The Ramsey Show - App - My Mother Wants Me to File for Bankruptcy! (Hour 3)

Episode Date: December 17, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Rachel Cruz, Ramsey personality, number one bestselling author, and my daughter is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Jerry's going to start us off this hour. Jerry's in Columbus, Ohio. Hi, Jerry. How are you? Okay, how are you? Better than I deserve. What's up? I was just calling.

My wife and I are retired teachers in Ohio, and the way the pension plan is set up, when one of us passes, the other one still gets the same income. Do we need to have life insurance? Sure. Okay. So the next question is, what if one of us can't get a policy? Well, then I guess you're not going to have life insurance.

What do you mean? Why wouldn't you be able to get a policy? My wife's been diagnosed with Alzheimer's, and we went through Xander, and they couldn't find a policy for us. You're not going to make a market on that. That's right. I'm sorry. Okay, so she's got early onset then. Yes, and the thing is, we didn't go through your book, but we are on step seven. We have no debt.

We're investing. We're giving. So everything's paid off, and her income comes to you as long as you're alive once she passes through the school system, right? Or vice versa. Yeah, either way. Okay. And how old are you guys?

She's just turned 70. I'm 64. Okay. All right. And what other monies do you have other than a paid-for house and these two pensions? We each have our own Roth IRAs. I've got a 403B. How much?

In those accounts, about $350,000. Okay. I think you're all right to call yourself self-insured if you want to. Here's the rule of thumb. Okay. Number one, and the income, the pension probably does it. You're probably right. But with the other things, the paid-for house and the $350,000, it definitely is there because you've got some flexibility.

So the question we ask ourselves is, at 64 years old, she's 70 and got early-onset Alzheimer's diagnosis. If something happened to you, we've got to be concerned that she's cared for, right? And we've already made that arrangement yeah well the actual tactical care is one thing but paying for it with your both of your pensions and the 350 um i think she's good she'd be okay right yeah so you're probably self-insured you reverse the question something happens to her are you okay well even more so you're okay right yes, yeah, you're self-insured. I'm good with that. Okay. The purpose of life insurance is to make sure the one left behind has got food, right?

Yeah. Yeah, well, we're both retired, and like I said, we're actually still saving and giving. Yeah. Well, way to go. We're still investing. And you did all this on a teacher's salary? Yes. Congratulations. Teacher's salaries. Well done. that's beautiful

right it's awesome love that very cool that's the position you want to be in well done amy's in philadelphia hi amy welcome to the dave ramsey show great thanks so much for having me it's good to talk to you guys you too what's up um so i have a question for you all um calling for my mom actually she was my grandmother's caretaker for years. She had to quit her job to take care of her. She did a great job. But unfortunately, she didn't save anything. And she now lives on her Social Security.

My grandmother passed away a few months ago. And she did, though, just now inherit $80,000. So it's a great blessing. And she asked my husband and I to, you know, to help her with this. So I already had her on an everyday budget. She lives in a small apartment, and, you know, we're just having her live on that. But we want, we told her, you know, this is her nest egg, and she really just doesn't want to mess it up this time, she said. So she wants to do it wisely, do it God's way, and we want to help her through that.

So basically, I'm calling you to see what would be the steps. You know, how do we walk her through this? How do we help her with investing? What would be the right way? Just not sure at this point. Okay. Yeah, I mean, my first piece of advice would be to sit down with one of our SmartVestor pros because they're going to be able to lay out things like what a mutual fund is,

putting it in some kind of account like that that grows, and that she's able to say, okay, how much is my lifestyle? How much do I need per year? How much return do I need? They're going to be able to really sit down and mathematically walk you through because that's the answer she's going to need. How much does she need to live on per year? What can money do what can it grow to how much can she live off of yeah so you've got her set up now living on her social security right right right and in our heads

we just thought you don't touch it and you just just invest it and just just let it just let it grow a little i mean it'll grow eight to ten thousand,000 to $10,000 a year. Okay. Something like that if it's invested in good mutual funds. I'm probably not going to invest the whole 80. I'm probably going to set maybe 10 aside as her emergency fund. Okay. In a separate bank account that's not connected to the ATM and it's not connected to her checking account or a debit card. Okay.

