The Ramsey Show - App - Moving Your Debt Around Is NOT the Same As Paying It Off (Hour 1)

Episode Date: November 10, 2021

Budgeting, Relationships, Debt, Career, Saving, Retirement As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Welcome to the Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Christy Wright, number one best-selling author a couple of times over. Ramsey Personality is my co-host today. Her new book, Take Back Your Time, The Guilt-Free Guide to Life Balance,

is a number one bestseller. It just came out a few weeks ago, so be sure you check that out. We'll be taking your calls today about your life and your money. You jump in. The phone number is 888-825-5225. That's 888-825-5225. Jordan starts off this hour in Portland, Oregon. Hi, Jordan.

Welcome to the Ramsey Show. Hey, Dave. How are you doing today? Better than I deserve, man. What's up? Good. Well, Dave, I doubt you remember remember me but i spoke with you i believe in april or may of this year uh and i'm coming back to share some great success uh you know i i

sold my property i had back in denver um my wife and i were just getting ready to get married and now that's happened the house is sold what is What is paid for? We're debt free. We put a down payment on a beautiful house. We're getting ready to close here at the end of December or beginning of December. Great. Awesome. Yeah, it's fantastic. It feels like a huge accomplishment.

And, you know, it definitely had its ups and downs. And when we got back from our honeymoon, I actually lost my job. So a little hiccup, but I'm glad that we we had that you know our our debts taken care of and now i'm back to work making more than i did before and my wife's got a job that she loves too and um we're i i feel bad though um all things considered things are going pretty well, I went through this buying process, uh, this, this property. I mean, we, we found this house together. Um, but when it came to paying for the house, it all came down to my credit and for the mortgage. Um, you know, my wife's did that, didn't have good enough credit to be on the mortgage with us, but she's, you know,

an equal owner of this property with me. Um, but now that, you know, we're debt free, we're getting ready to close on this house. She kind of admitted to me today that she felt a little bit left out in process and she wants to be a little bit more involved with finances. And I feel bad that, you know, I didn't really take that into consideration beforehand. I'm looking for some guidance from you all and to see what, you know see what can I do better to help make sure that she's involved in this process and how I can get her acclimated to what the finances look like, if that makes sense.

Well, it's interesting, Jordan, because what comes to mind for me, this house buying, while it's super exciting and, yes, it's a big deal, it is one step, one piece of your financial journey. What jumps out to me that is way more important is that your wife is involved in the day-to-day finances and the monthly budget and the conversations where you guys as a team come together and say, hey, what are the goals we're working on and how are both of our values represented and both of us have equal ownership and equal responsibility. And that to me is what makes the unity piece so powerful in relation to your marriage when it comes to finances.

Buying a house is a one-time thing. Like that happens, you're going to close when you close. And I mean, I can see how she would feel that way if there was some type of conversations in those meetings where she felt shame or or less than or something and that's something that you know is valid and i'm glad that you're you're asking and i'm glad that you care um but i i would not see that continuing to be an issue i'm just guessing here but i wouldn't see that continuing to be an issue day-to-day in your marriage and managing your finances dave i don't know i don't know if i'm missing a piece i think you're there to christy's point doing a detailed budget before

the month begins and both of you agreeing on that sharon and i've been married 39 years and if we are agreeing on our calendar and we talk calendars like we talk budgets matter of fact maybe more detail on calendars these days and um and we're agreeing on our budget, and we've agreed that neither one of us make large financial decisions without the other one involved, and including giving, including buying something. I don't come home with a new car and go, look what I did. You know, I mean, we don't do that. We talk about anything we're going to buy before we buy it.

That's pretty simple. And, you know, now it may be that she's redecorating and i'm just like okay what are we going to spend we're going to spend x all right i'm good with that now then she goes and does 9 000 details associated with that but i'm in the loop enough that i i didn't get surprised by the sticker shock of uh us redecorating again and so um but uh uh but yeah so or maybe i'm buying a toy uh or something and i'm going hey you know this is what i'm looking at doing you okay with this yeah and then she doesn't have anything else to do with it i go do it so you but but she's in the loop on the decision and the monthly budget, the rhythm of where the money's going around the house, what we're doing with that.

