The Ramsey Show - App - Need Outweighs Opinion Every Time (Hour 1)

Episode Date: May 11, 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. Joining me this hour, my co-host is Ramsey personality Chris Hogan, and number one best-selling author and will be the voice of retirement in North America today, the voice of the everyday millionaire. The phone number's here if you want to talk to Chris and me, 888-825-5225. That's 888-825-5225.

So, Chris, our producer, James, handed us an article right before we went on the air from CNN, a fairly short article. Of course, CNN Money is closed up, so this is CNN, what's left of CNN Money. It really is what it is. It's their business section. Americans are so nervous about the state of the economy that they're stashing cash in the bank at a rate not seen since the first year of Ronald Reagan's presidency.

The United States Government Bureau of Economic Analysis reported Thursday that the savings rate surged to 13.1% in March, up from 8% in February. That's the highest savings rate since November of 1981. Americans set aside in savings $2.17 trillion last month. Wow. I mean, Dave, when you hear that, what that screams is the unknown. You've got the fear about the virus, but people understanding the importance of sitting on some cash to take care of yourself and your family yeah you know we've taught for years in financial peace university uh and then we get criticized for that that savings is not a mathematical problem

savings is an emotional problem um you have enough money to save money. And I always use the macabre example. If your child were ill and you had to purchase a vaccine and they said nothing to the COVID, this is 15 years ago. I use the example in videos. You can go back and look them up. If you had to buy a vaccine for $10,000 to save the life of your child, you would find a way to save $10,000. Yes, you would. And it wouldn't be the math. You know, your job didn't change. You know, the math didn't change. You might pick up extra work. You might.

But basically, you would cut cable. You would cut some stuff because savings just became very important. Yeah. And until it's important, you won't freaking do it. Generosity. Until it becomes important, you won't do it. There's always a prom dress to be bought there's always a better car a better couch there's always a weekend trip getaway there's always one more golf club there's always something to freaking buy but when it matters it has nothing to do with

math and then we get you know you see the stupid stuff on social media mainly from left-wing nuts that you know ramsey hogan that bunch over there they don't get it because you can't save money you stupid people unless you have more unless you make more money because a person like me can't save money well by god you are too now yeah they are and i'm going to tell you right now need outweighs opinion all day every day oh that Ooh. That's tweetable right there. It is. I'm going to tweet it, Dave. Don't you do it. I'm going to tweet and say you said it. All right.

Thank you. But it just shows what's possible. And I think I applaud people that are doing this. I think more importantly, what you need to do is understand the plan and the process. Dave, so many people have been letting money run them, and it's possible to take control. You just need the right plan. But, I mean, you have an oh, crap moment. Yeah.

Oh, crap. I've lost my job, might lose my job, or the economy is tanking. Oh, crap. I can't get my hair cut. Oh, crap. Everything's turned upside down and disrupted. I better save some money. And maybe at a lower income than you had two months ago, you find a way to save money.

There it is. There's a learning there for you if that's you. Yeah. The point is you don't ever have to go back. Yeah. You can always find money to save and invest. It's a matter of trading it for something else, and that something else in America is almost always lifestyle. No, you're absolutely right, Dave.

We're a click away from boxes showing up on our porch. And unfortunately, people have been clicking themselves right down into the poverty line. And it's time to wake up. And you hit on it. This was a few weeks ago, right in the middle of the COVID thing. You said when people get serious, they'll get to that point and they'll say never again. Yep. And I think that's that rally cry. one of my friends from kentucky i talked to him he said never again will i put myself and my family in this situation i'm not going to be here ever again that's right and sometimes it happens to you in an individual a catastrophe yeah you go through um you know a loss of a job or the death of a loved one or something

and you go i'm not going to be i'm never going to be broke when this comes up again. Never again. That's right. I went through it when I went broke in my 20s and I had to start over. I went, never again is American Express going to call my house unless it's the wrong number. Never again. Never again. Because I won't be doing business with them.

