The Ramsey Show - App - My Fiancé Owes $140,000 to the IRS! (Hour 3)

Episode Date: April 21, 2021

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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. Rachel Cruz, Ramsey personality and best-selling author, my daughter daughter is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. And big day today. Rachel is launching a new version of the Rachel Cruz wallet. A new color. A new color.

Yes. It's not a version. That's right no but it is it is right though uh so yes for a limited time we have a metallic blush wallet ladies and so in the wallet there are 10 card slots so debit cards gift cards membership cards all of that is in there and then five or four sewn in envelopes so if you're using the envelope system it's in there and even you know we talk about the cash how important it is but those of you on baby steps four five and six you know it gets to a point that you've been for a while and cash isn't always the the only way to go about it and so i know for me it's always a place just to put receipts or you have stuff you just stick in. It's kind of like when I think of my bags, my favorite organizer, my purses, the bigger,

the better, because I just throw everything in. And so even if you don't use cash, this is still a great option. So it is here, the Rachel Cruz Blush Wallet for a limited time. You can go to ramsaysolutions.com. Again, we have a limited quantity. And then there will be no more. And there will be no more of the blush. I know.

It's so pretty, though. So Mother's Day, if you need a gift for Mother's Day, this is a great option. But it's my favorite color, for sure. Yeah. Real leather made in India. Yes. Join. We partnered with Join.

And they're an incredible organization there. They make authentic leather goods. So this is real leather and they take people off the streets or in terrible situations and employ them. They give them the opportunity to completely change their family trees. So while you buy this wallet,

you're changing your family tree by committing to do something with your money that maybe you've never done before, like being on a budget and using cash, but also you are helping people change their family trees on the other side of the world completely. So Join is an incredible organization,

and they make an incredible product. You know what I mean? They do. It's really high quality. I mean, it's so good, you guys. It's so, so great. So there's that again, roomstilitions.com. Slash store, and it'll put you right there on the metallic blush.

You have the other two colors. We have plenty of the other two colors. Yes, black and camel are the other two original wallets. They came out last fall. Yes, so they will be there. But again, limited edition for Mother's Day, the metallic rose gold. Kate is in Kansas City to start off this hour. Hey, Kate, what's up?

Hi, thank you guys so much for taking my call. Our pleasure. hour. Hey, Kate, what's up? Hi, thank you guys so much for taking my call. My mother-in-law is 60 and I'm trying to help her with her finances. She has $36,000 in retirement and if she were to start your baby step, she'd be on baby step two and she has $20,000 in student loan debt. So with her budget, she only has like a $500 she could put towards the debt, which means it's going to take her over three years to pay off the debt and then additional six months to get the emergency fund in place. So she would only be around age 64 to start actually putting money into retirement. And she says she wants to retire by like 66. So because of all that, she doesn't really want to put anything towards debt right now and just invest in retirement.

And I know you never change the order of your baby steps. So I know that's what I want to recommend and I have, but she just doesn't see it that way. And so I'm hoping you can help me like word it in a way that it shows that that's the best way. And then also just your thoughts on her retiring at 66. I don't know if that's the best thing to do with her financial situation. This is a hard one because emotionally where she's at though is she's freaking out because she thinks I have $36,000 in retirement and that's it. And I want to retire at 66 and all my money is going to go to my retirement. I mean, that's your knee jerk reaction.

But what you have to realize and what she needs to realize is even having a $20,000 student loan debt is risk. Not having other cash in the bank for an emergency fund is risk as well. And so getting to a point when she can clean up all of that, she's able to clean up the debt and have that cash set aside. It's going to put her in such a better place. But the urgency is going to have to kick in because money flows two ways. I mean, money flows in, money flows out. And like you said, flowing out, she's got about $500 in the budget if you've done a really tight budget. And then she's going to have to figure out what to do between now and then to bring in some extra income to get the student loan paid off even faster. What does she make?

She makes about $3,000 a month. Doing what? She makes dentures.000 months. Doing what? She makes dentures. So she works 40 hours? Yeah. Okay. She's not going to like this either, but she needs another job. Yeah.

And another job, and another job. Like six jobs. Because let me tell you what she has right now. A fantasy. None of this is going to happen with what you just described. If she gets rid of this debt before retirement on the budget you're talking about, I'll be shocked. Because she's not serious about it because she doesn't have any hope because she can't see the numbers getting there. And with $500 a month is $6,000 a year.