That puts it all together. So, I'm kind of with Christy. I kind of think you're not doing that part. If you're doing that part, it'll probably solve the big part. Yeah. The one thing I would add to that is you're talking, Dave, because you make such a good point of the other person being in the loop on the decision, even if they're not going to have an interest in necessarily redecorating the toy or whatever, they know about the purchase. And one of the things that Matt and I have put in place years ago is we just simply do not make any type of financial decision until we are totally on the

same page. And I know that's probably common sense for you and I, but I want to say it out loud, because some people might just be like, oh, well, and they go ahead and do it. And it's showing respect to the other person to hold on any big decisions, on any decisions until you guys get on the same page. And so be willing to work through that. Those type of conversations, that's what's going to create the unity in your marriage. That's going to make a big difference, Jordan. So it could be that you kind of, she said, yeah, let's get a house. You went and got it.

And she wasn't involved in the process enough as far as that goes. And she said yeah let's get a house you went and got it and she wasn't involved in the process enough uh as far as that goes and she's actually going to live there so uh whether she's on the credit or not you're on the credit doesn't matter to me at all that's not part of this conversation so good question thank you for joining us zachary is in sacramento hi zachary welcome to the ramsey show hi sir how are. How are you today? Great. What's up? Hey, quick question for you. I've been watching a lot of your videos recently on YouTube, and my brother recently got me involved with a lot of your stuff. And I'm just trying to understand my debt snowball.

And what the most current video that I've watched on your YouTube was 0% APR credit card to tackle your debt. And what I have actually tried before, I don't have one. I've got to stop you. I'm confused. You did not see a video with me telling you to get a 0% credit card. No, no, no. I'm sorry. The title was 0%.

It was a military family. They had opportunity through their status to have 0% APR on their credit card. But the way that I'm saying it is, or I guess my question would be for you, is if I have the opportunity to get a credit card at 0% APR for 15 months, currently I have one credit card. What's your balance on the card currently? My current credit balance that I owe is about $6,000. Okay.

And the interest rate is what? It's 24%. Okay. And so you're going to save $300 a year. $300 is not your problem, sir. Your problem is getting on a budget, living on less than you make, and getting $6,000 paid off. $300 doesn't fix your problem. You can move it to 0% if you want, but you're still going to be $6,000 in debt. You're still not getting rid of the debt.

You didn't pay it off. You moved it. You've got a lot on your plate. A job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries or CHM for your healthcare. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you.

Christian Healthcare Ministries is a Ramsey-, number one best-selling author of the brand-new book, Take Back Your Time, The Guilt-Free Guide to Life Balance. Ramsey Personality is my co-host today. Hey, we got a question for you. Is it too soon to start talking about Christmas? I think it is. Talking about it? talking about Christmas? I think it is. Talking about it? Our marketing team does not think it is.

Talking about it? No. We're getting so close, Dave. I think it's Christmas all the time. I know. I'm that guy. You are. But every year we celebrate Christmas with our Ramsey Show listeners with a Ramsey Christmas

cash giveaway. And yep, I mean, Halloween's gone, so we've got to go. It's happening. It's game on, right? We've got to start giving away money. It's a tradition. This year we're giving away $500 a week and a grand prize of $5,000. You can enter every day to increase your chances of winning.

Of course, no purchase is necessary. Must be 18 years old to win. Text CASH to 33789. Our famous $10 sale is out there on 40 of our best-selling books, including the Total Money Makeover. And Christy Wright's 2022 Goal Planner is not $10, but it makes for a great gift. She bought out a lot of notes. I sent him the wrong notes. No, no.

A bunch of our books are $10, including Total Money Makeover. Rachel's book, new book, Know Yourself, Know Your Money, from number one bestseller from last January is as well. But the Gold Planner is out, and we don't have a bunch of these left. They set you up for all of 2022. Talk about what the Gold Planner is. Yes, and this is actually, it is on sale, I believe, for $40. So it is on sale from its normal sale price of $49.99.