That's right. Never again is a collector going to call. Never again am I going to be without money to pay the lights and water. Never again am I going to be without money to put food on the table when i got babies scared me to death man i couldn't breathe i remember it now it was 30 years ago almost 40 years ago and uh man it scares the crap out of you and uh some of you had the crap scared out of you and you know what i'm sorry you're going through that but it might be the best thing that ever happened to you i can say for me it was the best thing that ever happened to me horrible i went through bankruptcy i lost everything dadgum near lost my marriage

our lights and water got cut off because we weren't paying the bill we were you know roof was leaking i couldn't afford to fix it we're driving a couple of hoopties i mean and and you know but what i got out of it was a whole lot better than the pain and what i got out of it was a thorough never again moment and i think a lot of people out there right now are having that and that's what this is driving the savings rate and people wonder why you're so passionate people wonder why you have such a desire to let people out there know that it can get better and it's because you've walked through some stuff. Yeah, well, you too. I mean, everybody has.

Mine was just freaking dramatic because I do everything drama-wise, drama queen. But, you know, it's still, the thing is, the takeaway for you is you can save money. Don't ever tell me again that you can't save money when you need to because 2.17 trillion dollars went into savings in america in one month wow what if generosity did that in one month what would happen what could you do well how many hospitals how many saint jude's hospitals could you build and fund? How much domestic hunger could you wipe out if you did that? Let me just tell you, all you're doing with generosity and savings, under the heading of savings is investing, all you're doing there is you're making a choice to not do something because that thing is more important. Yes.

Giving is more important or saving, investing is more important than the purchase of a thingy. Because there's always a freaking thingy in America that you can buy. It's nonstop, Dave. The commercials make you feel bad about something you don't have. I stayed in a hotel and they gave us a selection of pillows. You've got to select the type of pillow that you wanted. Are you serious? It was wonderful.

What a luxury. But how whacked. If you're staying in a hotel where there's a selection of pillows and you don't have any money in savings, we might question your sanity. You need to go home. You don't need to have a selection of pillows at the hotel and have no emergency fund. You might have lost it. This is unbelievable.

Yeah. This is wonderful news. I hope that it stretches some of the people that did this. So far, they'll never return to the same shape. And that's my prediction. Now's the time, people. Never again. This is the Dave Ramsey Show.

For most of us, health care costs seem to increase every year, and saving money on health insurance feels more and more out of reach. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had a health scare involving one of their kids that was completely unexpected. With today's health care climate, this could have bankrupted them. But thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of Christian Healthcare Ministries, they're part of a group of believers who financially and spiritually support each other.

CHM is the original health cost-sharing ministry and is a Better Business Bureau accredited charity. It's biblical, affordable, and it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org. CHM is a proud sponsor of Dave Ramsey Personality, Chris Hogan is my co-host this hour. Stephanie is in Illinois.

Hi, Stephanie. Welcome to the Dave Ramsey Show. Hey, Dave. Hey, Chris. Thanks for taking my call. Sure. How can we help? Well, with God's grace, my husband and I have been working your baby steps for a few years now.

We paid off $240,000 in debt. We have our emergency fund. Wow. And we recently started baby steps four and five. Wow. Look at you. $200,000. Whoa. I mean, what did you pay off?

It was a mixture of student loans, both undergrad and graduate, and two automobiles. My goodness. That's incredible. Way to go, guys. That's amazing. It was a long journey, but definitely worth it. So my question is related to use of the emergency fund during these difficult times. My husband and I both work, but due to COVID-19, he's going to temporarily lose his paycheck. And so because of this uncertainty and not knowing how long it will last, I'm thinking

your guidance would be to pause baby steps four and five until he can get back to work. Correct. But the reason for my call is that because I'm still getting a paycheck and I actually worked from home 90% of the time before the crisis. So it's a blessing that my job is fairly secure through this. But I estimated that if we paused the college savings completely, but reduced the 401k contribution to only 6%, which is my company match, we actually wouldn't need to touch our emergency funds until January. So because of that built-in buffer with me still working, we weren't sure if we should

try to maintain some contribution to retirement, maybe even try to do a little college savings too, because by the time we get to the point of needing the emergency funds, hopefully his work situation would have either returned to some level of normalcy or he would have found another job because normal never came back. So I just wanted to get your opinion on that because you know when you have the gazelle intense mindset it can be hard to stop honestly you want to keep going yeah well the trick is you're not touching the emergency fund with your scenario and so if you were touching the emergency fund in order to keep going then that would be like using your emergency fund to fund your 401k, and that'd be dumb.