That's $18,000 in three years. That is not going to make her be able to retire. It's a fantasy. So she needs some income. Yeah. And so your father-in-law, was it a divorce, or did he pass away? Divorce. How long ago?

Oh, 20 years. And she's still mad. She was remarried again, and then that didn't work out, and they got divorced a couple years ago, and they declared bankruptcy from that. So that wiped out any debt she had before that. Except the student loan, because student loans aren't bankruptable. Well, this was actually a new loan for additional schooling for dental work.

$20,000 to make $36,000? Yeah. Wow. Okay. Well, her problem is that in order for any of these things to occur she's going to have to increase her income so she's going to be working a lot of hours she can actually end up with 100 to 200 000 in her nest egg and be debt free by 66 or 67 but not on 40 hours a week making 36 000 okay000. Okay. She's going to have to add some hours to her life.

I know she's tired. I know she doesn't want to do it, but I don't want her to retire and have to eat Alpo either. So I don't know what the extra job is that makes her a bunch of money working another 40 hours a week for the next two years, but that'll solve a lot of these problems because she can create another $3,000 a month. Bad news is her income sucks.

Good news is it's easy to double. Is she receptive, Kate? Does she listen to you? I mean, she was willing to meet with me, so that was positive. What about her son? Is she willing to meet with him? I think so.

I think so. Yeah. I think he needs to step on mom and say, Mom, you're going to have to up the game here, baby. Because if she's not listening to you, she needs to listen to somebody. Because, you know, it's not a baby steps out of order problem. It's an income problem. That's the math breakdown. Our famous $10 sale is back. This time last year, a lot of folks got behind with their money, but this spring, there's hope. Our famous $10 sale can help you get control of We'll be right back. and Everyday Millionaires. These books will help you make a plan today to hit your money goals faster. So shop our $10 sale at our online store at RamseySolutions.com.

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your life your money and your life it's a free call at 888-825-5225 here at ramsey solutions we want to transform so many lives that the toxic culture is disrupted. Imagine a world where it's weird to have a student loan. Where people pay cash for their cars. Where they know how to operate in their marriage and raise their kids. Imagine a world where they know how to get the job that they love and hire the people that they want on their team and be high-quality, world-class leaders.

Imagine being part of an organization that caused that level of disruption to our toxic culture. That's the work we do here. And that's why we have 1,000 folks on our team working together. We create digital products. We create services. We create shows, books, any way we can get to you folks and help you. If you want to join on that crusade,

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and you can find out about all of the open opportunities that are here. Carter is with us in Billings, Montana. Hey, Carter, welcome to the Ramsey Show. Hello, how are you? Better than I deserve. What's up? I got a funny question. So we probably have too much money wrapped up in our cars, but they're paid off. And we have very little debt.

Maybe, oh, $24,000 in a camper, and that's about it. And then we have a mortgage, you know, no second, no nothing. And then we own some real estate on the side, free and clear. It's just raw land. I feel kind of silly having this much money wrapped up in cars. How much do you have wrapped up in cars? Well, probably between two of them i could sell them for probably 95 000 come away at 95 000 in cash what's your household income 200 okay

it's not it's not completely out of line it does i can understand how it feels silly but the rule of thumb we use is that you shouldn't own things with car with with motors and wheels or wheels or or motors, that totaled up equals more than half your annual income. Like a camper. Camper puts you over. Yes, it does. And it has debt.

So the thing I would sell is the camper. Yeah. What do you think, Carter? You don't like that? I'm just thinking, let's take it two years from now and the cars depreciate then it drops below our uh you know the annual income i'm just i felt kind of silly that we paid cash for that stuff and you know we could have put it towards i don't know what else we'd put it towards but i wouldn't have bought it if i didn't pay cash for it

right so i don't feel silly for it i feel it. I feel silly for buying it, maybe. Yeah. But, I mean, you're right up at the top. You got a lot tied up and things going the wrong direction. Yeah. But you got a great income, and you can offset that, but you do need to, it sounds like you've been sloppy and you need to tighten up your decision-making

and tighten up your plan, right? Correct. That's all it is i mean you don't have anything here that's devastating you're not going bankrupt you're not you know you're not way over in the stupid zone where i gotta go what you know but um it's not that but it's just it's close you know and that's why that's why you're feeling the pinch i mean because the bottom line is when you've got more than half your annual income tied up and things that are going down in value it's hard to become wealthy sure it's a it's a simple principle and that's that's what

it comes down to so how long have you made 200 grand um several years decade okay what are the one-ton ram pickup 2019 and then a toyota highlander okay 2016 yeah okay yeah i would say car i mean the cars aren't the problem at this point i mean like you said they're paid they're paid for all of it and so i get how it feels kind of and i'm pretty sure we could pay the camper off pretty damn darn excuse this year. Knock it out. Knock the camper out if you want to hold on. That's fine. And then just draw a line in the sand and go, we're not going to be back up here again. Right.

