The Ramsey Show - App - Managing an Unpredictable, Part-Time Income (Hour 3)

Episode Date: February 8, 2019

The show about you

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, 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. Thank you for joining us. Open phones at 888-825-5225. Jennifer is in Atlanta to start this hour off. Hi, Jennifer. How are you?

I'm doing great, Dave. Thank you so much for taking my call today. Sure. What's up? So my question is, I have two debts left. One is a 401k loan, and then one is a student loan. And by the end of the month, I'll have enough saved up to pay off my 401k loan. Way to go. Yeah, I was wondering if I should do that or if I should put that money towards my mortgage

because I'm still paying for the PMI insurance. No. Get rid of your 401K. Get rid of your student loan. You're doing great. Keep it up. You'll get the PMI gone when you're working your baby step six and start paying down the mortgage and you get it down low enough that you can call the PMI gone when you're working your Baby Step 6 and start paying down the mortgage and you get it down low enough

that you can call the PMI off at that point. Okay. That's a Baby Step 6 item. Just go ahead and pay that as a regular mortgage. Don't worry about it right now. Get there when you get there. I love that you know you're supposed to do that. I love the progress you're making.

You're doing great, kiddo. All right. Thank you so much. I appreciate it it i'll do that hey thanks for the call brandon is with us in knoxville hey brandon welcome to the dave ramsey show uncle dave how about those basketballs baby man are they killing it or what they're they're doing it they're doing it hey i have a timeline question for you, Dave. I may get a little emotional, but hang with me if you can there. My wife and I are both teachers, and 2015 we had a daughter.

She had some learning disabilities, and she wasn't walking. So fast forward to 2017, I started grad school. I had some administrators pushing me to move forward in these things. So I thought, you know, the wife and I talked more. We talked about cash flowing it. We're going to do that. So into 2017, the bottom falls out. I'm teaching my students into grad school, making good grades and making progress. And they told us that her daughter had Alexander disease, which is an incurable disease that will eventually take her life before she's a teenager. We're looking at $38,000 worth of debt. There's two cars, and, of course, when the news came, I freaked out a little bit,

and so we started saving uh so now we have student loans to go with that so uh i was just going to ask your opinion do we stop and do we just save real hard and there's a little caveat there that we have some great friends and and uh they started raising money for us because we're going to be traveling to Philadelphia and such to see some specialists and things. So we have an account with about three-fourths of my wife's income of her salary just kind of sitting there for us to travel and do what needs our daughters have. So I was just going to ask you a question. Okay. I'm sorry.

Thank you. The math part of the equation is the medical needs and the travel needs that your daughter has, are they going to be covered by this account from the fundraising? That was the goal. Is there enough there to do it? For the traveling and medical right now, yes. We just don't know. How much is in this account?

How much is in that account? Right now it's around $30,000. Okay, and how much are you spending on travel and medical on your daughter right now? When we head up to Philadelphia each time, and it could increase. Right now it's somewhere around $5,000 to get her back and stay close to the hotel. And she's got six trips saved. Yes.

And how many trips do you anticipate making a year? Right now we're making one per year. I'm sorry, your phone broke up. One per year? One per year right now based on her digression. She digresses more if we need extra help. Right. So you've got six years worth.

Or five years worth. I'm sorry. No, six years. Six years. $5,000 each, $30,000, right? Okay. So that's out there pretty good ways that we pretty much can say with comfort we got that part covered thank you for the friends right yes i'm telling you yes sir

in the middle of everything else all right good and then you've saved up how much in your own emergency fund uh when i got a little nervous we had a thousand we bumped it up got a little nervous, we had $1,000. We bumped it up. We're a little over $5,000. And how much student loan debt did you take out? There's about 17 that end up. Okay, that doesn't work. If you went 17 into debt but you were cash-flowing it, why wouldn't you have 17 in your savings? Well, we started a cash flow, and then it was so nervous, and then we started throwing money into that $30,000 account as well.