So it requires effort to get to it. Right. And then I'm probably going to do exactly what Rachel said, and that's sit down with a smart investor pro, because you don't want to invest the money, and she starts watching the news and the stock market goes down, and she starts calling you in a panic. Instead, she needs to have understood what she's doing enough.

She doesn't have to become a professional investor, but she needs to understand, and what she's doing enough. She doesn't have to become a professional investor, but she needs to understand. And what Rachel's explaining is exactly that, that they'll sit down with her and not only help with the budget and, you know, we're not going to touch this money. We're going to leave it alone, Mom. You're going to live on your Social Security. And, okay, we're going to let this money roll in each month and each year as it grows. But you don't want her losing sleep over this. Because because the market feeling like feeling like she did something wrong and the way to solve that is to teach her and to teach you both of you and to have a person in your corner that you trust

that has the heart of a teacher so click smart investor at dave ramsey.com and sit down with them and they can help you do every bit of that. Very good question. Very good job. Well, if you're looking for some great Christmas deals, there's still some out there. Our team is using every reason we can to give stuff away. We're now running a sale, the Green Monday sale, all week this week at almost 90% off. And for the first time ever, we've even marked Rachel's Contentment Journal down to just $10.

Plus, the window to preorder the Know Yourself, Know Your Money book, the brand new book by Rachel Cruz, is closing. If you do pre-order, you get $150 worth of free add-ons, but you've got to do that before January 4. And believe it or not, that's just around the corner. It's here. The book ships January 5. So no more excuses.

This new year is the time to understand yourself and learn how to make healthy money choices. And Rachel Cruz will help you unlock the psychology, the strengths, the challenges that come with each of the brand new seven money tendencies found in her book. Check it all out online at DaveRamsey.com. The sale on all this stuff ends this coming Sunday and you don't want to miss out on this. Pretty good stuff. It's fun. Lots of fun stuff happening.

Yeah. Closing out 2020. A lot of people are going to be helped with this book. That's my prayer, for sure. A lot of people. Tens of thousands have already bought it and when they get it

and start reading it, they're going to spread the word. It's a very helpful set of materials. This is The Dave Ramsey Show. Life sure has a lot of twists and turns. Unlike a roller coaster, we never know what's around the bend. The same can be true with unanticipated medical bills. That's why Christian Healthcare Ministries, or CHM, is a great option for those who are faith-focused and budget-conscious. CHM is not insurance.

Rather, it's Christians helping other Christians carry one another's burdens with healthcare expenses. You know how important it is to be ready for whatever life throws your way. And unfortunately, medical expenses can be some of the biggest, most unexpected curveballs. With CHM, you'll have peace of mind knowing you and your family have a caring, faith-based community behind you. As a Better Business Bureau accredited charity, CHM has helped its members successfully share over $5 billion in each other's medical bills for nearly 40 years. To see if CHM is right for you, visit online at chministries.org slash budget. That's chministries.org slash budget. Ramsey Personality, Rachel Cruz is my co-host today. Open phones at 888-825-5225. Jay is in Atlanta.

Hi, Jay. Welcome to the show. How can we help? Hey, Dave. Rachel, thanks for taking my call. Sure. How can we help? Yes.

So I'm 24 years old, and I got about $18,000 saved up in a Roth TSP account from when I was on active duty in the military. So my question is, should I roll that over to a Roth IRA right now, considering the fact that I'm currently in school and I'm not working at the moment? You've left the military? Yes. Yes. I would. It's Roth to Roth, so there's no taxes involved, and you're not going to activate anything. And you've got 8,000 mutual funds to choose from, where the TSP has about six options,

and a C option being the most valid of all of them. But you can do a lot better than the TSP options in the open market with mutual funds to pick for your new Roth. And so, yeah, it's pretty simple. Get with a SmartVestor Pro at DaveRamsey.com and roll it to a Roth IRA. We put it across four types, growth, growth and income, aggressive growth, and international. We always tell you to take your 401k or your retirement plan, whatever it is, with you when you leave with a direct transfer rollover to an IRA on your own because you've got more selection and more control. It's pretty simple.