And so what happened was, I can tell you which car was purchased last, obviously based on the year, but also based on just how the story's going down. You bought this big, but expensive truck, over-the truck over the top killer massively wonderful truck and you just completely boy impulsed on it and you're feeling regret well it's middle of the line and my old truck was 22 years old and it's been paid off forever so yeah you could say that yeah and so i mean you could you you're wishing you had bought a truck about between the two correct and not over the top that's you had bought a truck about between the two. Correct.

And not over the top. You've got that taste of regret on the back of your tongue, and that's all it is. And I've had that taste. That's how I know what it tastes like. So I get it. I understand. So just the thing is, do a little autopsy on the whole situation and go, okay, what do i never want to do again as a result of the story spend that much money well what did i do wrong that i wished i hadn't done

okay and um so you know that that's what i ask myself when i do that you know i've done a lot of stupid stuff my goal is to not do the same stupid thing because i figure out what it is and just put that okay i got that one behind me i don't have to do that one again because i already done that one there will be another one but i don't have to do that one and if you if you if you have a big enough pile of stupid things that you never do again people call you wise like you know how to navigate this you know your way through this it's because i know what stupid looks like and lots of it but the problem is when you do the same thing over and over and over again right and you just keep going back to the same dumb thing and

then that's the definition of insanity uh doing the same thing over and over again expecting different results so i don't i think the emotion of this is what's more important than the actual math yeah i mean if you tie up the budgie pay off the camp or all of it you're going to look up in 12 months carter and probably feel a completely different set of emotions right now than that little feeling you're feeling. Yeah, and truthfully, if you say, okay, these two parts of the decision were the bad parts. I will never do those two things again. It's easier to put all of this behind you and move on and just leave the trucks and the cars in place and get on with it.

Just don't do that again, you know, that kind of a thing. Yeah, because you didn't go over. Well, you did with the camper. You did. You did go over. But there's nothing here that's requiring it to all be undone. It doesn't do any good. Could sell the camper, though.

Still could. Walter's with us in Vermont. Hey, Walter, what's up? Thank you so much for taking my call. My wife and I have an opportunity to refinance our mortgage. Our mortgage company has, because the interest rates have gone down significantly since we originally got the mortgage just a couple of years ago when we bought the house. They've actually given us two opportunities in this. Current rate is 3.375.

What are they offering you? Drop it down to 2.875. It's not a huge drop. No. It would save us $37 per month. No. The only thing is they'd kick in. What's your loan balance?

Loan balance is $15 000 okay you're going to save a half a percent a year on 154 000 you're safe 750 a year what's the closing cost uh no closing costs because they're gonna they're gonna nothing out of pocket at all nothing out of pocket at all the Nothing out of pocket at all. The only thing they do, though, because it's an FHA loan... Oh, it's a streamline. They're tacking on $900 onto the loan amount for insurance. Okay. Nothing out of pocket.

Per year? No, no. Well, it would take the $154 and add on $900 to it. No. Are you adding $900 per year? No. Or one time? No.

Just one time. Well, then it takes you a little over a year to break even because you're saving $750 a year on a half a percent savings. And it takes you a little over a year to break even. If you're going to stay in the house three or four years, it's going to make a little bit of sense. This is not a life-changing thing. It's $750 a year to break even. If you're going to stay in the house three or four years, it's going to make a little bit of sense. This is not a life-changing thing. It's $750 a year. It's probably not worth screwing with. Retro Cruise Ramsey personality is my co-host today as we answer your questions about your life and your money. Open phones at 888-825-5225.

Suzanne is with us in Utica, New York. Hi, Suzanne. How are you? Oh, I'm okay. I have a problem with, I sold some stocks, and my advisor had told me that they would not be taxed or counted as income. And when I did my income tax online, which I didn't push the button yet to send it, but it's showing that now I owe the federal over a thousand and

the state over a thousand and i just wondered what what did i do wrong besides listening listen to maybe some bad advice maybe or maybe the online software sucks okay that's possible you may be getting a wrong result from the online software. What are you using, TurboTax? No, it was the IRS. Oh, God. Okay. That does. Yeah, that's bad.