Oh, that makes sense. Yeah. Okay, all right. So you're making sure the daughter's taken care of. That's what it should be, because she's priority one. Your school completion is not nearly the priority of that, and cleaning up debt. Okay? And so I would suggest you get back to the baby steps. You've got a $30,000 fund over here for the crisis that you're facing.

So mathematically, the crisis is behind you for a while. And so I would just go back to your normal baby steps and let's get down to $1,000 and let's start cash flow in school again. Because you shouldn't have a big drain on your budget for your daughter's need. You've got the $30,000 over to the side, so you should be able to cash flow school going forward, right? Well, actually, I hammered out and I actually graduated. So I'm looking to be an administrator next year.

Perfect. I want to talk to Nick Schroeder for that. Okay, well, let's just work the debt snowball here. Take $4,000 and throw it at your smallest debt, and let's just get out of debt. Perfect. You got knocked off the wagon. You didn't fall off the wagon. Yes, sir.

Now we're just going to crawl back. It's been a tough one, but we're still here. wagon yes now we're just going to crawl back but we're still here yeah but now we're going to crawl back on yes sir because there's no the point is is that nothing we're doing there is causing your daughter to be in jeopardy otherwise we would change the program right yes but you can you can run simultaneously now that you've got the 30 to the side to take care of this issue, the medical and the travel, for six years at your current burn rate, by then you should be out of debt, and you can probably cash flow your own travel and medical if it stays at that level, right? Yeah.

So you're on track. You're doing good. I'm sorry you guys are facing this. That's tough news, man news man and tough thing to fight through it takes your breath away but it sounds like you're doing the right thing sound like you got good people in your corner and um you finished up your income's going to go up now and uh your career is continuing so those parts are all good news to go there there's always a bucket coming out of the well and always one going in, isn't there?

Don't every one of us have something that we need to do? Something going on we wish wasn't, and something going on we're really celebrating at all times. This is the Dave budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts, no hidden fees. And if you're thinking our low cost means less coverage, think again. Our voice and data service covers 99% of Americans. And our 4G LTE network provides the fastest internet speeds like more expensive carriers we operate on the largest

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Sure. What's up? So I'm 23 years old, and I just got my degree in psychology. And I'm currently looking for a full-time job in my field. But in the meantime, I've been working part-time retail jobs. And my question is, how do I create a budget and save more money when I'm working part-time and I'm not getting regular hours every week? It's always different okay well there's two issues here uh one is how to manage an irregular unpredictable

income and two is you probably need to make more money yeah it's probably i'm a really good saver it's just like the income part that's coming because I do have $33,000 saved up so far. Wow, look at you. Good job. The only thing that I have that's like a debt right now is my car. So I paid all my way through school and everything as well, but my car still has $8,000 left, which after watching your show, I realized I probably shouldn't have got a $20,000 car when I was straight in school and everything. That's okay.

You have $33,000 in cash? Yes. So I'm thinking after watching it, because I'm a new listener, I should probably just pay it right off, which I was talking to my parents about. But they were saying because I'm paying zero interest on it, that they didn't think I should do that. But I was thinking that I should because that's what you're teaching, right? Yeah, I want you to pay it off immediately when we get off the phone. Okay.

But you've done so good. Well done. Okay, let's go back to the irregular income. Jump over and download the EveryDollar app for your phone, or it's free, for your phone or for your computer. And it's a budgeting app that we created that's very robust. It'll help you do a budget in about 10 minutes. Okay. The easiest way to manage an irregular income is using that app,

is you just jump in and change the income when you know what it is. Okay. And it adjusts everything right down the list. Now, the principle that we're using when we do that is this. If you were to just make a list on a yellow pad of everything that you need or want to spend money on and put a dollar amount beside it for this coming month. Okay. Okay. And you said, all right, what's the most important thing on this list? And you would put a one beside that.

I'll help you. That's food. Okay. Then once we've got food, if we make enough money to do one other thing, what's the next most important thing? And you put a two beside that. Probably lights and water. And then what's the next most important thing?