But here's what's cool. This is really, we were talking about this today, but it's actually really five products in one because it's got some content like a book would have. It's got journal questions like a Bible study or journal would have. It's got templates and worksheets to help you grow in the areas that I'm teaching you. And it also, of course, has your calendar, your weekly, monthly calendar. And it's a goal setting tool. But if you want to see the inside, I did a live walkthrough today on my Instagram page

and on Facebook. So Instagram is at Christy B. Wright. Facebook is at Official Christy Wright. And you can see the entire inside and i train you on how to plan your year using any calendar but of course i walk through the goal planner so you can see this one because after all christy be right and if you don't believe me ask matt so there you go there it is so i walked up to the uh restrooms at the uh golf course that i was at in mexico the other day, and it said men to the left because everyone knows women are right.

Not a bad sign. I like it. Not a bad sign. That's funny. I like it. Open phones at 888-825-5225. The calendar, the $10 books, and the cash giveaway all at RamseySolutions.com. Be sure and check out all of that at the store there at RamseySolutions.com.

Jim is with us. Jim's in Knoxville. Hi, Jim. Welcome to the Ramsey Show. Hey, how are you doing, Dave? Great, man. What's up? All right.

I'll keep it kind of short and to the point. I've been a listener for a while, and I've heard a lot of calls relating to careers and things like that, But I'm not going to want on this situation that I'm in. About 10 years ago, due to some substances and partying, I became a felon. And to keep it very short and concise, I can't stand the job I'm at. And out of the last 50 applications that I've put in, every one of them has, for a job, every one of them has come back as a no. So I was hoping maybe you, as a business owner and a leader, could give me some advice on that.

Yeah, you're always going to get a no on applications. You've got to get your foot in the door with somebody you know. Ken Coleman teaches that in his book, The Pro book the proximity principle uh so let me go back what what you have to have is you have to have a narrative a story to tell that is the truth that explains the situation to a reasonable person okay so you got busted for drugs what happened yes? Yes. Okay. Yeah, I got a DUI when they pulled me over. I didn't have a concealed carry permit, and so I got a charge for that because of that. And apparently I was being stubborn that night. I don't remember, to be honest with you.

How long have you been dry? I got charged with felony. Let's see, that was... How long have you been dry? October of 2012 october 2nd okay so you haven't you haven't done drugs or alcohol since that's correct okay and uh you were how old at the time i just turned 21 okay and so you're 30? Just turned 31 a few weeks ago, but yeah. Okay.

So the way I would do this is just to bring this up fairly early in the process. So you got a friend that works over at so-and-so, and they'll get you in to see the boss for an interview. You go in and sit down and go, listen, I'd love to work here, but I want to be really up front with you. Way back in my 20s, 10 ago i was partying i've been dry for 10 years but i got busted and so i've got a felony and if that if that's a deal killer because of 10 something 10 years ago in my past i just want you to know up front and if you said that to me in an interview i would say well

let's just keep talking i appreciate you bringing it up but i want to know more about you and i'm not going to rule you out based on that. If you're a child molester 16 months ago, you're out of here. I don't want to talk to you anymore. That's me, okay? But most of us did something in our 20s we're not proud of and hope nobody finds out about. In your case, everybody found out about it. Correct.

Yeah, and the other thing, I love the advice you gave, Dave, of if you have the conversation, explaining the context around it. You don't have to tell them your life story, but giving some context, because when people hear the word felon, they can jump to conclusions, and that title encompasses a lot of stuff. Even as you told us, like when you were telling your story, you said, well, I did some drugs, and I just turned 21. I was like, oh. My initial thought was, oh, okay, well, that's not that bad.

You know, I mean, it's like. It was 10 years ago. It was 10 years ago. And so I just think that people will hear you out when you give context around that. Just like you said, Dave, you'd say, well, let's keep talking. But if you're in a pile of 1,000 resumes and they're trying to narrow it down, the first thing they're going to do is just call out the felons. Yeah, yeah. They're trying to get down to one or two to interview okay but you've got to get in the

door with someone that you know which by the way is what we teach people that don't have this situation still the same exact information king coleman says you have to get in the door with someone you know let me give you an example okay if regardless of your uh criminal background right we have 30 something thousand applications coming in to ramsey this year for 350 jobs the chances of you getting out of that stack period is obviously statistically very low unless you got a friend that works here or a friend of a friend that works here that runs down to hr and says, at least give this guy a look. And that little bit of connection of who you know,