All right. So what did you sell? How much did you sell? I sold $35,000 worth. Okay. And do you know what your basis was in that? Does that mean how much I paid? How much you paid for that stock that sold for $35,000?

Yeah. Yeah. The agency that holds my stock doesn't have that information. They don't? No. Why? Well, let's see. When I got the stock, it was purchased through an employer,

and I can't remember if I purchased it through payroll and they matched some. I think that's the way it went. And then when I met this advisor, we put the stocks into a company that she was advising me to do. Did you sell the stocks, the old stocks? I got certificates. I got certificates. And then you moved this. How did you move certificates into something else? I don't remember.

Okay. I mean, I've got all the paperwork. I've been away. So what did you put in the tax software that calculated that you owed $1,000? You'd have to have your basis to do the calculation. No, how much I sold. No, you sold it for $35,000. What you paid for it. The difference in what you paid for it

and what you sold it for is your gain, and that's what you're taxed on. Okay, so they taxed me on the $35,000 because I didn't have a cost basis. Yeah, see, that's not right. You do have a cost basis of some kind, and it should not be. Okay. Your tax would be more than $1,000 on $35,000. Okay. Okay, so you have a mess.

And I can't untangle this barrel of fish hooks on the radio, but what I'm going to do is this. How old are you? I have some homework. I'm 67. 67. Okay. Yes. And it's just you?

Yes. You're widowed or what? I'm widowed. Okay. Yes. And it's just you? Yes. You're widowed or what? I'm widowed. Okay. We're going to take care of you. We take care of widows. So I'm going to pay for one of our people that we recommend for tax advice, a tax professional in the New York area to take care of you free.

Oh, thank you. Because the IRS software sucks and you have a messed up lack of information and you're getting ready to get yourself into a mess that you don't need to get into. You probably don't owe a lot of taxes, but you've got to have to have some help scratching through and getting your proper information together to prove that. And we'll help you do that. I'll get you with one of our tax ELPs, one of the tax professionals that we recommend. They will take care of you as a gift from us.

Kelly will take care of that. I'm going to put you on hold, and she's going to pick up and do that. So, Rachel, usually when you sell stock, if you had a broker that you bought it through, that company has the records of what you paid for it, your basis. And the difference in what you pay for it and what you sell it for is taxable. And if it's been held longer than a year, it's taxable at 15% unless you make over $400,000. So in her case, she'd be taxed at 15% on the gain. And so if they're showing her gain is $35,000, the $1,000 in taxes is not right. It'd be a lot more than that.

Right, right. Yeah. But so we've got to get the actual basis figured out. And you may have to go back to the former employer, or you may have to file some kind of estimated. I know. That's what I was going to say. How do you even know? The IRS has a process for filing an estimated basis when you, you know, but it has to be based on logic.

You can't just make it up. Right, right. You have to make a series of assumptions, and a tax advisor can walk you through that. But somebody should have the basis somewhere on that. And poor Suzanne sitting there dealing with the irs.gov. Oh, my goodness. I will tell you this. If you have a simple return, online is fine.

And we have a product called SmartTax that's like $17. And if you're just doing your 1040EZ and you want to file online, it's real easy to run it on SmartTax, and you can get that at RamseySolutions.com in the store. Or if you have a complicated return or a situation where you need some help like that, you need a professional in your corner, we have the ELPs in each area that we recommend that are tax professionals that do tax preparing, and they cost more than $17. But you're going to save a lot more because you've got a small business

or you've got a transaction like that or something else going on and you can get all of that at ramsey solutions yeah anytime there's those complicated or more intimidating parts of money it's always good to bring a professional in so whether it's real estate taxes investing anything that just feels like it's a little overwhelming, it's a little complicated, you may not even be able to, if you can't explain it to someone else, that means you have to, you need to learn and you need to grow in knowledge. And part of that is sitting down with a professional and letting them help you. I mean, these people, I can't believe it, but breathe in and out this information day and day. They love it. I mean, they're, you know, these tax professionals, this is what they do. And they see every, they see every situation. They've had probably Suzanne's circumstance before in their office.

They know what to do, and you want to bring them on because, yeah, like you said, it's going to save so much time and money. Jonathan is in Raleigh, North Carolina. Hey, Jonathan, what's up? Hey, Dave, thanks for taking my call. Better than, hey, good. How can we help? I was going to answer better than I deserved, but what do I know? I'm just wandering along lost here. How can we help? I was going to answer better than I deserved, but what do I know? I'm just wandering along lost here.