So we're not going to do that. But you're not touching it. As long as you're not going to touch it, that's fine. So, you know, what I'd probably do is get towards the end of the year and reassess as you go along and say, if you ever get to where you think you're going to get close to that emergency fund, then push pause. But right now, I think your plan is solid. Yeah.

Stephanie, what do you do for a living? I am a marketing manager for a consulting firm. Okay. So I'm a full-time employee, and so most of my pay, well, not most of, a good chunk of my paycheck goes toward health insurance, life insurance, 401K. Yeah, you are extremely, you are very detailed and very clear on what it is you're chasing down. And I love to hear that. But you hit the nail on the head with something with your husband.

If that job doesn't come back, then he's finding something to bring some money in. Right? Because a man's psyche will change. It's easier to find a job when you have one. And so him looking for something to come in it allows you guys to stay on track and you keep chasing down your dreams i'm very very proud of you all great job yeah very well thank you so much so i your plan sounds like it makes sense the trick is don't indirectly use your emergency fund to fund your investments because because you will refuse

to cut them off in time so cut them off in plenty of time that you don't get into that emergency fund so just monitor it month by month watch your budget watch everything and if you start getting down close and you think you're going to have to tap that emergency fund then be sure you first pull the plug on them on those investments dave she hit on something though when you are a gazelle intense and you are very focused on chasing something down it's hard to slow down well what's the gazelle intensity is and you know what i think she was saying and i how i heard it was i love plowing through these baby steps and once i get up to baby step five i don't want to go back to three that's right and it was uh you know and so it

wasn't really saying i demand to be able to invest while I burn my emergency fund. That really wasn't much. It was more like, I'm at five. Don't make me go back to three. That's like gazelles don't go backwards. That's right. You know, that's where she is. Now, hold on. She's doing great.

We get a lot of new people listening to the show. When you talk about gazelle intensity, what are you talking about? Tell the people. Well, it's just, I mean, it's a metaphor that we use in the Financial Peace University teaching and have for 30 years, that the gazelle running from the cheetah in Africa, the cheetah is actually superior in his speed. He's the fastest mammal on dry land, and yet he seldom catches the gazelle, only one out of 19 chases. And the reason is the gazelle is trying to stay alive and that's pretty heavy motivation so this gazelle intensity is i'm running for my life yeah i'm not going to be

here anymore i'm tired of being in debt and i'm going to treat this thing like my hair is on fire we're going to cut the house to nothing i mean we're going to have nothing we're going to do nothing we're going to have uh you know scorched earth syndrome around the lifestyle so we can get out of debt. And that's what they did. They had $200,000 worth of debt reduction. Got it done. Very impressive. It really is.

And those of you out there, if you want to see Dave reenacting the cheetah situation, you need to get over in Financial Peace University and check it out. It's in Baby Step 2, talking about getting out of debt. You'll never forget it. Fat man running on stage. That's good. That's good. That's amazing. But, yeah, it's true.

But 14-day free trial, by the way, on Financial Peace University at DaveRamsey.com. All right, Shirley is with us in Mexico. Hi, Shirley. How are you? Hi, I'm good. Thank you for taking my call. Sure. What's up?

I had a question about our business. We have a tree nursery. My dad started it several years ago, and he grew it quite quickly, but he passed away a year ago. So we are left with $20,000 of medical debt and $43,000 of business debt from like six, seven years ago. And our income is like from $225,000 to $250,000 per year. But what our problem is is we profit only like $10,000, $15,000 per year. And so we're not sure if we should sell the whole thing, or it's me and my brother and mom working here, and so, yeah, or how we could move on with our debt. It's all in pretty high interest.

We're hoping they will settle some of it for a little less, but yeah, we don't know what to do. How are you bringing in $200,000 and only netting $10,000? Where's all that going? I can quickly give you some numbers. Between my mom, brother, and I, we take out $42,000 to live off of. Each? No, no, all together.

Okay. And we would use roughly $70,000 at Tuduk to buy trees. We import some of those. And we use around $40,000 for employees, just the employees that work here, the rest of the employees. And then just the rest is maintaining the trees. We have around $200,000 of inventory. We were wondering if that was a problem, like is that too much? We do have some trees that are here for many years already.