And same goes here. Thank you for your service, by the way. Open phones at 888-825-5225. Jessica is in Canada. Hi, Jessica. How are you? Hi, Dave and Rachel. Thank you for taking my call.

Sure. I'm currently on Baby Step number two. I'm $60,000 in debt. I recently started listening to you, so I'm being intentional. I'm going at it because all the times and I paid off $12,000 so far. Thanks. So I grew up with a very unstable home when it comes to money. My mother is a very big spender and she never ever had enough money for the month. While I don't blame anyone else but myself for my bad financial decisions, she's the one who sort of pushed me or guided me in the direction to make poor financial decisions.

And all my debt I have is credit cards and loans. So now that I'm being very frugal, she thinks I'm completely crazy. And she was pushing me to file for bankruptcy. And every time I see her, it's a constant battle because we're on different pages and I can't seem to make her understand that what she's teaching is wrong and what she's doing is wrong. So I wanted to know your input

on how to approach that situation. How old are you, Jessica? I'm 28. 28, okay. Well, the hard part about the relational aspect of money is that some people just don't understand, and the hard thing is you can't control them to force them to see that they are wrong.

So I would say on her end, unless she's asking and wanting to learn, I wouldn't push your stuff on her because she's not asking and you talking about it unless it's celebratory and you're like, hey, mom, I just paid this off and I'm excited. And you have that kind of conversation knowing that it's probably not gonna,

she's probably not gonna have the best response. I would probably just leave finances out of the discussion. If she keeps bringing it up, then there needs to be a boundary put in place because it's not worth the strain on your relationship. You're doing something that is wise with your money and you're going down this journey. She doesn't agree.

And so being able to put up a boundary and say, hey mom, since you keep bringing it up, this is what I'm doing. I'm 28 years old. This is why I'm doing this because i want stability i want peace i want money in the bank and you can give her your reasons why and say and if you don't understand that's okay but i need your respect enough for me not to negatively keep talking to me do you know i mean just having that sometimes you have to just have a boundary that says we

can't talk about this subject because if we are going to talk about this subject we are not going to do well and i'd rather have i'd rather do well i'd rather have the relationship for instance i have a relative that votes wrong they just vote for the wrong people every time they they have a knack for it and um and they blindly vote for one party regardless, which I have no use for voting wrong or voting for the wrong party regardless or voting for a party regardless. No matter what, I vote for that party. No, that's just ridiculous. But I love them, and what I have figured out is they're not going to change. And so just constantly berating them about it is not going to help and talking to them about is not going to help because it makes me mad

so the best thing to do is just not talk about politics with that relative because they're just wrong you know and that's kind of what you may have to do with your mom is just like mom i can't talk about money with you because you and i don't agree on this and we're just going to find something else to talk about because we love each other. And it's just, you know, how's the weather? How about them Titans? I mean, you know, I mean, it's just, you know, it's just, how about the football team? You know what I mean?

You just kind of find something else. And you put that boundary in place, like Rachel's saying, but it's very difficult to do. And, you know, probably the most difficult boundary is mother to grown daughter. That is one of the more difficult relationship boundaries because both are relationship animals and they feel entitled. They feel like they have rights to speak into each other's lives. And so they don't, you know, sometimes they just don't do well with it. And it's okay to set some boundaries in place. And Jessica, I would say for you, I mean, I heard a little bit of your tone and the way you even framed the question that there's a little bit of hurt and resentment towards your mom.

I mean, you said the way I handle money today is because of what I learned from her. And I'm just in a terrible spot because of it and so there is this this interesting dynamic now that you are a grown adult and you're working through oh wow my mom you know did things in my childhood that i don't agree with and now because that's how i was raised i almost just didn't even know to do any better so that's how you got to this place and i'm glad you're changing everything because there's a rule jessica and the rule is once you're 30 you can't blame your parents anymore okay you always say that i don't agree i thought that i put blame but there is real hurts and things that go on i know i know but you can't blame them you can you can be hurt here's my quote i love this quote when it comes talking about your parents you're not here to

bash them and i heard a little bit right like oh we're not here to bash them. And I heard a little bit, right? Like, oh, we're not here to bash them. We're not here to defend them. We're here to tell the truth. So tell the truth, Jessica. Like tell the truth of what you experience and then learn from that and grow. And so I think both of the other ends,