How can I help? So I developed a product that's industry-specific, and I was wondering if you could give me some advice on when to actually file a patent. Like, is there a number of units that I need to sell or like a dollar amount before I file my patent to i guess prove it in the market or take it to market to be mass produced or licensed or whatever you can patent a prototype um the patent space is full of a bunch of shysters and so you don't need to pay somebody uh big dollars i mean there's things i've heard people pay 250250,000 to get a patent attorney and

all this, and you do not need to do that. My understanding is, and I've had lots of clients that have done this, have patented a prototype for, it usually costs around 10 grand, but you've got to work your way through the process, and you have to have the, is it a product, a hard product? Yes, sir. And so I have a friend who also has a bunch of trademarks and patents, and he introduced me to his patent attorney. She did a patent search through a legit firm and came back that there's no other product like this. What did she charge you for that?

A thousand dollars. That's good. What will she charge you to run the patent? $2,500, $500 of which is for the draftsman fee. That's a reasonable deal. Yeah, maximum of $10,000 out of pocket. But I've heard lots. There's all these things on the Internet where they'll help you market the product

and help you get the patent and all this stuff, and they don't do anything. What is it, Jonathan? I'm just curious. It's a, for lack of a better term, it's a tool pouch. It helps us carry tools. I'm a lineman by trade, and it helps us carry tools. That's very cool. Yeah, I would spend the money with her to do it.

It'd be that simple. We've got bunches and bunches of trademarks. We don't have any patents, but we've trademarked everything around here like crazy. So I spent a lot of money on that. I got a lot of knowledge on copyrights and trademarks because that's the publishing world and all of these images and things that we own here are part of it. That and URLs, my God. Yeah, so I think if you can keep it down under $10,000 and you have the cash to do it

and you get it patented, you can do it with a prototype. That's all you've got to do. And I would do that sooner rather than later. our scripture of the day, James 1.17, Every good and perfect gift is from above, coming down from the Father of the heavenly lights, who does not change like shifting shadows. William James says, Most people never run far enough on their first wind to find out if they've got a second.

Anna's with us in Phoenix.enix hey anna what's up hi how are you better than i deserve how can we help hi um so i started listening to you in july um i was thirty seven thousand dollars in debt um fiance, he was around 120, 130 to the IRS thousand dollars. And, um, so, uh, it got to a point where, um, now I'm at 19 and we didn't separate, but he moved down to New Mexico to try to figure out, um, he did an application of, uh, OIC to try to figure out, he did an application of OIC. Yeah. To try to see if they can help him out. Most of it is really interest. And I just wanted to know, like, are we doing, like, the right thing?

I mean, I make around $35,000 to $40,000 a year. What does he make? He was making $80,000 because he works in the oil field but it went down so now so was he 10 99 he just didn't pay taxes yeah oh my god has he quit doing that well he now he found a job where they take out taxes uh-huh so he's trying to find a second job what does he make now at the new job no he's he's trying to find oh he's making 40 to 50 so he got his pay cut in half but the oil feel dried up or what yeah it's drying up yeah okay all right so he moved down there how much did he pay for this OIC?

Well, he has a friend that she used to work for the IRS, so she's kind of guiding him of what she recommends for him to do. We're just waiting on a response, and he's going to start, like I said, he's been saving that money to start paying off. He has a lien on his name for the new mexico state so he's trying to pay that off first and then see what the irs does okay well i i'm not going to give you much hope on the o on the oic okay and offer and compromise is what that stands for and that is when the irs observes that you have no assets and no income, so they're never getting their money. You basically have to prove that you are completely broke and don't have an income.

And that's not the case here. He has an income. And so I don't have a lot of hope that they're going to just forgive this or large chunks of it. And even if they do, they're going to want to lump sum. And so instead of $95,000 or $120,000, if they come in and say, oh, we'll settle for $20,000, they're going to want their $20,000 right then. He doesn't have any money.