Yes, you have a year's worth of inventory in stock. That's not going to work. That's what's killing you. Plus you've got all the maintenance. You have all the maintenance on that inventory. Yeah. Shirley, how many people are you all employing? No, like 10 usually.

Okay. We did have more, but we cut that down already. Right. Well, here's what I would tell you. I really want you and your mom and your brother to really sit down and look at this. Even if you're thinking about selling it, you've got to get this business looking better. You've got to get it in shape and beginning to really think about it.

Now, here's where it gets tough because you've got your father's memory, and my prayer goes out to you. But I want you all collectively to make a decision. Is this a business or is this a hobby? Because it's got to make money for you all to be able to sustain yourself. And so you guys are going to have to promise to be open and honest as you talk about this and look at the real changes that are going to have to be made. You know, you guys are putting too much into it with too little coming back, Dave.

Yeah, I think I would give it a period of time to get it considerably more profitable. And if you can't, then you need to sell it. And so if you said, I'm going to work it one more year and we've got a double or triple our profits, uh, during that year by cutting this and cutting that and selling off a bunch of inventory is one possibility. Uh, and if we can't get it profitable, we're going to have to cut it loose. Uh, and cause I think you three could make more than you're paying yourself right now if you just got jobs. This is the Dave Ramsey Show. Hey, folks, there's literally never been a better time to try online grocery.

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Our offices opened. We've been working from home, all thousand of us, or all but about 20 of us who were down here doing the show And we opened up the building for volunteer People that wanted to volunteer and come in One week ago today, we reopened And said you're here, unless you're ill Or you have a family member that's ill or in danger or something And so two weeks ago, or two weeks later after that we've opened the building to the public and we have public we have humans with us in the lobby on the dead tree stage you don't know

how happy we are to see you people yes i'm tired of looking at dave it's good to see you. Oh, feelings mutual. So, you guys, welcome. Where are you guys from? We are from Grand Rapids, Michigan. Ah. So you escaped Michigan. Don't tell anybody. Okay.

Well, you can stay here in Tennessee if you need to for a little while. We're fairly normal here. It's okay. And most of us are living. It's good. Life's good. Welcome, guys. Grand Rapids, Michigan. And how long have you had this debt-free scheme planned? okay and and most of us are living it's good life's good welcome guys grand rapids michigan and how long have you had this debt-free screen plan did kelly have to put you off because of covid she did we had hoped to uh stop in nashville on our way down south for spring break and didn't

happen didn't happen break didn't happen nashville didn't happen we got a really long spring break in michigan not very warm yeah i got you well welcome to nashville so good to have you how much debt have you guys paid off 104 000 in 12 months good for you well done and your range of income during that 12 months? About $160,000. What did you pay off? The house. Oh! Looking at weird people. Yes. Michigan refugees with a paid-for house.

Yes! I love it! Woo-hoo! Wow! Congratulations. Thank you. Absolutely amazing. What do you guys do for a living?

I'm a teacher. Uh-huh. I'm a construction worker. All right. So what's this house worth in grand rapids michigan we had a real estate agent tell us it was worth 370 okay very cool and you have a paid how old are you two i'm 44 i think i'm 47 i think yeah i think okay good so i think you're debt free with a house before you're 50. Amazing. You have a paid-for house.

Did you ever dream that would happen? I'm not a long-term thinker, so I didn't really think about it. I was okay just making monthly payments. So he's our thinker and financial planner. I knew that that would happen. All right, so tell us the story. What happened, Mark and Corey? How did you get there?

We'd been paying a little extra on our mortgage, but in January, he's a thinker, and he came home and said, I've been thinking about it, and I think we should pay off the house in a year. And when he said, I think we should, that means we're doing it. So the kids joined us, and they made a plan for the family, and we said we won't go out to eat for a year. And the kids won't get slushies from Speedway. And mom won't buy clothes.