Probably rent. What's the next most important thing? Well, we don't have a car payment anymore, so we'll call it car gas. Okay. Well, I'm really lucky because I do live at home okay oh that helps a lot of stuff to pay for rent or really food or anything like that that's very helpful then so yeah really you still use the same principle though and just say write down the list what's my most important to least important item okay and then as money comes in you simply go that list, and you don't go to number three until number one and two are done.

And that's kind of how we did it for years manually. You can have the same effect if you just lay out your every dollar budget based on what you think it's going to do. But if you have money left in your budget, you always need to give it an assignment, and that's where your adjustments would come in based on how many hours you get. Just jump on your every dollar budget, you always need to give an assignment, and that's where your adjustments would come in based on how many hours you get. Just jump on your EveryDollar budget, change your income. It's going to show you've got money to allocate. Now I've got to allocate it to something.

I want to give EveryDollar an assignment because dollars that don't have an assignment have a way of wandering off, and that's why we call the budget app EveryDollar. It's because EveryDollar needs a budget app EveryDollar, is because every dollar needs a name. Every dollar needs a mission, and that's how you're going to work this through. You are doing really well. Good job. Yeah, when you land that job in your field and you get out on your own out of your parents' basement, you're going to be killing it, and that's no shame in being in your parents' basement

for a short period of time while you're making the transition from college into the full-time career job. And you've got good savings. You've done a great, great job. Very proud of you. But I would pay off your car by the end of the day. Cole is with us in Philadelphia. Hi, Cole. How are you?

I'm good, Dave. Thank you for taking my call. Sure. How can I help? Yeah, so around seven months ago, I switched from being a W-2 to a self-employed worker, and doing that increased my income by, you know, two and a half times, and my wife and I were able to take care of our debt, and we were ready to, you know, buy a house. Wow. But when I applied for mortgages, you know, there was issues with me only having a self-employed income for, you know, seven months. So we had difficulty finding a lender who would be willing to provide that. So one question I have is, you know, are there options for someone like me? I'm self-employed. So getting a mortgage, where should be looking?

And two, I'm also trying to figure out exactly how much I should spend because, you know, I'm a contract worker now. And it's not my my finances aren't as set. Yeah. So how much money are you making? Right now, around 50,000 a month. $50,000 a month? Yes. $600,000 a year? Yes.

Dude, that's pretty amazing. Wow. Thank you. So why don't you just save up and pay cash for a house? That's something we've considered. We have a second kid on the way, and we were trying to rush to make sure we had a house for the kid. Yeah. I think that'd be my plan.

Hey, what do you do? I work in pharmaceuticals. Oh, good. Okay. Well, good for you. right uh congratulations i'm proud of you that's amazing how old are you thank you i'm 34 wow how good is this oh man that's just amazing okay well um you know i i would try to find a small local bank or credit union and talk to them and sit down and show them where you are. What you're going to have to find if you're going to borrow money is what's called a non-conforming loan.

Loans that conform to FHA or VA or Fannie Mae underwriting guidelines are not going to loan you money. They're going to require two years of tax returns. A non-conforming loan means they're not trying to sell the mortgage once they make it. They're going to keep it in the bank. And so if you walk down there and go, I make $50,000 a month. I need to borrow $600,000. And I'm going to pay it off in three years like it's a car payment, right? Then you're sitting and looking eyeball to eyeball into a very shocked face of a branch

manager of a credit union, right? And you're trying to get a hold of their brain like that. It might not even be a credit union deal. It might be a bank deal. But the point being is they have to keep the loan in their portfolio. get a hold of their brain like that. It might not even be a credit union deal. It might be a bank deal. But the point being is they have to keep the loan in their portfolio. They have to not be wanting to sell it because since it didn't conform to the other underwriting guidelines, the generic guidelines, it's not marketable. They can't sell the loan.