and it's not that they get the person the job because that never happens here, it's that they get them a look and they get out of the stack and they'll get you a look and then you go in and just tell the truth of this story. It's 10 years ago. I've been dry 10 years. But when you look it up, you're going to find a felony for a stupid kid that was doing drugs back then not done anything like that since but you're going to find that back there and you just move on real quick little narrative and explain it most people will go okay it's a 21 year old idiot i mean that's what happened most of us were right

and so and they move on but some of them aren't i mean if you get some kind of corporate goob they've got some kind of policy they can't break but that would not keep you from getting hired here so your strategy then jim would be instead of just applying for any job that has a position with your skills the strategy would be let's make a list of people we know that work at companies that we might like to work for or make a list of companies we might like to work for that we might know someone at. And let's give them a copy of Ken Coleman's new book, From Paycheck to Purpose.

Absolutely. I'm going to send you two books, and I want you to go to Ken's website and download everything he's got at kencolman.com for free as well. The book is Paycheck to Purpose. It's the brand-new book that came out yesterday. And Ken's first book, which is what we're kind of talking about here, is The Proximity Principle. Get in proximity of the things you want to do use someone you know to get your foot in

the door and we'll send both of those out for you and get you going so proud of you jim good job staying dry 10 years man that's pretty cool that's hard to do and obviously you've got a couple scars to prove it so uh you'll get there you'll get through there you'll get this to where it's further and further and further in your rear view mirror the beauty of the rear view mirror is it's a lot smaller than the windshield the windshield is your future that's called grace this is the ramsey show We'll be right back. In the lobby of Ramsey Solutions on the debt-free stage, Donald and Megan are with us. Hey, guys, how are you? Doing great, Dave.

Welcome. Where do you guys live? Philadelphia. All right. Welcome to Nashville. Good to have you. How much have you paid off? $83,000. And how long did that take? 20 months. Good for you. Range of income?

$113,000 to $177,000. Whoa, nice jump in 20 months. What in the world? What do you all do for a living? I'm a CPA. And I'm a project manager. Okay. How did you guys run your income up $50,000, $60,000 during this time?

This one's a grinder. Ah, okay. The old project manager managed some projects, huh? Yes, I did. All right. Very cool. What kind of debt was the $83, huh? Yes, I did. All right. Very cool. What kind of debt was the $83,000? We had student loans.

Well, I had student loans. Two cars that we were releasing and an engagement ring that I financed. Oh! Yeah. How long have y'all been married? About since June. So what is that? Four months now?

Six months? Oh, you just got married. Yep. Yeah. Okay. So you're working on this before marriage separately and then you combined everything and finished it up exactly so tell us your story what happened how'd you get plugged into this ramsey stuff so we've been

together seven years and uh we got engaged four years ago and um we you know we weren't doing horrible but we felt like we really weren't making much progress and um at my accounting firm there is a partner who is constantly going around telling everybody to read the total money makeover. I love this guy. Yeah. So he, you know, I was back then I was a little bit more ignorant. And I was I thought, you know, I'm a CPA. I thought I knew everything about money.

I'm trying to beat interest rates by, you know, making returns with stock investments. And one day I'm like, you know what? I'm just going to like, his name is Roman. He's been talking to me about the Total Money Maker so much. And one day I'm like, you know what? I'm just going to watch a YouTube video of Dave Ramsey. And there's a Fox Business video that I show all my friends these days. It's like 45 minutes.

It's the first thing that's on YouTube. Really? Yeah, when you Google Seven Baby Steps. But anyway, I'm driving down the road. I'm not even watching. I'm just listening to it. And I'm hearing your voice in the video in the Baby Step 2 explanation and how

intense you were about being gazelle intense and paying off that debt and how much behavior was involved with paying the smallest to largest. I'm thinking pay the highest interest rate. So I'm like, you know what? I'm going to sell some of these stocks and I'm just going to do what he says and just see how I feel.