And dad was limited to two adult beverages a day. With the caveat that he could save them. Oh, you could have a little buildup. For the weekend. For the weekend. okay for the weekend all right wow so yeah from there we lived on my income and through everything he made at the house yeah and so you did it in one year january to january so you finished back last january yes sir uh just a few months ago just in time yes wow i mean how uh providential is that when you look back on you go

a year and a half before a year 14 15 months before all hell breaks loose he has the idea we ought to pay this house off yeah and so it's allowed us during this time to do all the home projects that we've wanted to do um we've been able to help people that we know that need help now. So that's been a blessing. How much was this former mortgage payment? $1,100. $1,100. No longer leaving you now each month?

No. I hope you're getting the girls some slushies. That's a lot of slushies. We also kept a list on the refrigerator of things to buy after we paid off the house. Slushies and the chocolate syrup that hardens on ice cream. Oh, yeah. We need that. And sprinkles.

I'm in. I'm in. Yes. Okay. Very cool, you guys. Mark, what was the biggest sacrifice for you? Time with me out to dinner. Yeah, that's true.

Friday night, date night. She threw you a lifeline right there, buddy. Yeah. We relied on gift cards. Okay. So we did get date night once in a while, but birthdays and gift cards. And the kids survived.

They look great. What are their names and ages? Sam is 15. Brynn, our tall child, is 14. Lily is 11. And Jordan is at home with her fiancé and a new puppy that she couldn't leave. Okay. You don't have any short children?

No. Your tall child. That's true. All right. Very cool. You guys are so happy for you. Congratulations. All right. Very cool. You guys are so happy for you. Congratulations.

Thank you. Now, going through all of this, you were able, during the corona shutdown, you were able to give and help other people, you said. You mentioned that. You were able to identify some other people. I don't have a house payment, so I can help you. I don't have any payments, so I can help you. I've got savings, so I can help you. It puts you in a different position, a different headspace for generosity, doesn't it?

It does. How did it feel to not have to worry about the house during this time? Gotta have felt like a genius 14 months ago. Yeah, and right in March, Mark said, if people would listen to Dave Ramsey, they wouldn't be afraid right now. So, yeah, it's not been a time of fear. So that's been, we're really blessed with that, that we just were able to stay home and spend time together. And we missed out on a lot of things, but it's time together and time that we're not worrying.

And so we're thankful to model that for the kids too. So when people find out that you're not even 50 years old, not even 45 years old in your case, and you have a paid for house, that's so weird. You're weird people. I mean, you really are. I love it. Weird in a wonderful way. And they say, how'd you do that? What do you tell them the secret to getting out of debt is? Any secrets? I usually don't tell people. He's pretty private. He keeps it quiet.

Okay. Yeah, I think what we learned with that. Now you've got the opportunity to tell 18 million people. That's true. We learned with that the difference between wants and needs was our biggest, hey, and that was, you know, not going out to eat didn't really help us pay off $104,000, but it was just the idea that we can all sacrifice and we're in it together. And we can put off what we want right now and just do what we need. And it says a lot about how you've raised your daughters, for them to join the mission.

And it became a collective thing for you all to do as a family, which is yeah and so there would be times that i would talk about getting something and lily would look at me and go mom you don't need that go lily go lily so once not a need you know what but it sets it sets a conversation in your brain for the rest of your life because you remember this moment in time that one year when we did this as a family. And these ladies will look back someday and have a discussion with their potential husband in the future and go, no, that's not really a want. I mean, it's not really a need. That's a want. Because in America, most of us, me included, we say, I need that, I need that.

But we really don't have hardly any needs. The vast majority of Americans don't have needs. They just have wants. And so, I mean, there's exceptions, I understand. I'm not making fun of somebody that's in trouble or something like that. But I mean, most people in America really just have wants. And so when we stop doing that and we can hit our goals and you guys are incredible. So proud of you. Thank you. How's it feel now that you're there? No payment. Fantastic. It's so great. Very cool. We've got a copy of Chris's book for you, Everyday Millionaires.

That's the next chapter in your story. You are right on track to do that exactly, as a matter of fact, because the average millionaire in America is 49. And if you've got a paid for $370,000 house, that adds towards that, plus whatever you've got in investments, you may be there or almost there already. But now you can finish this off, and that's the next chapter in your story to be millionaires. And outrageously generous as you go along. All right.

It is Mark, Corey, Sam, Bren, and Lily. Grand Rapids, Michigan. Michigan refugees, $104,000 paid off in 12 months. That's their house. Weird people making $160,000. Count it down. Let's hear a debt-free scream. One, two, three.