extreme or unhealthy, because you're not getting to the root emotion of your mom. So there's a relational aspect there too, Jessica. I would really dig into. And if there's a level of hurt and resentment you may talk to someone about that i mean there's i think all of that is very healthy yeah okay i don't disagree with you always say that once you're 30 you can't blame your parents well you can't you can't it's not you're not blaming them okay not blaming you're in agreement you just don't like the statement but awareness

that once you're past 30 you can still have hurt from your parents. You can still have hurt, but you can't blame them. But I'm not speaking out of experience. He has never, ever done anything. Yeah, look. Oh, yeah. We should start a new radio show. Yeah, we should start a new one here. The Dirt of the...

Confessions. Confessions of the Ramses. The... So, there's a difference in hurt and blame, though. All right, Dr. John Deloney, tell me. Well, you can be hurt and admit that there's a wound there, but you can no longer let that be the reason that you're not winning. Yes, 100%.

That's what I mean. You can't blame them. 100%. Blame is someone else's fault I'm not winning. Yes, I agree. It is not your parents' fault I'm not winning yes and that is not it is not it's not your parents fault you're not winning

once you're 30 it's your fault I don't know why you keep saying 30 this is well I just made it up it's not it's not a scientific fact

it's just a Dave-ism alright go ahead she's got 28 she's got two years to go she's still okay oh good yeah Jessica you got plenty of time

Jessica you're gonna make it oh crud. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. That's a lot of what I talk about, though, in the new book with the money classrooms. So she grew up in an unstable money classroom where the emotional communication was very stressed. And the verbal communication was probably very open, knowing what her mom was out. So she felt

a lot of that conflict and tension growing up and so that unstable money classroom it does affect you. All the classrooms affect you. And that does leave a hurt it leaves a wound that you learn to overcome. Absolutely. Not to blame for your dysfunction.

And that's why know yourself, know your money is going to be great. Yeah, that's right. This is The Dave Ramsey Show. We'll be right back. Rachel Cruz, Ramsey personality, is my co-host today as we answer your questions about life and money. Open phones at 888-825-5225. Zach is in Nashville. Hey, Zach, how are you? Hey, Dave, how are you doing?

Better than I deserve. What's up? Thank you for taking my call. Okay, my question is, me and my wife, we are both in our early 30s. I'm currently 34, she's 32. We're pretty well debt-free. I guess my question is, I owe $80,000 on my house right now. I'm in the position to pay it off. I haven't invested in anything and I'm still learning that process. But I guess do I pay the house off now or do I maybe start the Roth IRAs or go that route? I don't know what the best answer is. And that's the reason for my call. You said, Zach, that you can pay off the house. So does that mean you have, I'm guessing, a lot of savings?

Yeah, I've got about $100,000. $100,000? Me and my wife both. And like I said, let's leave this about $20,000. I've been pretty focused on paying the house off. If I keep track right now, I'm paying extra to the principal. It would have probably put me at about five years, I guess, if I keep track right now. I'm paying extra to the principal. It'd probably put me at about five years. I guess that would have it paid off. Yeah. How much do you make a year?

About 62. That's great. Well, what I would do, Zach, is considering you have no other consumer debt, you have a good amount of savings, I would work to still fund some money into retirement. I mean, the earlier you can start this, the better off you're going to be. Even three to four years, the fact that you guys can start in your early 30s is going to be huge. And so I would fund about 15% of your income into retirement. So opening up a Roth IRA, if your work has a 401k, do that. Do you guys have kids? Yes, I've got two little girls girls one's seven and one's a year and a half okay do you have any college savings for them at this point i do not and i'm very new to the baby steps and like i said i was trying to figure out what the best yeah no you're doing

great you know being in the position yes absolutely well you're yeah you're in a fantastic position on paper for sure so yeah i would 15% of your income into retirement. Then I would go and open up some college funds for your girls. So either an ESA or a 529 plan, put some money there. And then anything extra that you have that you want to throw at the house, I would do that. I would make sure you still have an emergency fund on the side of three to six months of expenses. But anything beyond that, yeah, I would look to be putting the house down. Did I hear you right that you have $100,000 in savings and $80,000 pays the house off?