I go home. I have about nine different student loans and I sell the stocks and I paid off four of them. In that moment, that was my crack moment of I can do this. Wow. Megan's always been pretty good with money, generally frugal, but we never had

a budgeting background. And I – like we were doing this separately, but I had most of the debt. And I was really getting gazelle intense making like – I have my starter emergency fund. I have five extra dollars in there, and I'm like in the parking lot going into work. I'm like, I'm going to make a $5 payment. Like every little bit mattered. I like it. We were really like getting intense with it and there you know we started this process and we're

like we're getting married we want to be in a good spot like when we get married so we really kind of like we did it together but we kept you know we kept everything separate but once we were able to put everything together it's just been magical ever since i love that i love that part of your story that you're like i'm just gonna try it I'm just going to try it. I'm just going to try selling these stocks. I'm just going to try one little thing. But when you felt that feeling of progress you were in, and that's just so fascinating, Donald, because research shows that nothing is more motivating than seeing progress. And now look at you, like you stuck with it. You guys have worked so hard every stage from engagement, getting married. Well done. That's incredible. Thank you. Thank you thank you cool so megan what were you doing while he's going crazy over here

well he was going crazy i was really just trying to learn how to budget i was always good at saving i thought and then once we started to use the EveryDollar app to start budgeting and everything was more transparent and I actually saw what I was spending money on, I started to realize that I wasn't as great as I thought. And, you know, seeing that he was so intense about it, I started to be intense about budgeting and kind of went from there. Wow. Very cool. Okay. So you've been married how long June? June. Okay so six months and now everything collides it has to be combined and

overlapped and then you finish up the debt. How did that go? Great. It went beautifully. I mean we've really I think we we actually paid off our last debt. We had these leases, and once the leases were done, we gave the cars back, bought a used car. We actually share it now, which is much easier to do than we thought it would be. Now we're actually in a spot that we actually – when I was in that parking lot making those $5 payments, like we were living, you know, living like nobody else. And now we're living like nobody else doing something different.

We're actually moving to Florida, which is like, wow. Yeah. It's a dream of ours to go down there. Cause we, we visit all the time. So we made this decision earlier in the year and everything's been going

smooth since. And you know, it's because we followed the, we followed the process. You gotta, you gotta really sell yourself to it. You really need to be obsessed. So you took new jobs and you're moving to Florida?

I'm actually staying at my job. I'm working remote so I'm able to work. Okay, good. I'm actually going to take some time off. I wouldn't be able to do it without this process. We plan on going down. I'll be able to have the extra time to help us settle in, and then I'm going to start

applying. I love it. Yeah. Good for you guys. What city are you going to? St. Petersburg. Yeah, great. Very good, guys.

Very fun. What an amazing step to, what an amazing way to start your marriage. Debt-free, on the same page, you're in the rhythm of budgeting now. Y'all are awesome. Who were your biggest cheerleaders through this whole process? Absolutely, Roman Leshak, the one that was pushing the, uh,

the, the, the book on us. Mr. Total money makeover back at the firm. Exactly. He's proud now. Hopefully everybody else at the firm,

uh, starts reading it. Um, but we, uh, you know, even it wasn't just introducing the book. Like I would ask him different questions and he was there to support us the whole way.

Um, other cheerleaders, our parents. Yeah, definitely. Our parents, um, you know, support us the whole way um other cheerleaders our parents yeah definitely our parents um you know supported us the entire time and probably thought we were crazy like the decisions we were making but following the process it it works yeah and probably the few people we converted along the way yeah a couple of our friends so what do you tell people overall when they say how did you do that what do you tell them the key to getting out of debt is the biggest things you did you just got to stick to the budget as boring as it can be and as annoying as it can be it is just it is the foundation of all everything that you do when it

comes to this when doing these baby steps you got to have a plan and stick to it right once you once you stuck with it those first few months did did it get easier? After the first couple months of figuring it out, now are y'all in a good rhythm where it's a little bit more effortless? For sure. The EveryDollar app makes it so easy where you can just pull over the budget from the last month.