We're debt-free! Yeah! Woo-hoo! Great job, you all. That's how it's done right there. This is the Dave Ramsey Show. Please hear me loud and clear. The government is not going to bail you out of your student loans, at least not completely and not without a catch.

What they're talking about only impacts federal, not private loans, and you need to take responsibility for what you owe and pay your debt down quicker. Right now, Splash Financial is offering their lowest rates ever. With lower rates and extra payments, you could just find yourself debt-free in the next five years. Visit splashfinancial.com slash Ramsey to see if you qualify. Thanks for joining us, America. Chris, good to have a debt-free screamer back in the building. Listen, to see the people, it's fantastic.

Great-looking family, very, very focused. And in the midst of all of this corona stuff, you have proof that it is possible when you stay committed and focused to a plan and unite together as a family, there's nothing you can't do. You know, maybe corona was your wake-up call. A year from now, you got your house paid off like they did. And come see us. Yeah. Why not? Yeah. I mean, it's possible.

That's the thing to remember. Free coffee and cookies. Miss Melissa over there taking care of everybody. The lobby is back open to the public. And again, we're following the exact guidelines of the CDC and of the governor's office. Oh, yeah. And so everything's wiped down here. Everything's cleaned and double-cleaned and triple-cleaned and so forth.

So we're not being reckless. We're just ready to have our lives back. And we invite you guys to come join us. If you're in the Nashville area, we are back open, and that's just fun. I did not anticipate the emotions of how I was going to feel when there were people back in the building. It caught me off guard. Yeah. Wow.

It's powerful. It's powerful. Didn't know how much I missed them. There we go. All right. Amy is with us in Michigan. Hi, Amy. Welcome to the Dave Ramsey Show.

Hi, Chris. Hi, Dave. It's the Dave Ramsey Show. Hi, Chris. Hi, Dave. It's a pleasure talking to you guys. You too. How can we help? So, well, I live in Michigan, which, as you know, is not really the best place to be right now. And I've been thinking for years about moving, and I am on baby step number two and I didn't know if there was a certain time to where in the baby steps I could move or if it's something that I should hold off until I'm

at least to baby step three. No you can move whenever you want as long as you can scrape together the money for the move and you end up with a job that's as good or better okay all right does that make sense thank you yeah i mean i have a house here in michigan so i have to sell that first right i just didn't know if like now you got a lot of job what do you do um right now i work at a pharmacy i'm doing medical billing but it's not really what I want to do. What do you make? I'm not really sure. I make about $36,000. Okay.

What would your house sell for? I think it would probably sell for about $120,000. Where would you move? I'm hoping closer to Nashville. Okay. All right. Well, in Tennessee and Michigan, what part of Michigan are you in? Close to Flint.

Okay. All right. Yeah, you can buy a similar house here for a similar price and the wages are similar. So you're not going to have a big increase or decrease in cost of living. Taxes are cheaper in Tennessee than they are in Michigan.

But other than that, you won't see a big difference except the people here talk slower. Amy, what's the draw for coming to Tennessee? You know, I have been there a few times. My brother was at Fort Campbell for a while. I love the Tennessee area. I've never actually been to Nashville, but I want something new, something different.

You know, I'm 26 years old. I don't have any kids, nothing that really ties me down. My parents are getting ready to retire, and so I'm ready for something new. Well, you have every opportunity. What I would do is reach out. Go to DaveRamsey.com. Reach out to one of our real estate EOPs. That way you can kind of get a comp analysis on your home and really look

at the timeframe on how long is it taking for homes like yours to be able to sell. And then just in your mindset, start reaching out and connecting, applying for jobs and really start make a to-do list for yourself. This is something that's definitely possible for you. Oh, and Dave, you also have a relocation guide at your website. Go to DaveRamsey.com, and you can find that as well. Yeah, and just make sure you've got the new job lined up before you leave. Right, absolutely. I don't want you to just come to Nashville and say, oh, I hope I can find something. Too many people do that, and it breaks their heart later because it's tougher all the way around than folks think it is,

even when times are normal, and they're certainly not normal right now jason's in texas hi jason welcome to the dave ramsey show dave and chris how are you guys today good man how can we help well i have a question i have some money coming in in august and i've i've been baby stomping around uh and i just need to know what to do with the money. I don't know where to put it. Uh-oh, baby stomping. I like that. Where are you stomping at right now?