Correct, yes. I know that money's just sitting there. I know. I'm just asking if I understood you right, and I wasn't being sarcastic. Yes. So if I understood you right then, Rachel's advice is perfect, but I would write a check today and pay off your house. Okay. That would have been my question.

Yeah, then the other $20,000 moves over into your emergency fund, and then out of your income, without a house payment, boom, right? Now, in your monthly budget, you set up a draw going into your 401K or your Roth IRAs like Rachel's talking about, or your company's plan or whatever, or sit down with a smart investor pro. And you may want to sit down with them anyway and then have, you know, if you just start $100 a month per kid, it would go a long way towards a college as young as your kids are. And so, yeah, I'd sit down and get at least $100 a month going per kid and at least 15% of your income going towards retirement. And without a house payment or any other payments in the world,

you're going to have plenty of wiggle room in this budget to do that. Yeah, and that's kind of been my question. Because it frees me up a lot once I pay the house off. I just didn't know if that was the best move. Let me just tell you, I've been doing this 30 years, and I've been telling people for 30 years to pay off their house every chance I got. I've never had anybody call me up and was pissed because they paid off their house. Exactly.

Like, Dave, that's the worst advice. You ruined my life, Dave. I've never heard that, not one time. People get pissed at me about a lot of stuff. I get a lot of hate, but it's never been about paying off your house. So apparently I make most people mad about a lot of stuff i get a lot of hate but it's never been about paying off your house so i get i do it apparently i make most people mad about a lot of things but that one not people don't get mad about that one zach hold on i'm going to give you a copy of the total money makeover which has the baby steps outlined in it on steroids every detail every nuance every question

answered about the baby steps shows you exactly what to do when to do it how to do it and it will verify the conversation that you had with Rachel and I. And I put you in a great position here, brother. And what an amazing thing. Thirty-four. Yes. Way to go, man. Paid for house tomorrow.

Ding. If you wanted. Just like that. I mean, the number of people do that? Almost none. Almost none. And then to the point, though, Zach, of not having the house payment, you have no other debt. When your income comes in and you're completely debt-free, you have no other payments.

That 15% is easily put away. And then you guys, because I would think living with this $100,000 of cash over here feels good. Like there's a level of security there. And when that strips down to $20,000, there's going to be like, oh, wow. But building that back up without a mortgage payment is going to happen so quickly well 20 000 is plenty of an emergency fund with a 60 000 income no it is but i'm just saying just the thought of oh yeah we could go buy a car we could do other things with that money yeah that short-term savings is going to happen so quickly without that mortgage payment. So that feeling of it. But listen to this. This is what I think. Cool. 32 to 62, 32 to 67, 35 years.

If he just invests, if he never gets a raise. Now, if you go 40 years at your job and you never get a raise, you're a loser. Okay. But if he never gets a raise and he only invests 15 not more just 15 that's going to in good mutual funds in a roth iras he's going to have between five and seven million dollars making 60 grand because he did this so early that's that kid's on fire man that's cool see that's what that's why we tell you to pay off the house because it makes you rich that's right yeah and you'd be in a position to be outrageously generous you know

what you can do with five to seven million dollars anything you want i mean and what if i'm half wrong he's still okay i mean still okay that's unbelievable so this is why nobody gets mad at me for telling you to pay off their house they get mad about everything else but they don't get mad about that open phones at 888-825-5225 james is in philadelphia hi james how are you hi dave how you doing today good how can we help good um i just have a quick question so um my wife is in 139000 of student loan debt. We recently just purchased a home about two months ago. Really, the only debt that we have is the house and her student loans. We have no car payments, no credit card debt, nothing like that.

I just want to know the best way to tackle her student loan debt, you know, whether we should just like pay half of it and then refinance it or just save up for the whole thing. And I just want to know the best way to tackle it. How much do you guys make, James, a year? So my wife makes about $42,000 a year. I am a loan officer. I work basically commission, but my year to date should be about like 260,000 this year. Why did she go $140,000 in debt making $40,000 a year?