Well, he's not at $140,000. Yeah, but if they settle, if they did an offering compromise and settled for $20,000, they're going to want their $20,000 right then. It's not a payment plan. Yeah. So I don't want to be a Debbie Downer here, but the truth is very few OICs get through. I probably watched 100 of them try, and I might have seen 10 go through okay over the years it's just the the burden that they put

on you to prove that you have no money also means that you have no money to settle with them when they do finally take it so it's a it's a two-edged sword in a sense it gets you coming and going so irs debt moves to the front of everything yeah yeah and so i i think uh what i if i were him you know i'm going to work the oic through but i'm not going to work it through for two years while it continues to double and triple with these with these penalties going up and these interest rates going up you follow me yeah so uh i mean give this thing 90 120 days maybe six months, and in the meantime be working like a crazy person and piling up cash.

I want a big old pile of cash. I want him working 100 hours a week, and I want a big old pile of cash like $40,000, $50,000 piled up. Yeah. Yeah, you didn't sound real enthusiastic. That's your only shot, kiddo. Yeah, I know. Well, that's why he ended up living out there.

He moved out there so he could figure out that situation while I fixed my situation. I don't know why you can figure out something in New Mexico you can't figure out in Arizona. I know. Well, he's trying to get his CDL now. He's finding ways where he don't have to go to class and pay that whole amount and try to get his CDL to get a job down here. Okay, let me tell you what I'm hearing. How old are you? I'm 29.

Okay. I'm going to be your Uncle Dave for a minute. Don't you dare pay a dime of this until you're married. This is his problem. This young man needs to solve this freaking problem. Yeah, that's why I told him, like, I'm not going to get married. He doesn't want to get married yet because of his situation, but that's why, like, it was better for me to pay off my situation.

You need to get your mess cleaned up, and you can be his biggest cheerleader, but he needs to roll up his sleeves, go make a whole bunch of money, do nothing but work like a crazy man and have a big old pile of money. When this thing blows up and the OIC doesn't go through he can get started on it because if he throws 50 grand at it right quick because he's worked 100 hours a week um then he's got a good start on it it's the only way it's going away because the irs just does not go away it's just a they're not bankruptable they're just gonna be there and it not going to get anything but worse so the sooner he you know reverses the trend on this the better off he's going to be and i just hear you caring about this and being more logical about it than he is i always kind

of concerns me sometimes when on a you're the one calling and he's not so um and again maybe it's situational and it's today you were able to pick up the phone call, but I want him to be more involved than you are in his mess, if that makes sense. Yeah, that's exactly right. Try to be nice. I feel for you, girl. You were really good. I feel for you, but be aware. You're set up here for a problem, kiddo.

Be careful. Jessica's in Las Vegas. Hi, Jessica. Welcome to the Ramsey Show. Hi. Hi. So, I'm super excited. I wanted to call as soon as we paid off our debt.

We paid off our debt, our $27,000 in three months. Congrats. Thank you so much, you guys. I'm so happy. Such a weight. You know, we're lifting off our, you know, shoulders, however you say I'm a phone driver, so I'm sorry. Um, my question is, we are now on step three officially and, um, you know, it's saving three to six months.

And I was wondering if, do we still have to, you know, go gazelle intensity or can we now sort of, okay. Relax. Yeah, you were going to ask, yeah, can we just relax since now we're on baby step three. I wasn't talking to you, Jessica. No, the gazelle intensity continues until baby step three is done. So the same intensity you guys used to pay off all that debt.

I think you said three months, Jessica, which is incredible. So congratulations. Keep that intensity until that baby step three is paid off. Yeah. I'm sorry, saved. Here's the problem, Jessica. When you don't have, I've noticed this my whole life. When I'm broke is like when I attract emergencies.

Like emergencies just come find me. And when I'm not broke, they stay away. They go to other people's house. And so having the emergency fund is like emergency repellent. It keeps the mosquitoes away. It keeps the emergencies from coming in. And if they do come in, you got the money for them and so it is vitally important that you become debt-free other than the house with great intensity and that you finish the emergency fund with great intensity

but you're going to do it very fast because compared to where you were five months ago with $27,000 in debt and no money once you have $12,000 in your emergency fund and no debt, your life is completely changed. And you have done it. Congratulations. It's amazing. But, yeah, you do need to continue to lean in. Sounds like you all have been very intense, and I congratulate you for that. And it won't take that much more.

A little bit more. I mean, think about it. If you did 27 that fast, how fast can you do 12 and that's all it is and so then it's behind you forever and you've got murphy repellent in your pocket rachel good great show yeah thanks for having me on james childs our producer kelly daniel our associate producer and phone screener i'm dave ramsey 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, guys, this is James, senior producer for The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? And a lot of those people listen on one of our 600-plus radio stations across the country. To find a station near you, head to theramseyshow.com.