They're stuck with it. Also, they're going to be looking for a huge down payment. How much have you guys saved already? Yeah, I think we spent a lot on getting rid of the debt. Good, good. So right now, it's kind of even building. So are you in an apartment, or what are you in now? Yeah, we're in an apartment.

Okay. Listen, this is such an unusual income ratio, so my advice is going to be unusual. If I were in your shoes, what I would do is go rent something very nice. I normally tell people to rent the cheapest they can, save up money, right? But, I mean, if you go spend $4,000 a month on a rental and you satisfy this itch with the kid coming and you just sit there and pile up money and pay cash and you move in a year and a half or two years you sit in a really, really nice rental for one year or two years there's no shame in that.

Let me ask you, is this income easy to extrapolate in the future? Do you feel like it's going to continue? Yeah, yeah. Okay. I do. Yeah, I would just go rent something really, really nice that I just feel fine about, just as if I had bought a home, in your case, because you've got this huge disposable income. And then I would just pile up cash and pay cash for my home within about two years.

That's what I would do. I wouldn't fool with a bank. I think you're going to have a hard time getting a banker up off the floor when he's on the story. Very cool, man. I love that. You're winning. This is the Dave Ramsey Show. Did you know that if you combine the data breaches that have occurred in the past 12 months, almost every American has had their personal info compromised or hacked. Over 50% of our listeners and viewers tell us that they or someone in their family has been a victim.

And 70% of those folks have had it happen more than once. See, this is unbelievable. Once thieves get your info, the risk never goes away and they can use it whenever and however they choose. It truly has become an issue of not if, but when. That's why the only plan I've ever recommended is through Zander Insurance. I actually sat down with them and we put together a plan that I felt provided the best protection, but didn't waste dollars on things you could easily do yourself

or were just gimmicks. The key is getting protected before you're a victim, and it's too late. Go to Zander.com or call 800-356-4282. We are all at risk, and it doesn't make sense to wait. Numbers don't lie. That's Zander.com or 800-356-4282. In the lobby of Ramsey Solutions, Trey and Tiffany are with us.

Hey, guys. How are you? Hey, Uncle Dave. Welcome. Good to have you. Where do you guys live? Hendersonville, Tennessee. Oh, we're neighbors then.

Yes. Just down the road. Good. Welcome. And so, here to do a debt-free scream. Absolutely. And how much have you paid off? $71,000.

Woo-hoo! And how long did this take? 18 months. And your range how long did this take? 18 months. And your range of income during this time? $85K and now $135K. Wow, nice jump in 18 months. Oh, yeah. What happened?

Well, we moved, relocated from Jacksonville, Florida. And got better jobs. Yes. Absolutely. I finished my college degree, and that seems to open doors, you know? I've heard the rumor. Yeah. So what was your degree in, and what door opened?

I was in banking before. I got my degree in business management, and I continued in banking, and now I'm a financial crimes analyst. Ah, okay. There we go. Nice jump. And what about you, Trey? What do you do? Yes, I'm an educator.

I'm currently serving at an elementary school as a director of operations. Oh, good. Very good. Nice job, guys. Thank you. So what kind of debt was the $71,000? It was a car note that we sold. It was an upside-down car, and we turned that in and bought a car cash.

We also had student loan debt that we paid off. I started off paying my credit card debt off, and I believe that's it. We had to pay off cell phones. Yeah, cell phones. And just rent. Y'all were just kind of normal. Yeah, that's what they say. Debt everywhere. Yeah. to pay off cell phones. Yeah, cell phones. And just rent. Y'all were just kind of normal. Yeah, that's what they say. Dead everywhere.

Yeah. And now you're weird. Super weird. I love it. Weird is cool. So what was the car? What kind of car? It was like a 2014 Hyundai.

Tucson. Tucson, yes. Okay. And I posted it about it. I was like, ooh, look what the Lord blessed us with. Now we got to sell it. Figured out that wasn't God's blessing after all. Might have been the other side.

