell people getting out of debt, the secrets are? So, for both of us, I think the very first thing is to be on the same page. You know, money, conversation, and just not being in debt.

And what we want to do in the long term were some of the very first conversations we had when we started dating. So I think that's something that's very important to us. Yeah, making sure we're in a communication and on the same page, that's huge. And then also, I would say for me, it was kind of live your life, not theirs. Rachel's stuff, yeah. Yeah, so I kind of got this from my parents, my dad especially. I've had like a 95 Jeep for 10 years, and I've seen all my friends get cars with loans and new cars and new things. And I just kind of grew up that way and, and then reading the total money

makeover and understanding your principles, just like, I don't need that stuff. It's more important to do this. So, and then also, um, I did touch base on that a little bit, but, uh, this long term goal, you know, like I always was passionate about education, like somebody else's education. And so, you know, in long term and also traveling, and when we started talking, we were like, you know, we have all these goals, and we won't be able to go there and be there unless we are debt-free, you know. So we are now at a position where that's not a constraint to us.

You know, we can be generous and give. So what's the first big trip you're going to take now that the house has paid off? And don't say Nashville. Go ahead. Oh, it is Nashville, but we are going to Europe in April. There you go. What are you going to do in Europe? We're going to go to Paris and then Amsterdam.

They have the Teal Festival. Yeah? Yeah. So that will be fun. Great. Great trip. Well done. That's fun. First time to Paris? trip. Well done. That's fun.

First time to Paris? Yes. All right. Life is good. 37 and 34, your house is paid off, people. This is living like no one else. So later, you can live and give like no one else. This is what they're doing.

This is it. You're doing it. I'm so proud of y'all. Thank you. Who were your biggest cheerleaders? I actually had some friends at work that were following your plan. And then we had a friend that we kind of got on the plan and he was cheering us along. So those were some of the people that we had.

And then where we attended FPU at our local church, our financial peace coordinators, Rhonda and Dave, they still call us into FPU just to talk about our journey. So I think that's something they have been always there for us. Yeah. Well, I mean, you go in there and tell this story. Those people starting the Financial Peace University class are going, yeah, I want some of that. Yeah. Way to go, guys.

Very well done. What was the hardest part for y'all uh the hardest part for me was um probably just like i said just trying to stay in in our lane as far as not buying new things you know i had a lot of people with my family and outside friends saying why are you driving that car you know yeah you make 180 grand why are you driving a junky car exactly so just staying in that same spot understanding that this is our goal so that's what we're going for. Yeah. Yeah.

Yeah, it's funny because that's something that I would like to say. When I started dating Derek and I started meeting his family, that was one of the things they kept telling me, like, convince him to buy a new car. And I was like, I don't think they know me. You know, like, I'm just like him. I'm not going to be able to help you with that. Yeah, that part of him I'm probably going to make worse. Yeah, I like it. That's good.

Very cool. Good for you guys. Well done. We got a copy of Chris Hogan's book for you, Everyday Millionaires. For sure, that's the next chapter in your story. Lots of travel, lots of generosity. Your whole family trees are changed. Absolutely incredible, y'all.

Very, very well done. Thank you. All right, Derek in Chattanooga, Indianapolis area. $105,000 paid off in 20 months. That's their house and everything. Making $160,000 to $185,000. 37 years old on his birthday. I love it.

Count it down. Let's hear a debt-free scream. Ready? Three, two, one. We're debt-free. I love it. How fun. How fun. How fun.

Well done, you guys. Very well done. Now, that's a real couple. By the way, thank you for your service, Derek, in the Air Force. That's a real couple that made some mistakes. You know what mistake they didn't make? When they were dating, they didn't choose to marry a doofus.

That's a big deal. Don't marry a doofus. Right? They both married people. They married each other with common goals, with a common belief that they can go win, with a common belief that if we pay a price, that we'll be able to live our lives, live our dreams, and our dreams don't turn into nightmares.

Yeah, that's important. They were compatible. Yeah, isn't that funny? You look for that. I mean, choose wisely, my son. Choose wisely, my daughter. Because you're going to be with them a long time. Yeah, well done, you two. Very, very well done. You're absolute heroes. So proud of you. This is The Dave Ramsey Show. We'll be right back. Well, this is the month when people just like you decide that they've had it.

They're tired of worrying about money and hoping their money lasts longer than the month. January's where the rubber meets the road. Do you have a goal to get rid of your debt? Save some money? Well, now's the time to get serious and make a change. Here's a good way to do it. Start out with our number one best-selling book, The Total Money Makeover. It sold almost 7 million copies for a reason.

It's number one on the Wall Street Journal for the past 10 weeks for a reason. It works. It lays out our simple, practical, seven-baby-step plan and shows you how to get rid of debt fast and turn your money situation around great time to buy it it's on sale for 12.99 a total money makeover in the online store at DaveRamsey.com or call the Ramsey concierge team at 888-22-PEACE you are not trapped there is a way out get a copy of the total money makeover today and get after it i'll show you how i promise this is the dave ramsey show diane is in georgia diane how are you i'm great how are you today hon better than i deserve what's up well i'm retired and I own my own home. And what I need help with, Dave,