What is she doing? So she went to a private institution. She was originally going for fashion, merchandising, and marketing. Very niche market to really break into. So it was pretty hard to find a job. But yeah. So here's

what I would do. If you make $300,000 a year and you have $130,000 in debt, I would pay off your debt in one year. Okay. $140,000 from $300,000 a year and you have $130,000 in debt, I would pay off your debt in one year. Okay. $140,000 from $300,000 leaves you plenty to live on. Okay. We have about $66,000 in the bank now.

Good. Write that check against it, and then you're paying it off in six months. Okay. You're not going to do any of this, are you? No, no. I am. It's just hard to let go of the money. I mean, that would be draining the bank account. That would be completely draining. Dude, you have to get rid of this. Sally Mae is an ugly old woman, and she's in your house, and she won't leave until you throw her out. And the faster you throw her out, the faster you're going to get on with your life.

Let me tell you the problem with paying off your student loan debt. You're not going to do it. That's the problem. You're going to have to get on this like it matters. And if you don't, it's going to hang around for another 10 years and you're going to have a bunch of theories and still have Sally Mae in your bedroom. This is The Dave Ramsey Show. Our scripture of the day, Hebrews 13, 16.

Do not neglect to do good and to share what you have, for such sacrifices are pleasing to God. Ralph Waldo Emerson said, The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.

And oddly enough, by the way, I'll add that that will make you happy. Go figure. Michael is with us. Michael's in Dallas, Texas. Hey, Michael. Welcome to the Dave Ramsey Show. How you doing, Dave?

Thanks for taking my call. Sure. What's up? I had a quick question. I had a two-part question, if I'm able to have enough time. So my uncle pretty much just purchased a new vehicle, and I was trying to teach your ways to him and, you know, just trying to find out why he didn't just buy it out cash when he had the money available to him.

And his response was, you always need a line. You always need something open, a line of credit open. And in my head, I didn't want to argue with him. So I'm just thinking in my head, well, why would you want the line of credit open if you have the cash and you have no debt? You're right. Except for the debt you just created. Yeah. That's just, you know, people have these sayings around debt because debt is so normalized, and they don't even think sometimes when they say stuff about how ridiculous what they're saying sounds.

I mean, what he just said is, I always want to be in debt. Yeah. That's kind of a dumb statement. He doesn't have a house in there or anything like that. So that's always just like, but you have a credit card. You know, you get Firepoints and stuff like that. Okay, I can understand that, but no. I don't even understand my second my second quick question was i have my kids in a

gerber uh savings plan and i was trying to find out because me myself i have a roth account and i was trying to see about how do i go about to see if i'm able to transfer the funds that are in their gerber account into a roth or an IRA, or what would be good for them to do? It wouldn't be a Roth or an IRA. It would just be opening a 529. It's not transferring. You just cancel that garbage and get a good mutual fund in your kid's name for a 529 plan.

Gerber is a baby food company. They're not an investment company, and they sell gimmick whole- whole life life insurance as a savings plan that's a piece of crap and it's horrible it's absolutely horrible so uh if i were in your shoes i would get with a smart vestor pro open a 529 or an esa for your child and um just cash this stuff in and use that money to fund it yeah okay go a step further because you said it's horrible because i get as a mom when i had babies all the baby stores know you're pregnant so you get all these brochures so you

get i mean i got so many of those flyers and it's horrible because the rate of return of what they're taking is so small explain when you say it's horrible to a new listener what does that mean well it's a whole life life insurance policy yeah for children and so they don't need life insurance. It's a savings vehicle that pays almost nothing. And it's housed in the life insurance world. And, you know, anytime you get around insurance of any kind that is a gimmick,

meaning it's aimed at some kind of little weird corner of the world, like this is life insurance for children, for babies for God's sakes. Or it's a savings program for babies brought to you by the same people you buy your baby food from. You should, that right there is a clue, you know. So, you know, gimmicky insurance is like cancer insurance. Okay.

You have health insurance that covers you if you have cancer. You don't have heart attack insurance. Why are you buying cancer insurance? Because you already have health insurance. That you if you have cancer. You don't have heart attack insurance. Why are you buying cancer insurance? Because you already have health insurance. That's why you're not. And those are gimmicky things. Another gimmicky one is accidental death. Like you're more dead if you die by accident.