Yeah, that's all I'm saying. All right. Yeah, good. Very good. Good for you guys. So how long you been married? Since May of 2016. Yeah.

So sounds like about the time you got married you started this then about six months in okay so tell me the story what got you started so uh i went to vanderbilt university and uh it's a local ministry here that just kept sending me emails and emails and i i was like what's this financial peace university and i just started doing my research and then i kind of got with tiffany i was like we need to look at this. And we started our journey, and we did, I think, the home study and really just dug in, and we're fully bought in. Okay. All right.

So Financial Peace University is what caused it. Yes. By ourselves at home looking at DVDs and taking notes, and it brought us together so much more than money. Wow. Very cool. Yeah. Very cool. Yeah. Very neat. Good for you.

So when he came around, Tiffany, and he said, this thing keeps coming in the mail or the email. I think we ought to look at it. What did you say? I was pretty – I have two money languages. I'm a saver first, but then I'm a spender, if that makes any sense. It does. It's a nice little balance.

But when we got the information, it just made so much sense that I had no problem jumping on board. But when we had our first argument about how much money I was spending on groceries, I was like, oh, wait, this is real. This just got real. He's checking everything. I'm the nerd. So it's like we got to do this. So that was Sharon's and I. That was our big fight.

When we very first started was a grocery store fight. And I was obviously wrong because she wasn't spending too much. But for the first time ever, I cared what she was spending because we were on this stuff. And I'm like, you spent what? And she's like, look, bad boy, you go over there and see if you can do it for that you're going to the grocery store with me and we changed the envelopes uh and actually raised them after i went with her because i lost that fight hands down sounds familiar yeah good job you guys good job so what do you tell people the key to getting out of debt is you pay off 71,018 months month. You sold a car.

What else did you do? We both got part-time jobs. Really? Yeah. I, on the side, did a lot of pageantry work, took a lot of clients, dance lessons, and did that consistently. Yeah, I took a part-time job doing kickboxing and struck dang and just trying to find any extra income we can scrape up. Yeah. Well, so you took something you both knew something about and had done before and turned

that into instruction. Yes. And that's good pay usually. That's really a sweet part-time job. Definitely. It's a side hustle. Yes. Plus you get to do something you kind of like doing anyway.

Yeah. It didn't feel like work too much, but you just really had to sacrifice the delayed gratification, the sitting down with EveryDollar app every single month doing a budget and really talking about what our goals were and keeping ourselves abreast over what we were doing. And then the EveryDollar app, I was first using the free version and logging every single transaction. When I got really, really bought in, I was like, I think this is a good $10 investment. And it made so much more sense and saves a lot of time. And I'm going to do it on this Saturday, like clockwork.

You've got to try every single thing that you're doing and tell EveryDollar where to go. Yeah, it does. It makes a big difference. is worth the 10 bucks yeah but on the other hand the um there's nothing wrong with those manual entries when you first start yes because a you you want to figure out how this is all going to work but two it kind of it kind of like sears it into your brain when you do those manual entries you know the Absolutely. The auto entries, they don't hit you in the face quite as hard. No, I felt it. Oh, my goodness, if I have to log another target, Bill. Oh!

Hold on. You're crossing the line. Yeah, you just went into spiritual warfare now, man. Rachel calls that the black hole of goodness. Oh, yes. Yes, it is. Unbelievable. Well, good job, you guys. We're very, very Oh, yes. Yes, it is. Unbelievable.

Well, good job, you guys. We're very, very proud of you. Who were your biggest cheerleaders? Can we say each other? Each other. You can. Because you were like doing it in the house. Nobody knew it, right? You're watching little videos.

We wanted to invite people, but there was, you know, an excuse. We had, you know, those who, you know, were laughing and then um now they're joining or some people you know they kind of want to pick and choose like the davis the davis no ish for you you're game on game on i'm proud of you guys thank you very well done great job and welcome to nashville thank you thank you so much and uh congratulations on your great careers you're making a serious bank. You're debt-free. Got married.