is my mom lives 700 miles from me. And although she's 95 and still driving, I can tell, we talk every day on the phone when I can't visit, but I can tell that her health is, you know, mentally and physically starting to get to the point where she's going to need me to go and stay with her, which is great. I don't have a problem with that, but what I don't know what to do is not knowing how soon that's going to happen, which will probably be within the year and how long I'll be, you know, living with her. I don't know whether I should sell my home and or board it up or I don't know what to do. I'm totally lost. Totally, totally lost. So all things being equal, you would come back to that house? Yes, I will definitely come back to Georgia. So you like the house and you like the area yes i do okay all right how big is it um well i'm retired so i downsized it's about 1800

square feet it's only uh two years old gotcha what city are you in in georgia i'm in cleveland okay northeast georgia all right and um i'm guessing you have a nest egg built as well since you have a paid for home um my home's paid for i don't have a big nest egg but i i get a lot for retirement i don't have to work i i've worked hard and made good money and so i'm so what's your monthly what's your monthly income i get 28 65 from social security So that's about $34,000 a year, which is great for me, you know. Yeah, and you can live on that easy, huh? Yeah, without a problem because I'm debt-free. I don't have any payments and nothing, just regular, you know, life.

And you don't have family in that town then? Where my mom is? No, where you are. I have family here, but no one that could actually i mean i've got my my kids here but but they're pretty well set in their life no i wasn't asking that i'm just saying could they run by and check on the house every so often yes they could i don't have a problem there let's start let's start with that being the plan okay when you make the decision that mom's in a situation where you need to go go and say kids

run by once a week and check on the house and just lock it up good maybe do some extra security things on it or whatever but uh but make sure that you know the pipes aren't freezing that something didn't break loose in there or something just have them go walk through it once a week and look at it that can be their part of the contribution while you go take care of your mom and you know um you you've got a big heart and you're you're taking care of your mom that's a wonderful thing all of that's good statistically speaking um i'm pretty impressed you made it to 95 i hope i do honey she's still driving i know you told me that yeah it's amazing i guess i'm going to be cold for a second at the point that she needs help

this is not going to be a five-year thing once she reaches the point she needs you to go out there you're not going to be there five years true okay statistically i'm just you know so you're you're probably not going to be there much over a year once she reaches the point that she needs you to care for um because she's 95 i mean you know that's just you know it's it's wonderful that she's had a great life. And I'm not being cold, but I'm just trying to help you analyze this. So I think your kids are walking through it. Now, if you've been out there a year and you think, you know what, Dave is wrong. She may go another three.

You may want to think about selling it then, right? Because letting it sit empty four years might be weird. But I don't think that's going to happen. I wish it would happen. Well, I'd actually wish she just didn't need your help and she'd be okay, right? Oh, absolutely. And be able to do everything right up until. That's what we all wish for.

But from the point that she needs your care, I don't think the house, your home, is going to be sitting empty for a super, super long time. So I just would try it. I'd try it for a year and see what happens and let the kids walk through yours. And you make a couple trips back every year and a couple trips a year and check on everything, and you're going to want to do that, see your kids anyway, all that kind of stuff. And just, you know, we're just analyzing this together.

And very cool. It's cool that you're in a position to take care of her. That's a good thing. Mike's with us in Texas. Hey, Mike, what's up? Hey, Dave, great to talk to you. I have a question for you. I made a little mistake this year with my health insurance, and I screwed up and did not do an election for the flexible spending account.

Oh, okay. Yeah, and so last year, we didn't budget enough. Some medical things had come up, so we went through our flexible spending account like midway through the year. My wife and I are on baby step two. We took FPU last June. And so I just budgeted, you know, just had a monthly budget to kind of cover medicines and little things. So now that I just looked at my first paycheck of the year and figured out my blender, I was wondering, would you suggest just continuing to try and do a small monthly budget for normal expenses or save up a little bit of that? I would just have a monthly budget that covers what you think your annual is going to be. So if you think you're going to spend $1,200 in a year, put $100 in the budget. Okay. If you think you're going to spend $2,400, put $200 in a budget monthly. Okay. And the only thing you've lost then is the fact that the FSA is pre-tax. Pre-tax. So you lost the taxes

on the money. But that's not the end of the world. It's not going to bankrupt you. It's just, you know, it's less, it's what we would say called less tax efficient because you're going to bankrupt you. It's just, you know, it's less, it's what we would say called less tax efficient because you're going to pay taxes on the money. But other than that, you're okay. Yeah, just take what you would have been putting in the FSA, maybe plus a little, and have that as a monthly line item because that's what your family's spending on your budget. That's what your family's spending on your medical. that's what we're after hey thanks for calling in open phones at 888-825-5225 you jump in we'll talk about your life and your money flexible spending account is something you always want to take advantage of at your work

the fsa it's a 125 cafeteria plan it's called says that you can take money out of your check in order to pay for certain things. Medical bills cover your deductibles is one of them. Another one that's real popular is sometimes they offer the ability for you to pay your daycare. And so here's the thing. Every $1,000 that you run through that saves you $300 in taxes. Because if you bring $1,000 dollars home it looks suspiciously like 700 doesn't it so anything you can run through an fsa the thing you don't want to do is over fund it you always want to slightly under fund it and so figure out if you're doing your daycare for instance if

that child care is one of the items you're allowed to do then calculate you know 11 of the 12 months and run that through and you run a month through not in case something came up that you weren't using daycare for some weird event child care for some weird event but that one and medical covering your out-of-pocket medical expenses is a standard thing in fs in a lot of fsas And if you've got that at your work, I highly recommend you take advantage of it. That's what he was calling about. That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, James Giles is our producer,

and Kelly Daniel is our associate producer. I'm Dave Ramsey, your host. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.