You're still just dead. It doesn't matter. You're not double dead. And so your family needs money regardless of how you die. Well, I'm likely to die by accident. No, you're not. That's why it's so cheap. It's a gimmick.

It's like an extended warranty that only covers one side of the television. The other side it doesn't cover. You know, it's that kind of thing. So you just don't get into that, and then you have, you know, other other issues. So, yeah, it's just a bad, gimmicky, ineffective, low return life insurance product for children. And and it's it's yeah, it's one of those things where the parents, the company knows you have this emotional need to, when you have a baby, to do something good for them and think about their future and your noble calling as a parent.

And they tap into all that and sell you crap. All right. Seth is with us in Dallas, Texas. Hey, Seth, how are you? I'm doing well. How are you doing? Better than I deserve. What's up so i have a uh well i made a genius decision and bought a car i uh got it on a zero percent car

loan and could potentially pay it off it's a five-year uh loan but i could pay it off in about a year's time does it make sense for me to put that money in some sort of investment vehicle, or should I hang on to the loan at 0%? I have met with thousands of millionaires. I've never met one that said, Dave, you know, I made all my money borrowing 0% on my car and investing it. Sure. So the answer is get out of consumer debt

because that's what all millionaires do. They stay away from payments of any kind. All the studies, all the data points we have from 30 years of doing this all say that the people who build wealth are the ones that stay out of debt of any kind. Or if they find themselves in debt like you have, sir, they work their way out as fast as they

can and so i would either sell this car or i would get it paid off in about nine or ten months i could do that that's pretty much what i was looking for yeah and then you take those payments you never do this again you pay cash for your cars from now on and that's the shortest distance between where you are in millionaire that's the point distance between where you are and millionaire. That's the point. Because your most powerful wealth-building tool is not the manipulation of interest rates. It is your income not given to some stinking bank in the form of payments. And so stay out of the payment business and use the power of your income to build wealth with. And that's what the borrower is slave to the lender means it changes everything okay i mean your income is completely freed up and you invest

it and you just watch it grow while you're sleeping i mean it's just it just goes it literally is working for you money works harder than any employee you'll ever have it works all the time it works 24 7 it never gets sick It doesn't whine. It just works. It's amazing. I mean, it works hard. Brian is in Owensboro, Kentucky. Hey, Brian, welcome to the Dave Ramsey Show. How's it going?

Good. So my question is, I have a hard time saving money. My wife gets on my butt about not saving., uh, saving. But my problem is, is I grew up not having a whole lot. So when I get paid, I'm like, I want it. I'm buying it. I'm getting it now. Um, instead of thinking about anything else. Okay. Uh, so I need to know how can I break myself with that habit and save for my family. How old are you? I'm 43, but can I give you one example?

Sure. I'm getting ready to do a job in Spring Hill, Tennessee next week at the GM plant. I will be there for about three weeks, and in that three weeks, I will make about $11,500. Good for you um and now you're growing up and you decided that you probably shouldn't spend it all on friday and then say thank god it's friday oh god it's monday right so but my big thing is like i'm short on time rachel i'm gonna make rachel jump in here what do you think well brian i mean i would i'm glad you're recognizing it so i would sit down with your wife you guys need to do a budget together, and you need to start saving.

You need to save $1,000. You guys need to be working to get out of debt and then save three to six months of expenses. And it's literally the habit, the habit of changing. And you're always going to be a natural spender. It's okay. I'm a natural spender. Actually, you're a natural spender. Why do you save if you're a natural spender?

Yeah, for me, my motivation to save is so that i can do stuff yep so for some people to buy something better later and i bet your wife would say she saves for security she wants the level of security no we're going to be okay i save so that i can do things so it's not like you can never do anything again brian you're just going to save for it and make sure you have that cushion though, of an emergency fund. I figured out I can spend more if I save. And I can give more if I save. And so I don't save for savings sake. I save for those other things.

And that's a way you can do it. There's a purpose to it. That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, 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 Kelly, associate producer and phone screener for The Dave Ramsey Show.

This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head over to DaveRamsey.com and click Dave recommends. Thanks for listening.