Everything's rocking here, man. Everything's good. All right. Got a copy of Chris Hogan's book for you, not Retire Inspired, The Everyday Millionaire's Book. That's right. Because you're going to be one soon. Absolutely. You're on your way, no doubt about it.

So congrats again. Thank you. Trey and Tiffany in Nashville, $71, 000 paid off in 18 months sold a car did it make an 85 to 135 count it down let's hear a debt-free scream three two one Love it. Well done, you guys. Very, very well done. Open phones this hour at 888-825-5225. You jump in.

We'll talk about your life, your money. It's a free call. Wow, what a great couple. They are killing it, man. Absolutely killing it. If you want to go through Financial Peace University or you want to help other people go through it, we call the people leading the class as coordinators because you're coordinating the class. I teach the class on DVD. 78% of Americans are living paycheck to paycheck, and that means 8 out of 10 of your

friends at least are struggling. Hey, man, I don't even know they're struggling. It's just all the money's coming in, all the money's going out. It'd be pretty cool to be able to help them, and Financial Peace University does that. It's a nine-week class, and when you buy the nine-week class and go to the nine-week class, you get a one-year membership to the entire online experience, which is the audios, the videos, including the follow-up class, the legacy journey, and the class where Rachel teaches you how to teach your kids how to handle money, smart money, smart kids.

We've helped almost six million people now. I'm teaching them how to get out of debt and become everyday millionaires. Financial Peace University, go to DaveRamsey.com, ask about being a coordinator, or text LEADFPU to 33789. LEADFPU to 33789. Our Scripture of the day, Psalms 37, 23 and 24. The Lord makes firm the steps of the one who delights in him. Though he may stumble, he will not fall, for the Lord upholds him with his hand. Bruce Lee said, The successful warrior is the average man with laser-like focus.

So I guess you've heard Wells Fargo hit the wall. If you hadn't heard that, it's all over the news. If you're a Wells Fargo customer, you've figured it out. This article says, Wells Fargo customers have been unable to access their accounts and in some cases haven't received scheduled direct deposits because of a power outage on Thursday that has continued into Friday morning. ATM service has been restored and customers can continue using their credit and debit cards according to a statement the company released on Thursday night. But some online banking features like credit card and mortgage balances are still unavailable.

On Twitter, a Wells Fargo spokesman said, confirmed that the outage was caused by smoke in a facility and was not the result of any cybersecurity event. Some customers were not relieved to hear the issue was triggered by smoke instead of hackers. One said, one is being a victim of an attack. The other implies your entire global operation goes down because of a fire in one building, which really is pretty dadgum ridiculous, honestly. Apparently, their server farm caught on fire, and they fried some stuff, and smoke took out a bunch of stuff.

And apparently, with the scale that Wells Fargo's at, for some reason, they did not have any kind of redundancy. I mean, even I understand that. So we continue to work on restoring our services as soon as possible. Encourage customers to contact us if they have any questions or concerns. We apologize for the inconvenience caused by these system issues. Other customers have used the outage as an opportunity to point out how arbitrary these fees are. I accept your apology, but please be aware that I charge a banking fee for this type of inconvenience. So Wells Fargo now owes me $150.

Listen, guys, if you're still doing business with a mega bank of any kind, Fifth Third, Wells Fargo, Bank of America, why? Why? You're treated like crap. You're charged extra fees., highest fees in the business. And, you know, Wells Fargo had 25,000 employees fired for committing fraud. 25,000! Fired! 25,000 fired. They were opening accounts in people's names in order to get bonus points,

in order to get bonuses. And you stayed there. And, you know, why? It's beyond my wildest imagination why you would do business with them, with the way they treat you. There's not a chance bank of america wells fargo chase good lord and now sun trust is going in with bb and t and they're going to be one that size they'll be the sixth largest and truthfully these banks just have trouble they lose their soul as if they had one to start with probably but they lost their soul when they get to this size and by soul i mean you walk in there and they treat you

like you like they are doing you a favor to let you be their customer a good local credit union actually know your name most of the time and they know who the buy they know who the boss is and the customer is the boss same with a good community bank a good local bank maybe even a regional bank i've got money in local banks and regional banks that's who i bank with but um these these mega things man why are you screwing around with them? Seriously. And if they're of that size, you would think they had allocated enough of their profits to create a technical situation where one particular location going down. What if a tornado hit that server farm? Does Wells Fargo stay down then for six months? They got no redundancy?