We have it down pat where we know what our spending is. We just can have the conversations each month are a lot quicker yeah you know what to expect right good for you guys the feeling of contentment is a big deal i think like we used to just like buy buy buy things that we wanted to do like traveling and you know buying a new xbox and things like that but really like if you just take a step back and think like what makes me happy what do i actually need this that makes budgeting a lot easier because then you just find yourself naturally spending less too yeah yeah

absolutely well done guys proud of you thank you great work great work we've got a copy of the legacy journey for you that's the next chapter in your story for sure on your way to baby steps millionaires now that's where we want you to go from here and i think you're on your way to do that and a copy of total money makeover for you to become that guy that gives away those books i like it that's fun the legacy continues all right it's donald and megan from philadelphia soon to be florida 83 000 paid off in 20 months making 113 to 177 count it it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!

Woo-hoo-hoo-hoo! I love it. If you want to get plugged in with that EveryDollar app and go through Financial Peace University and you're thinking about, this year I'd like to actually be ready for Christmas and you want to do what she's talking about, you start start doing that budget you'll feel like you got a raise that's exactly what they were saying you can take a ramsey plus free trial right now just text trial to 33 789 text trial to 33 789 This is The Ramsey Show. We'll be right back. Christy Wright, Ramsey Personality, is my co-host today. Her number one best-selling book, her second one, that's her number one,

Take Back Your Time, the guilt-free guide to life balance is on sale at, it's for sale at RamseySolutions.com. The Goal Planner for 2022 is on sale. Be sure and check those out. We're answering your questions about your life and your money today. Luke is with us in Idaho. Hi, Luke. Welcome to the Ramsey Show.

Hey, Dave. How are you doing? Better than I deserve. What's up? I'm good, man. I had a question. I'm having a baby in January. Yay.

Yeah, thank you, baby boy. And we have $40,000 in debt right now, me and my wife, student loan debt. And we're also trying to save for a house. And I was also curious, my main question is really what can I do now to invest towards that child's future? It's your first baby yeah you're a good dad already congratulations well done yeah thank you well luke we teach a thing called the baby steps which is the best way to attack your money situation in the shortest distance between where you are now and wealth okay so we're going to tell you don't save for a house

until you get this debt paid off we're going to tell you don't save for a house until you get this debt paid off. We're going to tell you don't do anything to get this debt paid off. Baby step one is save $1,000. Two is pay off all of your debts except your home. And that's all you've got. $40,000 worth by listing them smallest to largest, attacking them with every ounce of financial energy and other energy you've got. By the way, this is the best thing you can do for your new baby, is get your life cleaned up.

Then once that's clear, you go to baby step three and have an emergency fund. Four is you start saving for retirement, and or if you want to put that on hold for just a minute, sometimes we do 3B and save towards a house. Five is kids' college, and baby step six is then turn around and pay that house off early. And so we'll show you how to do all of that, but the trick is to do all these things in an order. If you try to do all of it at once, kids' college, saving for emergencies, getting out of debt,

saving for retirement, saving for a house, you're going to find you get none of it done. Yeah, and it's super frustrating, too, because you're losing money in the interest you're paying to find you get none of it done. Yeah, and it's super frustrating too because you're losing money in the interest you're paying on those debts and you just feel scattered because you are. You're trying to make progress in a lot of different areas. So if you do these in the order that we teach you, one at a time, you will start to feel the progress.

It was like we were just talking about, feel that sense of progress and that will motivate you to make more progress and stick with it long term. And so just attacking those in that order and then when you get that debt paid off and you've got your fully funded emergency fund yeah then we can look at a house and saving for college and investing and all that good stuff by the way you got plenty of time yes do all of it you're going to get there no need to panic it just feels very urgent with a baby on the way and that's normal that just means you're a dad that cares.

You're a good man. That's all that means, and you'll get there. But we'll show you how to do it systematically in the shortest distance. It's called the baby steps. Hold on. I'll have Kelly pick up. We'll send you a copy of the book, The Total Money Makeover. Somewhere around 8 million people have read that book,

so it's probably going to be okay for you. You'll probably like it. Mavis is with us mavis is in portland oregon hi mavis how are you hey i'm good how are you dave better than i deserve what's up yeah so um my question for you today is um i am a real estate agent um so i've been having a pretty good past few years so So as far as the retirement plan, I want to ask you, what is the best option?

So I currently have an individual 401k that I'm contributing 15% of my annual income just for the tax benefit. So I'm not sure what else that I should have because, you know, right now I'm just thinking about I need to save some tax because taxes are so ridiculous. So what other retirement plan, like Roth or anything else, that you recommend me opening at this point?