Where are you? Hence the stomping. Basically, me and my wife found Ape just over one year ago, and we've paid off $58,426 with a debt. Woo! And the problem is we found Dave one month to the day too late. And I'll just tell you why. Our family has been buying what you call fleeces, four fleeces or fleeces. And 30 days prior to us finding you, we both got into very expensive vehicles,

you know, a Ford pickup and a Ford Explorer. I'm in a zero interest loan. She's in a lease. And that is our next target. That's what we have coming up. And I just need to know what to do. Do I get rid of the vehicles and take the hit? And I have money coming in, but I guess I'll let you respond before I tell you where the money's from.

You've got a lot of time left on the lease, don't you? Yes, sir. Mathematically, you're going to be better off with a long time left on the lease to sell it and take the hit. To sell it and take the hit, yes, sir. Okay. And then start figuring out what you can purchase for cash or close to cash, and then make a plan to move back up in vehicle. What's your household income?

Together, we're right at $100,000. So I make $45,000, and she makes, depending on hours, about $55,000. Yeah, and so you work your way back up into a $15,000 to a $20,000 car each that you pay cash for as you go along. But you might start in $5,000 cars and then work your way back up into a $15,000 to a $20,000 car each that you pay cash for as you go along. But you might start in $5,000 cars and then work your way back up over time after you get this mess cleaned up. But if you've got a long time left on the fleece, the difference in the early buyout and the value versus the remaining payments is going to tell you to go ahead and take the hit. Okay. Jason, you keep alluding to you've got some money coming in.

How much is it? Where is it coming from? So I've worked really, really, really hard to get where I'm at as an instructor, but the entity I work for has recently allowed me to take on one of their former contracts as a contractor. And so I have a very large contract. So I'm coming in August to basically instruct at a private program. Okay. How much is it?

$71,236. Okay. Well, that fixes a lot of stuff, doesn't it? Yeah, it does. And that's why I thought if i talked to you guys i could make some more sense out of it because do i just take that money and just i don't know i'm just trying to figure out what i should do with these two cars because it's not like paying off the lease would be meaning good i know you know that but yeah it's paying off the lease

doesn't work because of the cost on it is not going to work but you're so you're probably moving down in vehicles anyway because i think these two vehicles added together are more than $50,000 in value, aren't they? Yes, sir. Yeah, which if you're making $100,000 a year, you're making $170,000 this year, but normally making $100,000 a year, you've got too much in cars. So it's time to step away from them, use the cash to clean up the mess, and buy the cars. Yeah, absolutely. And this is something that's a step back.

It's a pause. You're not staying there for three years. You're going to step back while you save up and then you can upgrade car for cash what you're doing is becoming allergic to a payment yeah ain't going backwards i don't think he's gonna have to save up if you got 70 grand coming in yeah extra just write a check cover the differences buy car let's get those cars sold and then write a check and buy some cars and then don't go back and go looking you know what david i figured out. My last stupid on a car lot, this was like 15 years

ago. I went looking. Okay? I didn't plan. I didn't plan to buy anything. I went looking and brought home a payment. You impulsed a car. I brought a payment home. You impulsed a car. Don't car shame me, Dave. I know what I did. I'm impulse shaming you. Yeah, I didn't

do it anymore. it was a long time ago it was but i tell people be smart about what you go look at be smart be in control well because every one of us have that i mean but it's amazing people people will spend a two and a half days of research on a hundred dollar item and then they impulse a car and a heartbeat and it's just it's just strange the way we do this chris hogan ramsey personality my co-host today here on the air you are listening to the dave ramsey show james childs is our producer ellie daniel is our associate producer and phone screener this is common sense for your dollars and cents teaching you to live on less than you make a concept Congress can't

grasp. It's the Dave Ramsey Show. In the middle of these uncertain times, Ramsey Solutions wants to give you some hope for the very first time ever. We're giving you Financial Peace University free for 14 days. Go to DaveRamsey.com slash hope so you can watch from home.