I mean, they got no redundancy i mean they got no i mean no tie-in to aws so they can just upload servers or the flip of a switch and keep things moving at least as a backup i mean come on guys i'm not even a tech guy i run a little bitty 200 million dollar company to the side of you guys and i know how to do that crap because i actually give a rip that's why so um unbelievable y'all unbelievable so really if this isn't a wake-up call for some of you with your mega bank relationship he says in quotes air quotes that's relationship right that's that's where that should be when you're talking about a mega bank seriously oh get out of there deborah is with us in philadelphia hi deborah how are you i'm great how are you dave better than i deserve what's up in your world Well, I am closing out Baby Step 3, and I have a question about retirement.

I am a state employee. I'm a teacher in New Jersey. I'm actually from A. Harper Township, New Jersey. And we have mandatory contributions. Right. At this point, my contribution is a little over 12%. Right. And it increases over 12%. Right. And it increases every January.

Right. So I have done FPU. I became a coordinator this summer. Thank you. I won one of your kits this summer. Wow. I'm actually on my third class, and my church was generous enough to get me the updated manual and everything, the updated course. But on the plan, need clarification okay am i

supposed to be saving another 15 percent in investments in these mutual funds that you talk about yeah well no um you're putting 12 into a pension already the problem with the pension of course is you don't have any control over the investments and you have no control over withdrawals or anything else. It's just you are required to throw it over there, and it's going to do what it's going to do. I'm not predicting its failure, but it's also not going to be wildly successful, okay? So it's going to underperform if it works like it's supposed to work. Most of the pensions will make six seven percent maximum okay and a good mutual fund a good

series of mutual funds you should be able to average upward of 12 over time mine do and so anyway all that to say but you are putting a big chunk of money in there and it's going to be a big chunk of money if it works like it should work okay so i'm not freaking out about it i'm not predicting the end of the pension or something like that but i wouldn't count it at a full 12 why don't we count it half like say you're already putting six percent in okay and let's put in another nine or eight or something like that out there on your own in good roth iras and that kind of thing so you got some money out here that is invested effectively and that you have more control over.

That way you're not leaning 100% on something that you don't have any control over. And, but we're not also going to go crazy and go, well, we're just going to pretend like that pension isn't there. No, I mean, you're putting money in it. You're going to get money out of it. So let's count it at least half. If you want to count it a little more than half and say, you know, we're going to count it for 7%, right, or 8% or something. I don't care.

But put something into your Roth IRA. Let's get something going outside that's the 5 to whatever, 5 to 10% range. Is that okay? Okay. Something like that. How old are you? I am 45. Cool.

And you're single? Yes. And you paid off all your debt and you have an emergency fund. I've paid off all my debt, but my student loan was more than half of my gross. So we put it on step six after I talked to one of the Dave Ramsey financial coaches. So this step three will be done within the next two months. And then... You're doing so good.

How's it feel to be that much in control? It feels really good not to be paying out this debt payment. It's really beautiful to look at my every dollar and see that, oh, you know, this time last year, I was paying like 32% of my take-home was going to debt payments, but now 35% of my take-home is going to saving for Step 3. You know, and that money goes to me. I'll tell you me. Thank you. I tell you what, hold on.

I need you to pick up and tell Kelly who your financial coach is in the Dave Ramsey system, okay? Because the advice he gave you is wrong, and I want to be able to teach him to correct it, all right? Hey, you're doing good. I'm proud of you. Keep it up. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.