Yeah. So you're in a 401K? Like an individual 401K. You did a simple IRA. Is that what you're saying? It is called an individual 401k so like i contribute um what's this money being invested in um it's it's just a vanguard um i think it's money market and how much are you putting in there um about uh 30 40 thousand every year okay all right that should be in a roth and i'm not worried about your taxes if you save on taxes now you're going to pay a pile of taxes later so having no tax benefit now and growing tax free

is going to end up hundreds of thousands of dollars ahead when you get to retirement. If you start cheaping out and try to get the tax break now by doing pre-tax, then the entire account at retirement is taxable. So you don't want to do that. So, Mavis, what we'll tell you to do is to limit your giving or your investing to 15% at baby step four, making sure you have an emergency fund in place and you're out of debt except the house. Then we get the house paid off. If your house is paid off, then if you want to do more, you can sit down with your SmartVestor Pro. There's a lot.

Click SmartVestor Pro at DaveRamsey.com. That's who we recommend for investing, and they'll lead you through whether you can qualify. I don't know what you've done there with Vanguard. I'm not positive. But you can do a SEP. You can do a simple 401K. You can do a Roth IRA. You can do all of these in Roth.

And there's a lot of ways to put a lot of money aside. But if you've already got $30,000 going in, I'm not positive. You may be doing a SEP IRA. That may be what that is. And you're making a lot of money if that's the case. So in order to put $30,000 in, you would have had to have had a good income, a really nice income. So that's the whole process.

Connor is with us in Youngstown, Ohio. Hi, Connor. How are you? Hi, Dave. I'm doing well. How about you? Good. How can we help? Hi, I just had a quick question about my wife and I. I'm 20 and she is 23. Anyways, I'm sorry. I wasn't expecting. We are currently going to be needing a new car or new car soon. Why?

So I, when I was 18, when I was 18, I made an 18 year old decision and got a lease. Oh, okay. And it's going to be up soon. Well, I still got another year on it. However, I went to the Toyota dealer and since the value of cars is so high right now, they'd be willing to help you out, are they? That's sweet of them. Well, they said that they would buy out of the lease,

and I could walk away from it for no cost to me. Oh, really? And not have to buy another car from them? Correct. Just because nobody can find cars anymore. So that's an option that I'm, you know, considering. Okay. However, we are still paying off debt. We have our, obviously our base thousand dollar emergency fund, but, um, you know, we don't have any extra money as of right now. What's your household income? Before taxes, it's about $90,000 between the both of us.

Good for you. Thank you. Okay, and so how much is your car payment on the one you're going to turn into Toyota? The lease payment is $330 a month. Okay. So what if you stopped everything for a month? How much money could you pile up in a month if you were in emergency mode? Like $3,000 probably, right?

Maybe. No, not paying extra on anything, just beans and rice in one month. You're making $90,000 a year. Yeah, before taxes. I know. Right. You ought to be able to get get 3 000 bucks together in a month okay and then buy a three thousand dollar car and turn your toyota in right and then the only other thing is so that that's what i was considering doing and then the only other thing is that my wife drives uh her car is a 2012 it only has 89 000 miles on it but it's

a volkswagen beetle and i can't stand that car but um regardless it you know it's it's had its fair share of problems and it's um it still runs good but i just i feel bad having my wife in you know the not you know i mean the husband drives the crap in general. Yeah, you're going to be driving a $3,000 car. Don't worry. We're going to get you set up with a crap car, Connor. No worries there. You're both going to drive crap cars.

It's Equal Opportunity Crap Car Day. Equal Opportunity. And by the way, you're 20 and 23, so these are the stories you tell your grandkids. Yeah. That car's running fine. You're fine. She's fine. Get out of debt. Then you can get better cars. Get yourself out of debt. Get you tell your grandkids. Yeah. That car's running fine. You're fine. She's fine.

Get out of debt. Then you can get better cars. Get yourself out of debt. Get you a $3,000 car. Get rid of that lease. Drive the bug. Drive the junker. And roll up your sleeves and get her done, buddy.

You can do it. You can do it. You'll be out of it before you know it. This is The Ramsey Show. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.